Up Front: NUMBERS FOR DUMMIES
WHY JOHNNY CEO CAN'T ADD
MANY BOSSES ARE FINANCIAL illiterates. That's what a consultant found after he gave a 10-question quiz to a sampling of corporate managers. More than half got four or fewer correct. Only 3.5% scored 90% or above. One of the most-missed was a multiple choice on the definition of net worth. Answer: total assets minus total liabilities.
The reason for the low scores is that most managers--even some quite high up--lack MBAs or formal financial training, says John Schuster, president of Kansas City's Capital Connections, who gave the test. Unhappy result: a lot of mistakes that an understanding of finance would prevent. Some companies, such as Phoenix-based telecom outfit Excell Agent Services, are trying to remedy the problem. All 400 Excell employees have gone through a financial boot camp that includes running a lemonade stand for a day. Can you ace the test sampling above?Cindy Webb