Accounting doubt for capital

difference between fixed capital and working capital and circulate capital.
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Quick Summary
This discussion clarifies the distinctions between fixed capital, working capital, and circulating capital in accounting. Fixed capital refers to long-term investments like shares and securities, while working capital covers immediate operational cash needs, calculated as current assets minus current liabilities. Circulating capital is essentially the same as working capital, encompassing readily available funds like cash in hand or petty cash.

Fixed capital= Investments in FD's, securities, shares etc

Working capital = current cash requirements to meet the cash operating cycle. 

Circulating cash= can be cash in hand or petty cash or small loans and advances given to others. 

To make your understanding better, working capital is vast

You have to find out Net working capital using the percentage of sales method to budget how much cash you need for operations.

You have factoring facility to reduce receivable days

Your formula is like current assets - current liabilities which will give current balance

Working capital bank loans have different methods to get a loan like tandon method, turnover method or permissable method Etc for funding

Cash can be managed by investing in securities using EOQ / Baumols cash model where they sell securities to meet the cash levels.

 

Forgot there is miller orr method of cash management

Cash budget to get working capital bank loans.

1) Fixed Capital - Equity share capital , preference share capital Etc .

2) Working Capital - Current Assets less Current liability .

3) Circulating Capital is equivalent to working capital .

Technically Capital= assets- liabilities, however, Fd is like investment capital. 

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