Introduction to Corporate Finance — Secretarial Practice STD 12 Commerce / Arts — Question

Capital Requirement is the funds required to start or run the business.
The following points are to be taken into consideration:
(i) Draft a financial plan:
While drafting the financial plan, the present and future requirements of the business should be taken into consideration. A comparison of an estimated and past financial plans will help the business in future financial requirements.

(ii) Volume of capital required:
The capital required to run the business may be small or big according to the nature and size of the business. The capital required may be of the following type:

(iii) Fixed Capital:
The capital required to purchase the assets of the company is called Fixed Capital. It is the permanent capital of the business as it stays for a longer period of time. The sources of fixed capital are shares, debentures, bonds or long-term loans, etc.

(iv) Working Capital:
Working Capital is the circulating capital of the business. It stays for a short period of time. Cash is the most reliable source for all business firms when working capital is required. It helps to meet the unexpected expenses of the business.