How is fixed capital different from working capital?
Answers
Answer:
Working Capital refers to the capital, which is used to perform day to day business operations. Fixed capitalinvestments include durable goods, which will remain in the business for more than one accounting period. On the other hand, Working capitalcomprises of short-term assets and liabilities of the business.
Answer:
Working Capital refers to the capital, which is used to perform day to day business operations. Fixed capital investments include durable goods, which will remain in the business for more than one accounting period. On the other hand, Working capital comprises of short-term assets and liabilities of the business.
Explanation:
The primary function of the financial manager is to ensure availability of finance, to fulfill different purposes such as initial promotion, fixed capital, and working capital. Fixed Capital refers to the capital, which is invested in procuring fixed assets for business. On the other hand, working capital represents the amount of money utilized for financing day to day business operations. It is required to support the proper functioning of the company’s business operations.