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The Difference Between a Cash Cow Business and a Cash

Question 73

Multiple Choice

The difference between a cash cow business and a cash hog business is that a cash cow business


A) is making money,whereas a cash hog business is losing money.
B) generates enough profits to pay off long-term debt,whereas a cash hog business does not.
C) generates positive retained earnings,whereas a cash hog business produces negative retained earnings.
D) produces large internal cash flows over and above what is needed to build and maintain the business,whereas the internal cash flows of a cash hog business are too small to fully fund its operating needs and capital requirements.
E) generates very large increases in sales revenues,whereas a cash hog business has declining sales revenues and chronic deficiencies of working capital.

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