Saved Bookmarks
| 1. |
Difference between fixed capital and working capital |
| Answer» \tBasis for ComparisonFixed CapitalWorking CapitalMeaningFixed capital is the investments done by the business for accruing long-term benefits.Working capital is the daily requirement pumped into the business.Acquiring\xa0types of assetsFixed capital is used to acquire\xa0non-current assets of the company.Working capital is used to acquire the\xa0current assets of the company.How liquid is it?\xa0Not at all liquid.Very much liquid.Conversion\xa0It can’t be converted into cash or kind immediately.It can be converted into cash or kind immediately.TermServes the business for an extended period;Serves the business for a concise period;Accounting periodIt offers benefits for more than one accounting period.It offers benefits for less than one accounting period.ObjectiveStrategy-oriented.Operational.ConsumptionIt doesn’t directly get consumed by the business but serves the business indirectly.Business needs working capital to operate.\t | |