Difference between fixed capital and working …

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Difference between fixed capital and working capital

Posted by Parsheela Ng 4 years, 6 months ago

CBSE > Class 09 > Social Science

1 answers

Sia ? 4 years, 6 months ago

Basis for Comparison	Fixed Capital	Working Capital
Meaning	Fixed capital is the investments done by the business for accruing long-term benefits.	Working capital is the daily requirement pumped into the business.
Acquiring types of assets	Fixed capital is used to acquire non-current assets of the company.	Working capital is used to acquire the current assets of the company.
How liquid is it?	Not at all liquid.	Very much liquid.
Conversion	It can’t be converted into cash or kind immediately.	It can be converted into cash or kind immediately.
Term	Serves the business for an extended period;	Serves the business for a concise period;
Accounting period	It offers benefits for more than one accounting period.	It offers benefits for less than one accounting period.
Objective	Strategy-oriented.	Operational.
Consumption	It doesn’t directly get consumed by the business but serves the business indirectly.	Business needs working capital to operate.

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CBSE > Class 09 > Social Science