Capital management refers to the process of managing a company's financial resources to ensure it can meet its short-term and long-term obligations. This involves planning, monitoring, and optimizing the use of funds to maximize profitability while minimizing risks. Effective capital management helps businesses maintain liquidity, invest in growth opportunities, and navigate economic fluctuations. Key components of capital management include working capital, capital budgeting, and financial forecasting. Working capital focuses on managing current assets and liabilities, while capital budgeting involves evaluating potential investments. Financial forecasting helps predict future financial performance, enabling companies to make informed decisions about resource allocation and strategic planning.