Funding & CMA Report Preparation CMA means Credit Monitoring Arrangements. Specific format is provided by Bank referred as CMA Report / CMA Data wherein the past and projected financial performance of a business is compiled in a that format. It is compiled with all the required financial ratios and metrics to help Financial Analysts and Bankers to ascertain the financial health of a business. Most Bankers request a business loan applicant to prepare CMA report to understand the flow and application of funds in a business. A professionally prepared CMA report can improve the chances of obtaining bank loan.
1. Particulars of current & proposed limits This document is a basic document which is to be provided by the borrower to the banker. This statement states about the existing fund & non-fund based credit limits, their usage limits and history. the statement also contain the proposed or applied limit of the borrower 2. Operating statement This statement indicates the borrower’s business plan showing the Current financial position and profit position for 3 to 5 years (depends) 3. Analysis of Balance sheet This statement specifies the net worth position of the borrower for the future projected years and gives a complete picture of the financial position of the borrower. 4. Comparative statement of Current Asset & Current liabilities This statement provides comparative analysis of the movement of the current assets & liabilities. Basically, this analysis helps to decide the capacity of the borrower to meet the working capital requirements and the actual working capital cycle for the projected period.
5. Calculation of Maximum Permissible Bank Finance (MPBF) It shows the borrower’s capacity to borrow money. This includes a calculation which indicates the Maximum Permissible Bank Finance. 6. Fund flow statement The main objective of this statement is to capture the movement of the fund for the given period. it indicates the fund position of the borrower with reference to the projected balance sheets and MPBF (Maximum Permissible Bank Finance) calculations. 7. Ratio analysis This statement provides key financial ratios for the Financial Analysts and Bankers use. The basic key ratios are GP (Gross profit) ratio, Net profit ratio, Current ratio, Quick ratio, Stock turnover ratio, Net worth, the ratio of Net worth to Liabilities, DP limit, MPBF, Asset turnover, Current asset turnover, Working capital turnover, Fixed asset turnover, Debt-Equity ratio etc.