Question
Differentiate between fixed capital and working capital?

Answer

Differences between fixed capital and working capital:
S.No.
fixed capital
working capital
1.
Tools, machines and buildings that can be used in production are called fixed capital.
Raw materials and money in hand required for production is called working capital.
2.
Tools, machines, buildings can be used in production over many years.
Raw materials and money in hand are used up in production.
3.
Example: Tools and machines range from very simple tools such as plough to sophisticated machines such as generators, turbines, computers, etc.
Example: Yarn used by the weaver, the clay used by the potter, etc.

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