In capital budgeting, the term Capital Rationing implies:

Capital Rationing in capital budgeting refers to a situation where a company has more profitable investment opportunities than it has capital to invest. This situation forces the company to ration its capital and invest it only in the most profitable projects.

Here are the steps to understand this concept:

1. Capital: This is the money that a company has available to invest in various projects or investments. It can come from a variety of sources, such as profits from operations, loans, or investor contributions.

2. Budgeting: This is the process of planning how to allocate resources, including capital, over a certain period of time. In a business context, this often involves deciding which projects or investments to pursue.

3. Capital Budgeting: This is the process of deciding where to allocate a company's capital. It involves assessing the potential return on investment of various projects or investments and deciding which ones to pursue.

4. Capital Rationing: This is a situation where a company does not have enough capital to invest in all of the profitable projects or investments that it has identified. As a result, it must ration its capital and invest it only in the most profitable projects. This often involves a process of ranking projects or investments based on their potential return on investment and then investing in them in order of their rank until the capital runs out.