by Dr Lisa | Theory of Constraints Finance, Accounting, and Cash Flow
Cash Velocity Summary There are two cash velocity rules: ● Make sure that the amount and rate of cash flowing in is enough to cover all your business and personal needs ● Be paranoid. Unfortunately, stuff happens. And unless you’re willing to risk losing your passion,...
by Dr Lisa | Theory of Constraints Finance, Accounting, and Cash Flow
Continuing our cash velocity discussion, let talk about Increasing Throughput. Throughput (as defined in Goldratt’s Theory of Constraints Throughput Accounting) is sales revenue minus truly variable costs. Therefore we can increase your throughput by either 1)...
by Dr Lisa | Theory of Constraints Finance, Accounting, and Cash Flow
Now let’s look at the impact on what we discussed yesterday had on our throughput. Let’s say we immediately visit a customer whose complete order was shipped and had just been received by that customer. We make, and they accept, our 20% Discount Mafia Offer and we...
