Question

Which capital is used for buying current assets?

Options

• Fixed Capital

• Working Capital

• Both Fixed Capital and Working Capital

• None of these

Answer 1

Working Capital

Explanation:

• Working capital is the money needed to run a business on a daily basis.
• Current assets such as inventories, short-term supplies, raw materials, and other running costs are purchased using it.
• By meeting immediate cash needs, it guarantees efficient manufacturing and sales operations.