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Muni Bonds Videos 71 videos

Finance: What is maturity?
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Maturity is, quite simply, the date when a debt becomes due. As for our maturity, well... we're still giggling about the word "due."

Finance: What are Freddie Mac and Fannie Mae (FNMA)?
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What are Freddie Mac and Fannie Mae? They sound like snack cakes to us, so, uh...maybe we should watch this video.

Finance: What are Bond Anticipation Notes, Revenue Anticipation Bonds, and Tax Anticipation Notes?
26 Views

What are Bond Anticipation Notes (BANS), Revenue Anticipation Notes (RANS), and Tax Anticipation Notes (TANS)? BANS, RANS and TANS are all short-te...

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Finance: What is a Cash Cow? 0 Views


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Description:

What is a Cash Cow? Using the analogy of the cow who can be relied upon to produce milk regularly, the cash cow term is usually applied to a financial asset that generates regular cash flow and profits. The more obvious examples of cash cows are casinos and real estate in high rent areas. However, a reliable, dividend paying stock that holds value consistently, such as an Altria or Walmart may also be referred to as cash cow.

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Transcript

00:00

Finance a la shmoop what is a cash cow? that feels good [Person milking a cow]

00:08

mmm that's the spot yep that's me I'm a cash cow and boy howdy does that ever

00:14

feel good in the morning well I'm a type of company that's a natural part of the

00:19

business cycle and which kind of goes like this [Business cycle chart appears]

00:22

early companies are cash pigs those pigs eat everything including tons of cash

00:27

and let me tell you what comes out of them

00:30

it ain't milk...young companies need cash capital to grow like to build server

00:35

farms yeah like that and you know different kinds of farms and oil rigs

00:40

and chemical synthesizing plants and tractors smelting factories and stamping

00:45

machines and massive robotic thingamabob makers those well those early companies

00:51

chew up tons of cash as they build their business early in their cycle building

00:56

revenues and they might burn, i dunno five million dollars in year 1 to make 1 [Stack of cash burning]

01:02

million dollars in revenues not profit that's just in revenues then they pig

01:06

out on 20 million dollars in losses in year 5 but by then maybe they have a

01:11

hundred million dollars in revenues then they begin to chill as they grow out of

01:15

being a pig into yes higher life-forms like me where they maybe start to break

01:20

even on 500 million in revenues and no losses and no profits just

01:26

breakeven and by the time they've truly evolved into me, way over here on the

01:31

bell curve of their lifecycle then they're producing tons of cash like this

01:37

CD company which now has three billion dollars of revenue in a billion bucks in [CD 'R' Us store appears]

01:42

cash profits unfortunately its future doesn't look all that great as revenues

01:47

have likely more than peaked and it'll produce a whole lot less cash in the

01:51

next decade as they you know kindly put it out to pasture so if it doesn't buy

01:56

more growth companies with its cash yeah then it becomes dinner [Butcher slicing meat and blood appears on camera lens]

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