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What is Cash Cow?
In business, a cash cow is a product or a business unit that generates unusually high profit margins: so high that it is responsible for a large amount of a company's operating profit. This profit far exceeds the amount necessary to maintain the cash cow business, and the excess is used by the business for other purposes.
A firm is said to be acting as a cash cow when its earnings per share (EPS) is equal to its dividends per share (DPS).
The Cash Cow phenomenon is found most famously in the BCG Growth Share Matrix, developed by The Boston-Consulting Group in the early 1970's.
What is the BCG Matrix?
In business, a cash cow is a product or a business unit that generates unusually high profit margins: so high that it is responsible for a large amount of a company's operating profit. This profit far exceeds the amount necessary to maintain the cash cow business, and the excess is used by the business for other purposes.
A firm is said to be acting as a cash cow when its earnings per share (EPS) is equal to its dividends per share (DPS).
The Cash Cow phenomenon is found most famously in the BCG Growth Share Matrix, developed by The Boston-Consulting Group in the early 1970's.
What is the BCG Matrix?