Services
CMA Data Preparation
Credit Monitoring Arrangement (CMA) data is the standard format in which Indian banks read a borrower's past and projected financials. A well-prepared CMA reconciles to the audited accounts, explains every assumption and answers the questions an appraiser would otherwise ask.
The six CMA forms
| Form | Contents |
|---|---|
| Form I | Particulars of existing and proposed credit limits from all banks and institutions. |
| Form II | Operating statement: sales, cost of production, profit before and after tax, for past, current and projected years. |
| Form III | Analysis of balance sheet: liabilities and assets classified as current, term and net worth. |
| Form IV | Comparative statement of current assets and current liabilities, with holding periods. |
| Form V | Computation of Maximum Permissible Bank Finance for working capital. |
| Form VI | Funds flow statement: sources and uses of long-term and short-term funds. |
Ratios the appraiser will compute
- Liquidity: current ratio and net working capital.
- Leverage: total outside liabilities to tangible net worth (TOL/TNW) and debt-equity.
- Repayment capacity: debt service coverage ratio (DSCR) and interest coverage.
- Efficiency: holding periods for raw material, work in progress, finished goods and receivables, and creditors' period.
- Profitability: margins, return on capital and break-even.
Each lender applies its own benchmarks to these ratios through its credit policy. We flag ratios that are likely to attract queries and explain them in the covering note.
How we prepare it
- 1
Reconcile
Past years taken from audited financial statements and the current year from provisional figures, reconciled to GST returns and bank statements.
- 2
Project
Assumptions for capacity, prices, costs and holding periods, documented and linked to the DPR or business plan.
- 3
Test
Sensitivity of DSCR and MPBF to lower sales or margins.
- 4
Present
CMA in the bank's template with a short covering note on assumptions and key ratios.
Want a structured view of your project?
Share the outline. We review it against our five-step approach and come back with the incentive scope, viability risks and capital gaps we see.