It's all about capital , fixed capital and working capital and various types of it . Useful for small and net presentations , designed well graphically .
2. Prepared By :- SAGARDEEP SINGH
Roll No:-53209V120545
Semester:- 5th
3. CAPITAL
Amount which the proprietor has invested
in the business and can claim from it .
Capital is also known as Owner’s Equity ,
Proprietorship and Net Worth .
and Net Worth Capital = Assets - Liabilities
4. Towards
Wealth
Towards
Money
Towards
Income
Capital part of wealth used for
production
Wealth is a broader concept &
Capital is a narrower concept
Ex :- Taxi = Capital ,
Personnel Car = Wealth
5. Emphasize on Personnel Use =
Money
Business Use = Capital
Capital means investment of money
in Business .
Used in business to purchase
Plants & Machinery .
Capital generates Income .
Capital behaves as a Source ,
Income is the result of the Capital
Ex:-Refrigerator is a capital for ice-cream
parlour owner .
6. Manmade
Factor
Durable
Elastic
Supply
Wealth Value Social Cost
Derived
Demand
Easy Mobility
Productive
Factor
7. • Mandatory one-time investment
• It is made at introductory phase of
business establishment
FIXED
CAPITAL :
• Referred to single use produced goods like
raw materials
• Used only once and directly in production .
WORKIN
G
CAPITAL :
• Preferred to money capital used in
purchasing raw materials .
• Working Capital & Circulating Capital
used synonymously.
CIRCULATIN
G
CAPITAL :
• Capital goods which have only a specific
use in producing a particular commodity .
• Ex :-A weaving machine can be used in
textile mill only .
SUNK
CAPITAL :
8. • Capital Goods capable of having
alternative use .
• Ex:-Electricity,Fuel,Transport are the
following capital which can be used
elsewhere .
FLOATING
CAPITAL :
• Funds available with the enterprise for
purchasing various types of capital
goods , raw materials .
• Money Capital is also called Liquid
Asset .
MONEY
CAPITAL :
• Real Capital is referred to capital
goods other than money .
• Ex:-Factory Buildings , Transport
Equipments etc .
REAL CAPITAL :
• All the physical assets(other than
land),as well as investments .
• Bring income to an individual called
private capital
PRIVATE
CAPITAL :
9. • All the assets owned by the
community as a whole in the
form of non-commercial assets
.
• Example:-Roads ,Parks ,
Hospitals
SOCIAL CAPITAL
:
• Capital owned by the whole
nation comprising private as
well as public capital.
• Part of national wealth which is
employed in the generation of
additional wealth .
NATIONAL
CAPITAL :
• Assets owned and regulated
by the international
organizations .
• Example :- UN , WTO ,
WORLD BANK constitutes
an international capital .
INTERNATIONA
L CAPITAL :
10. FIXED CAPITAL
Fixed Capital refers to durable goods which
are used in production .
These are used until they were worn out .
• Doesn’t mean fixed in location .
Since , money is involved for a fixed long period
it is called Fixed Capital .
11.
12. Plant Machinery Land
Factory
Buildings
Patents Copyrights
Goodwill
Company
Headquarters'
Business
Centers
13. Working capital
Amount of funds required by the firms to run its
business for one accounting period .
Part of firm’s capital that is used for routine day o
day business operations .
Net Working Capital =
Current Assets - Current Liabilities
14. PERMANENT WORKING CAPITAL
• Minimum amount Working Capital required to operate the firm
.
• It is also known as Fixed Working Capital .
• It doesn’t depend upon production or sales .
• Depends upon Business cycle as well as Growth of the firm .
• Further divided into Regular Working Capital & Permanent
Working Capital
TEMPORARY WORKING CAPITAL
• Excess of Working Capital over the Permanent Working
Capital .
• It is also called Variable , Fluctuating or Cyclical Working
Capital .
• Further divided into Seasonal Working Capital & Special
Working Capital .
• Financed through a short term funds like Bank Credit , Bills Of
15. REGULAR
WORKING
CAPITAL
RESERVE
WORKING
CAPITAL
REGULAR WORKING CAPITAL
• Minimum level of Working Capital required to circulate from
the cash to inventory , inventory to receivables ,
receivables to cash and so on .
RESERVE WORKING CAPITAL
• Permanent Working Capital in excess of Regular Working
Capital .
• Reserve Working Capital arises from such categories
such as recessions , strikes etc .
16. SEASONAL
WORKING
CAPITAL
SPECIAL
WORKING
CAPITAL
SEASONAL WORKING CAPITAL
• Temporary Working Capital required to meet the
seasonal demands .
SPECIAL WORKING CAPITAL
• Total Working Capital required to meet the special
needs .