CMA reports
This query is : Resolved
13 January 2011
What is CMA reports? Why they are prepared? Where are they used?
14 January 2011
CMA means Credit Monitoring Arrangements. This full form of
CMA is as given by Reserve Bank of India. For arranging
working capital finance information about income, expenses,
assets & liabilities is required to be given in a specific
format to the bank by applicant. This specific format is
referred to as CMA Report / CMA Data. Audited P & L A/c &
Balance Sheet of at least last 1 year, estimates of current
year & projections of next at least 2 years are provided to
bank by the applicant along with Funds Flow Statement,
Ratio Analysis, Comparative Statement of Current Assets &
Current Liabilites & Statement of Maximum Permissible Bank
Finance. Number of years for which data is required may
vary from bank to bank. Even after getting the finance such
data is required to be submitted to the bank periodically.
CMA is as given by Reserve Bank of India. For arranging
working capital finance information about income, expenses,
assets & liabilities is required to be given in a specific
format to the bank by applicant. This specific format is
referred to as CMA Report / CMA Data. Audited P & L A/c &
Balance Sheet of at least last 1 year, estimates of current
year & projections of next at least 2 years are provided to
bank by the applicant along with Funds Flow Statement,
Ratio Analysis, Comparative Statement of Current Assets &
Current Liabilites & Statement of Maximum Permissible Bank
Finance. Number of years for which data is required may
vary from bank to bank. Even after getting the finance such
data is required to be submitted to the bank periodically.
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14 January 2011
Some points which are generally considered while preparing CMA Data >
- The current ratio should be at least greator than 1.33.
- The sales should be generally 4 or 5 times of the amount of loan.
- There should be sufficient stock to act as collaterally to the loan amount.
- In case, there is another loan, the bank requires the status of the loan and defaults made, if any.
- The loan payback capacity of the firm identified by the cash and bank balance, debtors collection period etc.
- Various ratios are to be computed related to working capital and assets.
- The capital contribution in relation to the loans and liabilities.
Link for some formats is given below. also check the files section for more.
https://www.caclubindia.com/share_files/cma-data--20547.asp
https://www.caclubindia.com/share_files/cma-data-19315.asp
- The current ratio should be at least greator than 1.33.
- The sales should be generally 4 or 5 times of the amount of loan.
- There should be sufficient stock to act as collaterally to the loan amount.
- In case, there is another loan, the bank requires the status of the loan and defaults made, if any.
- The loan payback capacity of the firm identified by the cash and bank balance, debtors collection period etc.
- Various ratios are to be computed related to working capital and assets.
- The capital contribution in relation to the loans and liabilities.
Link for some formats is given below. also check the files section for more.
https://www.caclubindia.com/share_files/cma-data--20547.asp
https://www.caclubindia.com/share_files/cma-data-19315.asp
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