08 July 2010
hello expert, 1)For Working capital finance & finance other than WC are the same forms I to VI used? 2)Projections are to be made for how many yrs? 3)How many yrs audited B/S is required? 4)what documents are submitted to the bank for raising WC loan? 5)Which ratios are to be calculated for WC?
08 July 2010
1. same form but for term loan a seperate project report is required. 2. two years projection for WC and minimum four year for term loan. 3. last two years 4. last two year audited balance sheet and projected balance sheet for the above year. 5. Last six month sales and purchases. 6. CURRENT RATIO TOL/TNW PBIDT/INTT. PAT/NET SALES (%) ROCE (%) INV.+REC./SALES (DAYS)
08 July 2010
Yes Kirti, you are right. It means estimated for CY based on the transactions occurred till date and Projected statements for next years.
Further some points for consideration.
1) Ensure that Current ratio must be at least 1.33.
2) The amount sales must at least 5 times that of the loan amount. Every bank has different rules of granting loans, however generally 20% -25% of the sales amount is considered as loan.
3) While preparing Projected b/s, consider any major changes planned by management, like any major purchase of asset, raising of capital, settlement of any existing loan etc..
08 July 2010
What sort of information do you want? There are many queries and Forums on CMA on CCI like the links below. In case, you have any special query on any point you can ask here or send me the PM. i will try to give you the answer, if I Can.
09 July 2010
Rahul, how to make the projections for the next 2 years? I've no idea but want to understand so pls write the steps right frm the begining.
09 July 2010
For CMA, Show the B/S & P&L in vertical Format.
As an Example to explain you, lets take the example of 5 years in which first 2 years are actual, 3rd is the estimated, and next two years is projected.
These 5 years are put in vertical format in 5 columns of the excel sheet.
1. Put the actuals values in the first two columns. 2. Enter the estimated value in 3rd column with the actual incurred to date and convert them into yearly basis proportionately. 3. Now for the projected anayise the trend from the last 3 years and if it is increasing put the figures in an increasing way in the 4th and 5 th year or if decreasing then decreasing. 5. Also consider any special consideration or event which the management tells you like purchase of an aset in next 2 years or introduction of additional capital or raising of any loans and adjust the projected figures accordingly.
As an example.
Sales 50,2540 55,740 61,250 65000 72000
Tel Exp. 2125 2356 2640 2900 3200 Assets 71250 76523 81250 90000 140000 (Suppose management says that they are purchsaing special machinery of 40000 in 5th year)
1)If no specific info is given by mgmt for a expense/income then can we use trend() or forecast() function of excel to project data for that exp./income? 2) Does the CMA format vary from bank to bank? 3)finally, does the bank give their format(forms 1 to 6) in soft copy wherein we can enter the co's data?
once again I thank you for your efforts in replying my questions!!!!!
09 July 2010
Thansk for you gesture. Its my pleasure to guide you, no special need for clicking thanks.....I understand your feelings and appreciate it..thanks
10 July 2010
Kirti, The answers to your questions are >
1. Yes definitely you can use the trend function. The projected figures are decided by you only. You can take anything, the only point is that there should be logic of everything. If trend is followed, then its ok, if trend is not followed then why not. Its not so that that if amount is increasing , then you have to put the increasing amount in next years too. If you believe it will reduce in next years, then you can put decreasing value too.
2. Generally CMA format varies from Bank to Bank. however, for financial part there are no major changes , just minor one. Also, on an overall, the difference in the formats are just cosmetic and in presentation only. Broadly all the formats requires more or less the same information.
3. For soft copy of format, i am doubted that bank can have it. In case, they have then it will be good. However, you can have the the hard copy, and the formats provided here can be modified little bit in order match them with the bank's format. I hope there are some minor changes only.
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