What is the requirement to obtain CC Limit Rs.5 Lakh ?

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Vijay Kr. Mishra (Querist)
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25 July 2009 How should prepare a Balance Sheet and Profit & Loss A/c to obtain CC Limit Rs.5 Lakh from a Bank and What should be the income in ITR ?

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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25 July 2009 (1) Debt Equity Ratio after considering loan should be not exceed 1 : 3.

(2) Net profit + depreciation should be more than repayment of interest and loan principle part if any. (ie 1.33)

(3) Current ratio should be 1: 2

(4) Any loans existing should not be withdrawn or repaid during the pendency of the Bank loan.

(5) Turnover should be 5 times of your loan expectation. ie 25 Lakhs.

(6) Your stock should be minimum of rs.7.5 Lakhs paid stock.

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