Capital management refers to the area of
financial management that deals with
capital assets
A capital asset is defined as property of any kind held by an assessee, whether connected with their business or profession or not connected with their business or profession. It includes all kinds of property, movable or immovable, tangible or int ...
, which are assets that have value as a function of economic production, or otherwise are of utility to other economic
assets. Capital management can broadly be divided into two classes:
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Working capital management regards the management of assets that are of capital value to the firm or business entity itself.
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Investment management
Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institut ...
on the other hand concerns assets that are alternative sources of revenue and normally exist outside of the main revenue model(s) of
corporate structures.
The discipline exists because assets that are of
capital
Capital may refer to:
Common uses
* Capital city, a municipality of primary status
** List of national capital cities
* Capital letter, an upper-case letter Economics and social sciences
* Capital (economics), the durable produced goods used f ...
value to business entities or other
legal persons require management to aim to achieve optimal, adequate or otherwise sufficient capital performance of the assets at hand. Underperforming capital assets pose a liability to the finances and continued existence of any legal entity, regardless of whether it is positioned in the
public sector or in the
private sector.
See also
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Asset management
Asset management is a systematic approach to the governance and realization of value from the things that a group or entity is responsible for, over their whole life cycles. It may apply both to tangible assets (physical objects such as buildings ...
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Capital budgeting
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Consulting
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Corporate finance
Corporate finance is the area of finance that deals with the sources of funding, the capital structure of corporations, the actions that managers take to increase the Value investing, value of the firm to the shareholders, and the tools and anal ...
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Financial capital
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Financial services
Financial services are the Service (economics), economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, acco ...
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Intellectual capital management Intellectual capital is the sum of all knowledge; implying that knowledge that exists at different levels both within or outside the organisation has to be taken into account for intellectual capital. The intangible nature of many knowledge products ...
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Liquid capital
References
Further reading
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{{Authority control
Financial accounting
Management accounting