Syntax error Differentiate between temporary working capital and permanent working capital.

Differentiate between temporary working capital and permanent working capital.

The major differences between temporary working capital and permanent working capital are as follows −

Temporary working capital

  • It’s the additional working capital to permanent working capital.
  • Variable working capital.
  • Dependent on variable factors.
  • Sometimes increase/decreases (fluctuates from time to time) in nature.
  • Financed through short term funds.
  • Categorised into seasonal working capital and special working capital.

Permanent working capital

  • It’s the minimum capital to maintain in order to meet operational levels.
  • Fixed working capital.
  • Independent of variable factors.
  • Stable in nature.
  • Financed through long term funds.
  • Categorised into Regular working capital and reserve working capital.
Updated on: 2020-09-25T14:05:51+05:30

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