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| This query is : Open
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Swapnil Tayal
( Author )
09 July 2012
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Hello Sir,
I want to know which ratios banks consider for sanctioning Cash Credit Limit and what are the standards for those ratios.
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B.Chackrapani Warrier
( Expert )
10 July 2012
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1) Current ratio.
>1.33 for traders.
>1.75 for others.
2) Inventory turnover ratio.
< 60 days.
3) Total outside liabilities to total net worth.
< 2.50
4) Debt equity ratio(debt divided by equity).
< 1.50
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Swapnil Tayal
( Author )
10 July 2012
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Dear Sir,
If a new project we need 3 cr of term loan and 6.5 cr Cash Credit limit. How much equity capital, reserves and quasi capital will be required.
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