Peak Performance Resources for Leaders by Leaders



1. Coins and currency on hand and in bank account balances. Because cash is a nonearning asset, individuals and companies usually keep their cash balances to the minimum level required to sustain operations. 2. The value of assets that can be converted into cash immediately. Usually includes bank accounts and marketable securities, such as government bonds etc. Cash equivalents on balance sheets include securities that mature within 90 days.

Cash Cow

1. A metaphor for a dairy cow that has calves annually, produces milk daily for life while requiring little maintenance. After the initial capital outlay has been paid off, the cow continues to produce milk and birth more cows that produce milk and more cows for many years. This is an example of an initial investment that grows geometrically over time. The Cash Cow Formula: 1 Cow + 1 Bull + 1 paddock + food + water = an exponential supply of cows and milk. Limited only by the supply of resources (paddock, food, and water.) 2. Products or services that have become market leaders, provide positive cash flow and a return on assets that exceeds the market growth rate. These products produce profits long after the initial investment has been repaid and help to fund company growth, leverage expansion and increase creditworthiness.

Cash Flow

1. Cash that comes into or goes out of a person’s or company’s bank account. Cash flow can come from any number of sources and is crucial for continued financial health. Negative cash flow means more money is going out than in. Positive cash flow is when more money comes in than out. 2. The amount of net cash generated by an investment or a business during a specific period.

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