Question

4 Differences between Fixed capital a
nd Working capital

Answer 1

Answer:

Fixed Capital Vs Working Capital

Meaning:

Fixed capital alludes to the amount of investment of company in long term assets.

Working capital refers to the capital that is invested into the current assets of the organization.

Term:

Fixed capital is the capital which is invested for long terms that means it remains in business for long time period i.e.  For several years

Working capital is the capital which is invested for short term that means it remains in business for short time period i.e. mostly for a year.

Liquidity:

Fixed capital assets have low liquidity since they are costly and require extensive asset disposal methods.

Working capital assets usually have more liquidity since they can promptly be changed over into cash.

Frequent requirement:

Fixed capital is not needed frequently in business. Its requirement is there when a company needs to do any large investment like spreading out of business or acquiring of more fixed assets.

Working capital is needed frequently in business to complete its daily transactions like buying of raw materials, paying wages and so forth.

Source:

The primary source of fixed capital includes debentures, shares and long term loans.

The primary and fundamental source of working capital includes fixed deposits, profits held by company, short term loans, debentures and shares.

Quantity:

The fixed capital is needed more in quantity as compare to working capital.

The working capital is needed less in quantity as compare to fixed capital

Explanation:

Answer 2

Fixed capital :

• Investing capital in the long term assets of an enterprise.

• Fixed capital is not at all liquid.

• Serves strategy oriented objectives

Working capital :

• Working capital is the capital invested in the current assets of an enterprise.

• Working capital is highly liquid.

• Serves operational objectives .

hope it helps you mate.

please thank and Mark my answer as brainliest.

@ ANUSHA ❤✌