Distinguish between Fixed Capital and Working Capital. - Vidyadip

Question

Distinguish between Fixed Capital and Working Capital.

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Answer

The following are the differences between fixed capital and working capital.

S.No.	Basis	Fixed Capital	Working Capital
1.	Need	It is needed for meeting long term requirement of the enterprise.	It is needed for short term requirement of the enterprise.
2.	Examples	It is needed for acquiring fixed assets like land, building, etc.	It is needed for acquiring current assets like wages of workers, power, transportation, etc.
3.	Flexibility	It is flexible only up to the point when the investment is not made.	It is flexible as it can be increased or decreased as per the requirements.

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