Question

How is fixed capital different from working capital? Explain briefly. Please need it real quick

Answer 1

Heye

your answer ⏬

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⏩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. Durable goods whose useful life is more than one accounting period. ... Used to buy non-current assets for business.

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Answer 2

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Difference Between Fixed Capital and Working Capital

The primary difference between fixed capital and working capital is that Fixed Capital is the capital which is invested by the company in procuring the fixed assets required for the working of the business whereas working capital is the capital which is required by the company for the purpose of financing its day to day operations.

The primary difference between fixed capital and working capital is that Fixed Capital is the capital which is invested by the company in procuring the fixed assets required for the working of the business whereas working capital is the capital which is required by the company for the purpose of financing its day to day operations.Capital is the most important ingredient in any business. Without capital, no business can be run and no business can exist. Capital can be categorized in two forms – fixed capital and working capital.

• Fixed capital is used to acquire non-current assets that would serve the business for more than one accounting period.
• Fixed capital is used to acquire non-current assets that would serve the business for more than one accounting period.On the other hand, working capital is used to serve the business on a day-to-day basis fulfilling the requirement of everyday production and operation.

Key Differences Between Fixed Capital and Working Capital

• Fixed capital supports the business indirectly. Working capital supports the business directly.
• Fixed capital supports the business indirectly. Working capital supports the business directly.Fixed capital is invested in long-term assets. Working capital is invested in current assets.
• Fixed capital supports the business indirectly. Working capital supports the business directly.Fixed capital is invested in long-term assets. Working capital is invested in current assets.Fixed capital is required before the business starts. Working capital is required after the business gets started.

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