Am I Wrong Here? — Dickeson

But with that simplicity comes a realization: throughput or, more accurately, velocity of throughput, is the essence of the cash game. The faster you can move working capital cash through the business process back to working capital cash once again, the more successful the business becomes. If we’re burning cash, it means our velocity is low—the cash is tied up in inventories and receivables. If our throughput velocity is high, then our inventories and receivables are minimal. Whatever margins there are, no matter how small they may be, are quickly realized and in the bank! And they are repeated and repeatable many times in a year. Cumulatively they add up to net revenue for the year. Just ask WalMart!