How far working capital is non-identical from fixed capital?
before 10 am 5 December
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BASIS FOR COMPARISON 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
Answered By=shreyash ....
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=Working capital consists of current assets which are more liquid and can be converted into cash more easily.
=Fixed capital consists of non-current assets which are relatively illiquid and tougher to convert into cash.
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