Capital Rationing

Hmmm, rationing…We know what you're thinking: the only rationing you've ever considered involves the aftermath of a zombie apocalypse. That's why you've been stockpiling cans of beans and bottles of water in the basement. But this kind of rationing involves rationing of capital spending.

Capital spending is the money a company uses on things like facilities, materials and supplies...all the expenses meant to support your company and drive growth. But say your last capital spending idea wasn't so hot. You purchased a lot of canned beans to store in the basement...you know, just in case. Then your boss is likely to impose a restriction on the capital projects of yours he's willing fund. A little rationing.

Some of this is just normal business decision making. Every company has limited capital. Even giant cash machines like Google or Apple have a finite level of resources. So any company has to make choices about where it invests its resources. It needs to ration. Making the right choices is how companies stay viable over time and increase their stock prices. At least until the zombies come...