Difference between working capital and fixed capital.



The major differences between working capital and fixed capital are as follows −

Working capitalFixed capital
  • Used for daily business activities.
  • Used for long term benefits.
  • Acquires current assets.
  • Acquires non-current assets.
  • If needed, these can be converted into cash immediately.
  • If needed, these can’t be converted into cash immediately.
  • It has liquidity
  • It has no liquidity.
  • Serves short period of time.
  • Serves long period of time.
  • Less than one accounting period.
  • More than one accounting period.
  • Operational based.
  • Strategy based.
  • Company needs working capital for operations.
  • Company consumes indirectly.

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