28 December 2009
In stock audit of bank, generally it is mentioned that only paid stock are to be financed. While debtors for 90 days are only to be financed. My question is in arriving at paid stock for drawing power whether all creditors in the books are to be deducted from the stock or whether stock for which payments are outstanding is to be deducted from the stock?
For Ex. Total Stock is 80 lacs, Total Debtors are 30 lacs ( outstanding for less than 90 days ) Total Creditor are 70 lacs (all creditors which are outstanding for a particular period ) Total Creditors 50 lacs ( which are outstanding for less than 90 days ) Margin on stock is 25 % and on book debts is 30 % Please guide me in arriving at drawing power.
02 January 2010
Stock for which payments are outstanding is to be deducted from the value of stock held at particular date.
90 days calculation is not relevant for Creditors, so in your case you should have to work out the amount of creditors against the stock to be financed before discounting with margin 25%.
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