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| 1. |
Differences between fixed and working capital |
| Answer» Fixed capital\xa0alludes to the amount of investment of company in long term\xa0assets. Fixed capital\xa0is\xa0capital\xa0or money that we invest in\xa0fixed assets. In other words, money that we invest in\xa0assets\xa0of a durable nature. These are\xa0assets\xa0that we repeatedly use over a long period. We can also use the term \'fixed\xa0investment\' with the same meaning. ... Property is an example of a\xa0fixed asset.\xa0Working capital\xa0is the\xa0capital\xa0which is invested for\xa0short\xa0term that means it remains in business for\xa0short\xa0time period i.e. mostly for a year.\xa0Fixed working capital\xa0is that portion of the total\xa0capital\xa0that is required to be maintained in the business on the permanent basis or uninterrupted basis. This\xa0working capital\xa0is required to invest in\xa0fixed\xa0assets. | |