Why might businesses use fixed assets?

Businesses use fixed assets primarily to support long-term operational needs. Fixed assets, such as buildings, machinery, and equipment, are essential for the daily operations of a business and facilitate the production of goods or provision of services over an extended period. Investing in these assets allows a business to establish a reliable foundation for its operations, ensuring that it can meet production demands and maintain efficiency.

These assets are not intended for immediate profit generation or quick cash flow, as they are typically tied up in long-term investments that require time to generate returns. By focusing on fixed assets, businesses position themselves for sustainable growth and operational stability, recognizing that these resources are integral to their long-term strategic goals.