Are there different types of Working Capital?

When you start a grocery shop business, you invest money (initial capital) for procuring the grocery items. If the business runs successfully, you keep on increasing the stock (but from which sources?). You increase the stocks by ploughing back the profits earned, by keeping the initial capital in the business or by increasing the initial capital (i.e. putting more money). You will need to maintain a minimum level of Stocks in the Shop (i.e. keeping minimum level of money invested in the Current Assets) in order to run the business at minimum level. Therefore, this money can be called the Permanent Working Capital.

Depending on the business needs, you will be increasing the Current Assets (over and above the minimum required level) or reducing the Current Assets (but not reducing below the minimum required level). This increase or decrease in Current Assets will involve increase or decrease in money invested in Current Assets and called the Variable Working Capital.