Question

difference between working and physical capital

Answer 1

Answer:

FIXED CAPITAL:Fixed Capital refers to the capital investment made in the long term assets of the company. It is a compulsory requirement of a firm during its initial stage, i.e. to commence a business or to conduct the existing business. It is that part of the total capital, which is not used for production but they are kept in business for more than one accounting year. Its nature is almost permanent which exist in the form of tangible and intangible assets of the company.

WORKING CAPITAL:Working Capital is the barometer that gauges financial soundness and operational efficiency of the company. It is the outcome of current assets less current liabilities, where current assets are those assets which can be converted into cash within one year, such as inventories, debtors, cash, etc. while current liabilities are the liabilities which falls due for payment within one year, i.e. creditors, tax provision, short term loans, bank overdraft, etc.

Answer 2

Hey mate her is your answer.

Explanation:

Working Capital refers to the capital, which is used to perform day to day business operations. It comprises of short-term assets and liabilities of the business. For example, money, etc.

Whereas

Fixed capital investments include durable goods, which will remain in the business for more than one accounting period. For example, Machines, other tools, etc.

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