Could anyone tell me the procedure to calculate the "Required Turnover of the Company",if it requires a loan of Rs 15 Cr
Thanks &Regards
Rohit Shah (CA Job) (24 Points)
28 June 2013Could anyone tell me the procedure to calculate the "Required Turnover of the Company",if it requires a loan of Rs 15 Cr
Thanks &Regards
sachin
(student)
(221 Points)
Replied 29 June 2013
You could use theMaximumPermissible Bank Finance method which consists of two method-
1) Turnover method
2) Working Capital Method
In case of Turnover Method- finace amount would be calculated as follows
A)25% of Turnover
B) 5% Of Turnover( Margin Kept by bank)
C)Actual Net Working Capita l(NWC)
d)A-B
e)A-C
F) Whichever is Lower of d or e---(Loan Amount)
In Case of working capital method finance amont would be as follows:
A)Total Current Asset
B) Total Current Liabilities (Excluding Bank Borrowings)
C) Working Capital(A-B)
D) 25% of working Capital
E)Actual Net Working Capital
F) C-D
G) C-E
H) Whichever is Lower of F or G----(Loan Amount)
CAclubindia
