For example, a public company might report itself as profitable for some period based on operating earnings alone. But, you read their annual report and see they took a loss after tax with some extraordinary items. If you don't know what that means, then you don't know what it means--It really means they didn't make any money for the period, but they're going around talking about it like they did. I should mention that's all elementary stuff--there exists a whole field called "Forensic Accounting" where accountants work to spot fraud in financial reporting.
And small business owners can get mixed up too. They talk about their big revenues but don't mention they have a lousy 5% net margin. It can extend beyond trying to bullshit you--they can get into the habit of bullshitting themselves thinking they're ballers.