CASH COW

CASH COW

A cash cow is a business which is profitable as it generates more cash than what was used to acquire it or set it up.

At other times, the word ‘cash cow’ is used to refer to a profitable product that dominates the market and generates more cash than is necessary to consolidate its market position.

Business managers and investors usually milk the cash cow, but this we mean that, they use the money to develop new Investments and products.

However, managers must constantly innovate as competitors may make inroads into the market share thereby reducing the efficacy of the cash cow.