Easy way to learn and memorized – class 12th – S.P – Notes of business finance – Difference between Fixed Capital and Working Capital, Distinguish between working capital and fixed capital – business finance – Secretarial Practice – Notes, & Distinguish Between – according to the New Textbook for HSC Board – Difference between, Study material, studies notes, study notes.
|Sr.No||Distinction point||Working Capital||Fixed Capital|
|1.||Meaning||Working capital refers to current assets minus current liabilities.||Fixed capital refers to any kind of physical capital. example assets|
|2.||Sources||Sources of Working capital are short term loans, deposits, trade credit, etc||Sources of Fixed capital fund can come from selling shares, debentures, long term loans, bonds, etc|
|3.||Purpose||Purpose of Working capital is to invested in short term assets such as cash, account receivable, etc.||Purpose of fixed Capital is to invested in assets such as land, building, equipment, etc.|
|4.||Nature||Working capital is circulating capital||It stays in business almost permanently i.e. for more than one accounting year.|
|5.||Risk Involved||Investment in working capital is less risky.||Investment in fixed capital implies a risk.|
|6.||Objective of investment||Investor invests money in working capital for getting immediate return||Investor invests money in fixed capital hoping to make future profit.|