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how to prepare Balance sheet strong for Loan and CC

SUMIT R. DUBEY (ACCOUNT EXECUTIVE) (46 Points)

03 August 2018

I want to ask that when we prepare p n l and balance sheet then which point we focus at that time. solve my misunderstanding.

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Prakash Gehani (Consultant & Teacher(Whatsapp 8718057907)) (1306 Points)
Replied 04 August 2018

Following points should be considered:
1. Sales & Stock: CC limit is calculated on the basis of sales and stock. Higher the sales higher the limit and vice versa.

2. Ratios: Debt equity ratio, Current Ratio, Stock and Debtor turnover ratio, Interest coverage ratio.

3. Cash Flow: There should be sufficient cash flow in future to pay instalments of term loan.

4. Profit: There should be sufficient profit to pay interest.

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