5. What are the basic ratios that should be taken care of while preparing the balance sheet for cc - limit from banks ? Any other point that should be kept in mind while preparing such a balance sheet? Please guide.
sumit (CHARTERED ACCOUNTANT) (59 Points)
01 May 20085. What are the basic ratios that should be taken care of while preparing the balance sheet for cc - limit from banks ? Any other point that should be kept in mind while preparing such a balance sheet? Please guide.
CMA A.K.ROY
(SERVICE)
(188 Points)
Replied 01 May 2008
BALANCE SHEET
1. CURRENT RATIO SHOULD BE 1.33 :1. WHILE CALCULATING PBF UNDER 2ND METHOD OF TANDON COMMITTEE. SAY CA IS 100 AND CL IS 75 THEN RATIO COMES TO 1.33. THAT IS BANK REQUIRED MARGIN OF 25%.
2. CA DOES NOT INCLUDE NON-CURRENT ASSETS INCLUDING FDRs GIVEN AS PLEDGE FOR ILC/FLC LIMIT.
3. BASIS FOR COMPUTATION OF COMPONENTS LIKE RECEIVABLES,INVENTORY,CREDITORS FALLS IN ALMOST SAME RATIO OF PAST YEAR.
4. CL TO INCLUDE INSTALLMENTS FOR TERM LOAN DUE WITHIN ONE YEAR.
5. BANK BORROWING REQUIRED SAY RS 800 LACS SHOULD BE SAME FOR THE PROJECTED PERIOD.
6. PROCEED WITH PY BALANCE SHEET AND PUT THE SAME IN CMA DATA FORMAT.
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