Question

Differentiate between: (a) Fixed Capital and Working Capital (b) Short-Term Finance and Long-Term finance

Answer 1

Working Capital refers to the capital, which is used to perform day to day business operations. ... Fixed capital is used to buy non-current assets for business, whereas Working capital is used for short-term financing. Fixed capital serves strategic objectives of the entity which includes long-term business plans.

Answer 2

Answer:

Fixed capital is defined as the part of the total capital of the enterprise which is invested in long-term assets. As opposed to working capital investments which are readily convertible into cash. Fixed capital is used to buy non-current assets for business, whereas Working capital is used for short-term financing.