Re:

Permanent working capital
= minimum amount of investment in all current assets which is required at all times to carry out minimum level of business activities.

Permanent working capital = core current assets


Main features:
1. Amount of permanent working capital remains in the business in one form or other.
2. There is a positive correlation between the amount of permanent working capital and the size of the business.
3. Permanent working capital is permanently needed therefore it should be financed through long-term funds.


Temporary working capital:
The amount of temporary working capital fluctuates depending upon the changes in the production and sales.

Temporary working capital = fluctuating working capital = variable working capital