• Funds are mainly used to acquire fixed assets or current assets.

4.1 Fixed Assets

• Normally large items kept for a considerable period for business operations.
• Examples: land and buildings, fixtures and fittings, plant and equipment, company-owned vehicles.
• Hire vehicles do not form part of a transport business's fixed assets.

4.2 Current Assets

• Fluctuate during normal day-to-day trading.
• Examples: fuel stocks, parts and consumables, debtors, cash in hand or bank.
• Funds do not have to be matched rigidly: management chooses the most appropriate available source.
• Cash is the ultimate liquid asset.
• Debtors can usually be converted to cash relatively quickly through effective credit control.
• Stocks may take longer to convert into cash.