Question

What is meant by working captial ? How is it different from fixed captial ? Explain with example

Answer 1

Fixed Capital and Working Capital are the two types of capital which mainly differs, on account of their usage in the business i.e. if it is utilized to serve long term requirements, they are terms as fixed capital, while if it serves short term requirements, it is called as working capital.

Taking a glance, in this article will help you understand the difference between fixed capital and working capital, in detail

Answer 2

Working capital refers to the investment which get completely used up during production. For ex raw material, money in hand.
Fixed capital is the investment which once installed can be used for a longer period of time and do not get exhausted in production. For ex- buildings, computers, tools, etc.