Circulating Capital
What Does it Mean?
The portion of an organization's investment, which is continually used and replenished in ongoing operations. Circulating capital can consist of operating expenses, raw material stock, inventories of finished goods or physical capital on hand. This is in contrast to constant (fixed) capital.
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Investopedia Says...
By calculating circulating capital you will get a better understanding of how much capital is tied up to generate profit. Fixed capital, on the other hand are funds tied up, which isn't generating much profit... Read more.97.
Wednesday, October 1, 2008
Circulating Capital
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