Differentiate Fixed Capital from Working Capital.

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Solution

BASIS FOR COMPARISON FIXED CAPITAL WORKING CAPITAL
Meaning Fixed capital refers to the investment of the enterprise in long term assets of the company. Working capital means the capital invested in the current assets of the company.
Comprise of Durable goods whose useful life is more than one accounting period. Short term assets and liabilities
Liquidity Comparatively illiquid. Highly liquid.
Uses Used to buy non-current assets for business. Used for short term financing.
Serves Strategic objectives Operational objectives

BASIS FOR COMPARISON	FIXED CAPITAL	WORKING CAPITAL
Meaning	Fixed capital refers to the investment of the enterprise in long term assets of the company.	Working capital means the capital invested in the current assets of the company.
Comprise of	Durable goods whose useful life is more than one accounting period.	Short term assets and liabilities
Liquidity	Comparatively illiquid.	Highly liquid.
Uses	Used to buy non-current assets for business.	Used for short term financing.
Serves	Strategic objectives	Operational objectives

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