Question
Distinguish between fixed capital and working capital.
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S. No
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Basis
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Fixed capital
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Working capital
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(i)
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Time period
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Required for long-term.
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Required for short-term.
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(ii)
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Purpose
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Money needed to buy fixed assets.
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Money needed to buy current assets.
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(iii)
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Nature
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Remains sunk in business.
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Revolves in business.
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(iv)
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Source
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Raised through shares debentures and term loans.
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Raised through banks, trade credit, shares and debentures.
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