Project Report – Working Capital Management WORKING CAPITAL – Meaning of Working Capital Capital required for a business can be classified into two main categories, 1) Fixed Capital 2) Working Capital Every business needs funds for two purposes for its business and to carry out its day-to-day transactions. Long terms funds are required to create production facilities through the purchase of fixed assets such as land, building, furniture, etc. Investments in these assets represent that part of firm’s capital which is blocked on the stable or fixed basis and is called fixed capital. Funds are also needed for short-term plans for the purchase of raw material, payment of wages and another day – to- day expenses, etc. These funds are known as working capital. In simple words, working capital refers to that part of the firm’s assets which is required for financing short-term or current assets such as cash, marketable securities, debtors & inventories. Funds, t