Cma report

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soham bhatt (Querist)
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19 December 2012 At the time of preparing CMA report for pvt. Ltd company, where unsecured loan from directors are shown.? and how it will affect my MPBF..?

CA N RAJA

CA N RAJA (Expert)
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23 December 2012 If Promoters promise that they will not withdraw USL for a longer period, (as required by the banker) it can be treated as part of Long Term Liability.

Its impact on MPBF:

a) Unsecured loan will improve the long term funds and improve the Net Working Capital.
b) When NWC improves, Current Ratio of the company will improve and will provide comfort for the Bankers.

Note:
Higher the amount of USL, worser will be the TOL / TNW. Hence, an optimum combination of equity and USL should be preferred.

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