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Cash hog business

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George Michaelides

Unlike a Cash cow business, a Cash hog is the SBU - Strategic Business Unit of a larger diversified company that its internal cash flows are inadequate to fully fund its needs for working capital and new capital investment.

Usually, the Parent company of such companies, has to continually pump in capital to feed the hog. For this reason, the determination of cash flow and investment requirements of the business units of a group forms an essential part of the overall corporate strategy of the group.

Strategic options for a Company that has cash hog SBUs:

  • Aggresively invest in cash hogs that have potential for rapid growth or high profitability
  • Divest cash hogs lacking attractive growth or profit potential
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