Define fixed capital and working capital
Answers
Answer :
Fixed Capital
In Accountancy , Fixed capital refers to any kind of real or physical capital (fixed asset) that is not used up in the production of a product. It contrasts with circulating capital such as raw materials, operating expenses and the like.
Working Capital
Working capital means the amount of a current assets that a business firm has to maintain for his day to day operations.
It can be also defined by
capital = assets - liabilities
Answer:
Explanation:
Tools and machines range from very simple tools such as a farmer plough to sophisticated machines such as generators, turbines, computers etc. They can be used in production over many years are called fixed capital.
Production requires a variety of raw materials and some money during production to make payments and buy other necessary items. These are included in the working capital.