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| David Cuykendall Click for Index Page |
The best way to describe financial throughput is the continuous flow of overhead amortizing gross margins. Financial throughput is a dependent variable; it is the consequence of your enterprise’s hidden intangible infrastructure composed of modes of operation and management that are not visible to external actors — organizing and co-determining the quality, coherence, effectiveness, and efficiency of your operations. Taken as a whole — this hidden performance — represented by your financial throughput, holds your enterprise’s overall strategies of cost avoidance, cost reduction, and top-line revenue generation.
Qualitatively and quantitatively, your managerial and entrepreneurial accounting and reporting address the key drivers of your enterprise's financial throughput, determining your enterprise’s operating leverage and overall financial results.
Standard GAAP measures of profitability, cash flow, and debt coverage are derivatives of financial throughput, but by design do not directly reveal it. Ordinarily, it is kept a proprietary secret.
In contrast, skillful proprietary operational cost monitoring, profit and loss accountability reporting, and other strategic entrepreneurial piloting tools directly reveal both financial throughput and the antecedent cost and top line revenue contributors to it, while also keeping this information secret from the eyes of competitors.
Financial throughput is foundational, universal and timeless. It is the collective referent that links each of the tripartite modal dimensions of your financial management (i.e., your tax and regulatory accounting and reporting, your accounting and reporting to financiers and funders, and your entrepreneurial and cost monitoring accounting and reporting) — giving your overall financial
management clarity, vision, focus and synchronization.
Regardless of our understanding of financial throughput in principle, we are subject to its consequences. Its meaning is self-evident and obvious once it is identified and explained; as a measure and indicator, it is revealed, not invented.
