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What if the inventory's clean and turning quickly, but the receivables are slow? That's not so ready for the quick judgment, is it? Or, the other way around—dirty, slow inventory with fast receivable turnover?
Weighing You Down
Now, we've got to dig much deeper, get a hefty slice before we can make a judgment call. Is it slow invoicing? Too many relatives or playmates doing relatively nothing, dragging on the payroll? (That's a tough one to call—even with instant replay!) Poor plant layout? Outdated equipment? Over-reliance on obsolete methods such as budgeted hourly rates? Poor hiring?
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- Malcolm Gladwell
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