Working capital
This query is : Resolved
05 November 2012
why to calculate debtors at cost in case of calculating working capital? why to remove profit element from it?
CA. Subhash Dangi
(Expert)
06 November 2012
While calculating drawing power (DP) to borrowers on working capital limits, the sundry debtors should be shown at cost since bankers are not financing on the profit portion of sales as per Banking Norms under RBI guidelines.
19 November 2012
Yes I agree with the expert. In addition to this the bankers do not finance without keeping considerable margin and this is also one of the reasons
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