Question

Distinguish between fixed capital and circulating capital

Answer 1

✌hye. ..✌
fixed capital means , the money that is needed once in a few years .... is known as fixed capital
for ex - money needed to busy machines or to purchase a land ....

circulating capital - the capital needed regularly or the money in hand is known as circulating capital...
for ex - money to buy seeds or for renovating of machines....

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Answer 2

Circulating capital is also known as working capital.

              Fixed Capital                                             Working Capital

Meaning Fixed capital refers to the investment of the enterprise in long     term assets of the company. Working capital means the capital invested in the current assets of the company.

Comprise of Durable goods whose useful life is more than one accounting period. Short term assets and liabilities

Liquidity Comparatively illiquid. Highly liquid.

Uses Used to buy non-current assets for business. Used for short term financing.

Serves Strategic objectives Operational objectives