Cash Cow

Definition: A company or product that produces a steady and high amount of positive cash flow.

Example: A product that continually has strong sales but doesn’t require much advertising, sales costs, research costs, and other costs is a cash cow.

Why It’s Important: Cash cows are very profitable and provide cash to the company and owners. One strategy is to “milk” the cash cow (i.e. collect the cash) and not put any more investment in it until the sales greatly decrease.

« Back to Glossary Index