Bank Stock Statement

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This query is : Resolved

sunil (Querist)

17 November 2010 HI
I need to submit bank stock statement every month to my banker, what is the importance of it.

How to calculate and show it
is it Purchase - sales = stock.
Suppose i have done 10 lakhs purchase and 5 lakhs sales then my stock will be 5 lacs or any other calucation is involved.....

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

17 November 2010 You must have taken CC facility from the Bank and the money which you are utilizing in the business are resulting, directly or indirectly into income.

On the basis of your monthly stock statements
(MST) the bankers ascertain the drawing power (DP), beyond which they would not allow to withdraw money from your account. Suppose your limit is Say Rs. 20 lacs but the DP calculated on the basis of MST comes to Rs. 17 lacs then you would be eligible to utilise upto the DP.

Stock= Purchase- Sales*.94
Assuming that GP is 6% (1.00-.06=.94)
If average GP is say 8% then you have
Stock= Purchase- Sales*.92

You may say -
Stock= Sales -Cost of Goods Sold.

Message likes : 1 times

CA.Madhusudan B.P.

CA.Madhusudan B.P. (Expert)

17 November 2010 Generally each bank has its own standard formats for this purpose.
Mr. Paras Bafna rightly said that monthly stock statement are being provided to banker for both drawing power determination & whether there is any loss in the security provided by the constituent.

Just want to add one thing
opening stock + purchase - COGS = Inventory

sunil

sunil (Querist)

20 November 2010 HI
thanks for the clarifications.
any pratical literature on this please share with me