Capital Maintenance Concepts
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“Generally explained as current assets within the business entity, the working capital would encompass all stocks, cash, debtors, and anything linked to the company. Though these working capital figures may vary through time, calculations should be done as estimates to ensure there is always sufficient working capital for the smooth running of the company or business entity. “
“The following are some of the factors that may contribute in some way to the amounts required within the fixed capital frame:
The nature of the business entity is one of the dictating factors that will affect the fixed capital. Within the platform there are several smaller considerations to be taken into account such as the size of the business entity, the products it will be dealing in, the type of production processes and many other defining elements that constitute the smooth running of the business entity.”
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