Project- Assessment of Working Capital

1. 1
MET FINANCIAL MANAGEMENT PROJECT
WORKING CAPTIAL ASSESMENT
MET MMM
SEMESTER II
Team Members
SAVIO FERNANDES- 12
RAHUL NAIR 32
AUSTIN TRINDADE- 55
AMIT SINGH- 49
SHIRISH AWASTHI 05
RAJESH SHETTY 47
VINAYAK CHAUHAN 07

2. 2
ASSESSMENT OF WORKING CAPITAL OF RUSHABH INFOSOFT LTD
Any enterprise whether industrial, trading or other acquires two types of assets to run its
business as has already been emphasised time and again. It requires fixed assets which are
necessary for carrying on the production/business such as land and buildings, plant and
machinery, furniture and fixtures etc. For a going concern these assets are of permanent nature
and are not to be sold. The other types of assets required for day to day working of a unit are
known as current assets which are floating in nature and keep changing during the course of
business. It is these 'current assets' which are generally referred to as 'working capital'. We are
by now already aware of the short-term nature of these assets which are classified as current
assets. It may be noted here that there may not be any fixed ratio between the fixed assets and
floating assets for different projects as their requirement would differ depending upon the
nature of project. Big industrial projects may require substantial investment in fixed assets and
also large investment for working capital. The trading units may not require heavy investment
in fixed assets while they may be carrying huge stocks in trade. The service units may hardly
require any working capital and all investment may be blocked in creation of fixed assets.
A set financing pattern is evolved to meet the requirement of a unit for acquisition of fixed
assets and current assets. Fixed assets are to be financed by owned funds and long-term
liabilities raised by a unit while current assets are partly financed by long-term liabilities and
partly by current liabilities and other short-term loans arranged by the unit from the bank. The
balance sheet of a unit under such dispensation may be represented as in next page.
The total current assets with the firm may be taken as gross working capital whereas the net
working capital with the unit may be calculated as under:
Net Working Capital = Current Assets - Current Liabilities
(NWC) (GWC) (including bank borrowings)
This net working capital is also sometimes referred to as 'liquid surplus' with the firm and has
been margin available for working capital requirements of the unit. Financing of working capital
has been the exclusive domain of commercial banks while they also grant term loans for
creation of fixed assets either on their own or in consortium with State level/All India financial
institutions. The financial institutions are also now considering sanction of working capital
loans.
The current assets in the example given in the earlier paragraph are financed asunder:
Current Assets = Current liabilities + Working capital limits from banks + Margin from
long-term liabilities

3. 3
Liabilities Assets
Capital
Fixed Assets
Long-term
liabilities
Margin NWC
Liquid Surplus
Working capital
limits from
banks
Current Assets
Current
Liabilities
This is the normal pattern of financing of current assets. However, a few units may be having a
negative net working capital as shown below:
Liabilities Assets
Capital
Long-term
Liabilities
Fixed Assets
Working capital
deficit
Current
Liabilities
Current
Assets

4. 4
It is evident from diagram 2 that current liabilities are more than current assets and a part of
short-term funds (current liabilities) have been diverted to finance fixed assets. Not only that
the unit is not able to provide any margin for working capital from its long-term sources, but it
is showing a net working capital deficit represented by the bracketed area in the diagram. This
situation may not be considered as satisfactory and the unit is experiencing liquidity problems
and has a current ratio of less than one. It may also be stated here that a large liquid surplus
may also not reveal a very encouraging position, as it would mean idle funds or a lower
turnover in working capital. It should, therefore, be the endeavour of every concern to ensure
optimum utilisation of all the resources at its command and have just adequate liquid surplus.
The assessment of working capital may involve two aspects as under
• The level of current assets required to be held by any unit which is adequate for
its day to day functioning, and
• The mode of financing of these current assets.
The value of inventory as given in the balance sheet is the position as on a particular day on
which the balance sheet is drawn and may not be the actual average requirement of the unit.
We will have to, therefore, evaluate the actual consumption pattern to arrive at a correct
decision.
OPERATING CYCLE CONCEPT
The day to day business operations of a concern of any nature and, size involves many
successive steps and final working results would depend on the effective combination of all
these steps. The steps in general may include.:
Acquisition and storage of raw material and other stores and spares required for manufacture
of any product.
 Actual production process when the raw material is subjected to different
processes to bring it to final shape of finished goods.
 Storage of finished goods awaiting sales.
 Sales of finished goods and realisations of sale proceeds.
All these steps put together form an operating cycle which can also be represented
diagramatically as under :

5. 5
Realisation Cash Raw Material
Stores & Spares
Bills Receivable/Sundry Semi-Finished Goods
Debtors
Sales Finished Goods
We start from cash to buy raw material etc. and after completing all the steps end up with the
cash. The intervening period required for completion of this entire process is the 'Operating
Cycle'. The operating cycle may thus be defined as the intervening period from the time the
goods or services enter the business till their realisation in cash. The study of this operating
cycle is obviously very important as the actual requirement of the unit may be limited to the
funds required to complete an operating cycle and the simplest formula for the working capital
requirement may be represented as under:
Total working capital requirement = Total operating expenses expecting during the year
No. of operating cycles in a year
This system of calculation of working capital requirement is not in vogue as it only helps to
assess the total requirement of a unit whereas the banks granting working capital limits would
be interested in proper classification of its various components. The concept of operating cycle,
however, throws light on various components of working capital required for the unit and these
components may be classified as under:
 Raw material stores and spares consumed in the production process. The
unit must have some stocks of these items for uninterrupted production.
 Manufacturing expenses such as wages, power and fuel etc. to be incurred
during the process of manufacture.
 Stocks of work-in-process/semi finished goods maintained by the unit to
complete an operating cycle.
 Stocks of finished goods awaiting sale. All the finished goods may not be
immediately sold.
 Administrative and selling expenses during this process.
 Bills receivable/debtors for credit sales.

6. 6
All or some of these components in varying proportions are required for any business.
CONCEPT OF MARGIN
Margin in relation to working capital has two concepts which need to be clearly understood.
The one concept of providing margin by way of liquid surplus i.e. from long-term liabilities has
already been explained. It must be clear by now that current assets shall partly be financed by
capital & long-term liabilities for any going concern. This gains importance while fixing overall
limits of working capital by the bank.
The other concept of margin as applicable to working capital limits is related to the value of
security charged to the bank as cover for these limits. Financial accommodation up to 100% of
the value of goods would not be granted by the banks and they would fix a certain margin on
the value of security which must be provided by the borrower and the balance amount will be
financed by the bank. The percentage of margin fixed on any security is dependent on its
nature.
FORMAT FOR ASSESSMENT OF WORKING CAPITAL
In good old days when the banks were mainly adopting security-oriented approach in lending,
no emphasis whatsoever was placed on assessment of limits as the credit decision was mainly
based on the security available to cover the advance. The concept of assessment of working
capital gained currency in early seventies and Reserve Bank of India proposed a scientific
method for this purpose. A format that would be utilised for assessment of working capital was
also prescribed. Various other formats and techniques for assessment have since been
developed for different kinds of projects, the earlier format nevertheless is still in vogue and is
made use of in all such cases where a specific method has not been prescribed. The proforma
as prescribed by Reserve Bank of India is reproduced below :
Assessment of Working Capital Requirements
Rs............ months raw material requirements
Rs.………. Weeks’/months' consumable stores and spares
Rs.………. Weeks’ stocks in process at any one time
Rs.(average period of processing value of raw material content in stock-in process and
manufacturing expense for the period of processing to be indicated)
Rs.………. Months’ finished goods at cost
Rs.………. Weeks’/months’ receivables representing credit sales
Rs.......... One months' manufacturing and administrative expenses
________________

7. 7
Total working capital requirement
Less: Credit available on purchases and advance payments received . Rs.
Working capital in business or liquid surplus Rs.
________________
Net working capital requirements Rs. (A)
Permissible Limits
Raw materials Rs.
(Less) Margin Rs.
Stock-in-process Rs.
(Less) Margin Rs.
Finished goods Rs.
(Less) Margin Rs.
Receivables representing supplies to Govt. Rs.
(Less) Margin Rs.
Receivables representing supplies to sundry parties Rs.
(Less) Margin Rs.
______________
Total limits Rs. (B)
______________
Net working capital requirements (A)
Permissible limits (B) Rs.
Deficit, if any (A-B)
.
It must, however, be noted that assessment of working capital is always done for future period,
while the financial statements reveal the financial position of a concern as it was at some point
of time in the past. If the calculations are based on the basis of the financial statements as on
some previous date, the results derived may not be workable. Furthermore the newly
established units may not provide any financial statements for the past period. The working
capital is always to be assessed on tile basis of projections for the next year. The first most
important point, therefore, is to make as accurate projections as possible for the next year. The
projections submitted to the bank are very critically examined in relation to past performance
of the unit, if any, future prospects and market for the ultimate product production capacity of
the unit and general rate of inflation expected during the year. The projections given for the
next year are, therefore, to be supported by convincing logic to stand scrutiny in the hands of
the banker.
We shall now make an attempt to define various components of working capital as taken in the
format and explain the most acceptable principles involved in calculating them for overall
assessment of working capital.

8. 8
I . …………………. months’ raw material requirements :
Every production unit will be required to maintain a minimum level of raw material in stock to
ensure continuous production. The level of stock may differ from unit to unit and inter alia
depends on nature of the raw material, its availability with particular emphasis on lead time
involved in procuring it, price level, consumption pattern etc. From the past records, it is
possible to find out the average stocking period of raw material with the following formula :
Average stocking period in months = Average stock of raw material
_____________________________________________
Average monthly consumption of raw material during the year
where
Average stock of raw material = Opening stock of raw material+ Closing stock of
raw material
______________________________________________
2
Average monthly consumption of
raw material during the year = Opening stock of raw material + Total purchases of
raw material- Closing stock of raw material of raw
material
_________________________________________________________
12
The average stocking period thus arrived may be taken as the requirement of so many months
of raw material for the unit and the estimated value of stocking of raw material required by the
unit can thus be determined on the basis of projected figures.
In case of new units where figures of past performance are not available, storage period may
have to be compared with storage period of such other units for the purpose of these
calculations.
II …………………………. weeks/months’ stores and spares
The calculation for requirement of these items may be done in a similar manner as in
case of raw materials. The average period of stocking required by the unit is generally,
done on the basis of past performance. After determining the average period, the
requirement is to be calculated on the basis of projected figures

9. 9
III ………………………… weeks’ stocks in process
Stocks-in-process is an item representing goods remaining in semi-finished form awaiting
certain further processing before these can be finally converted to finished goods. The
requirement of blockage of funds in these stocks will depend upon the processing period
involved in the manufacturing. The processing period may differ from unit to unit and in case of
new units it may have to be compared with existing units of similar nature.
Semi finished goods, however, possess another problem in evaluation. The value
representing manufacturing expenses is added to the cost of raw material to determine
the value of stocks in process. The value of stocks-in-process is thus related to the 'cost
of production’ which may be calculated as under :
Cost of Production
(i) Raw material consumed
(ii) Other spares
(iii) Power and fuel
(iv) Wages
(v) Repairs and maintenance
(vi) Other manufacturing expenses
(vii) Depreciation
(viii) Sub-total
[items (i) to items (vii)]
(ix) Add : Opening stocks in process
(x) Sub-total [item (viii) plus item (ix)]
(xi) Deduct : Closing stocks in process
(xii) Cost of Production [item (x) minus item (xi)]
The average period of stocking of 'stocks in process' may nom calculated with the following
formula :
Average period of stocking of = Average stock in process
stocks in process in days _____________________________
Daily cost of production
Average stock in process= Opening stock in process + Closing stock in process
2
Daily cost of production = Cost of production
365

10. 10
Average stocking period which may also be taken as average processing period may thus be
calculated from past records. The estimated requirements of the unit under this head may be
related to its projected figures as in case of raw material etc. The calculation will, however, be
based on the basis of cost of production which is the most acceptable principle of valuation of
'stocks-in-process'.
IV . ………………………. month’s finished goods
The stocking period of finished goods may also be different for different types of units and will
mainly depend upon the market conditions. The valuation of finished goods also possess a little
problem and most accepted principle is for their valuation in terms of cost of sale which is
calculated as under
Cost of sale = Opening stock of finished goods + Cost of production- Closing stocks of
finished goods.
Cost of sale is also equal to net sales minus gross profit.
Average period of stocking of finished goods may be calculated with the help of the
following formula:
Average period of stocking of finished goods in months =
Average stock of finished goods
_________________________
Monthly cost of sales during the year
where,
Average stock of finished goods = Opening stock of finished goods +Closing stock of
finished goods
___________________________________________________
2
Monthly cost of sales during the year = Cost of sales
___________
12
This period would give an indication as to the average period of stocking of finished goods by
the unit on the basis of its past performance. This average period so found may now be related
to the projected figures to find out the estimated requirement under this category. The finished
goods will, however, be related to cost of sales while estimating the requirements.
V ………………. weeks/months’ receivables representing credit sales:
All the sales by any unit may not be against cash in which case the unit would not require any
funds to be blocked under this head. A part of the sales might be effected on credit in which

11. 11
case the outstanding under debtors/bills receivable will form a part of total working capital
required by the unit. The average period of blockage of funds under this head may also likewise
be calculated with the following formula:
 Average period of credit in months = Average debtors
____________________ x 12
Total credit sales
 Average debtors =Opening balances Closing balance Opening balance of
Closing balance
of debtors + of debtors bills receivable
+ of bills receivable
_________________________________ +
__________________________
2 2
where the figures of credit sales are not separately available, we may take total sales figures in
the denominator for the purpose of above calculation.
After determining the average period of credit sales, the requirement of the unit under this
head may be related to the projected figures.
V1 ………………. One month’s manufacturing and administrative expenses
The unit has to meet the running, manufacturing and establishment expenses during the period
of manufacture and necessary provision for funds required for this purpose is necessary. The
monthly average expenditure can be determined by dividing total manufacturing and
administrative expenditure during the last year by 12. Suitable adjustment in the anticipated
expenditure for the next year may be necessary as per the projected figures.
The total of items No. I to VI is the requirement of the unit for working capital at the gross level.
The unit raises resources to meet these requirements from many sources besides the liquid
surplus already available with the unit The resources generally available at the command of the
unit may be as under:
CREDIT AVAILABLE ON PURCHASES
All the goods may not be purchased by any unit against cash and the concern may avail credit
for few purchases. The credit available from the market will reduce the requirement of the unit
for working capital.

12. 12
Creditors may be treated in the same manner as debtors while determining availability to the
unit under this component. Average period of credit available to the unit may be determined
according to the following formula:
 Average period of credit in months = Average creditors
_______________ x 12
Total credit purchases
 Average creditors =Opening balances Closing balance Opening balance of
Closing balance
of creditors + of creditors bills payable +
of bills payable
_________________________________ +
__________________________
2 2
Where figures for credit purchases are not separately available, the figure of total purchases
may be taken in the denominator for the purpose of the above calculations. After determining
the average number of days for which credit is available, it should be possible to determine the
average total credit available to the unit by relating it to the projected figures.
ADVANCE PAYMENT RECEIVED
Advance payment for sales may sometimes be received which means that additional
funds are available with the unit there by reducing its working capital requirements. Any
such advance payments that are received by the unit must be accounted for while
determining the actual requirement.
LIQUID SURPLUS
The concept of liquid surplus has already been explained and it represents excess of current
assets over current liabilities thereby meaning that some long-term liabilities have already been
utilised by the unit for creation of current assets. This is also one concept of margin being
provided by the unit for working capital as already explained.
Adjustments made in the gross working capital as already calculated for the above three items
will give an idea of net working capital requirements of the unit which may be availed from the
bank-.
The banks may not be willing to finance all the components of working capital which have been
taken into consideration for calculation of gross working capital requirements. The
manufacturing and administrative expenses may not be financed by the bank. Banks also
stipulate margin requirements, the other concept of margin, on the value of security of raw
materials, semi finished and finished goods etc. while sanctioning the limits. Banks may be

13. 13
willing to finance sales operation by purchasing/discounting bills receivable and may not be
very keen to finance 6ook debts or a very high margin may be stipulated for such advances. The
following method is generally adopted by the banks for fixing limits on various components of
working capital :
1. Raw Materials : Credit to the unit is generally available for purchase of raw material
and the same is to be deducted while fixing credit limit against raw material. The margin
applicable for raw material is low in comparison to the margin applicable for semi
finished and finished goods. The margin ranging from 15 to 25% may be fixed depending
upon the nature of the material and standing of the unit.
II. Stores and Spares : A small limit is granted against stores and spares and these are
generally included as a part of raw material only for the purpose of calculating the credit
limits. If a separate limit is sanctioned, it will be treated in the same manner as limit
against raw materials.
III. Semi-finished goods : Semi-processed goods do not form a good security as its
realisable value cannot be exactly determined. A higher margin upto 40% may be
insisted upon by the bank while fixing a credit limit against stocks in process.
IV. Finished goods : The margin stipulated on finished goods may generally be higher
than the margin on raw material and may be lower than that stipulated for stocks- in
-process.
V. Bills receivable/book debts: Banks generally prefer to grant facilities against bills
receivable and a very low or no margin may be stipulated for supplies to Government or
other sundry parties. For finance against book debts margin stipulation may be as high
as 50% and only a small limit may be permitted.
No bank advance is granted against manufacturing and administrative expenses which are to be
borne by the unit itself. We have thus calculated the actual working capital requirements by the
unit and also the limits sanctioned there against by the banks. Different considerations are
involved while arriving at these figures and it may sometimes be possible that limits sanctioned
by the bank are not adequate and are not equal to the total working capital requirements. The
unit has to investigate as to the reasons for such happening and has to take corrective steps, if
possible or to bring in more funds in the business to correct the situation.
We have made detailed analysis of the balance sheet of a company in Appendix 14.1 given at
the end of chapter 14 and will now attempt to assess the working capital of the unit on the
basis of above discussion. It may, however, be mentioned even at the sake of repetition that in
actual practice assessment is done on the basis of projected figures of sales for the next year. In
this exercise also we have presumed a uniform increase of about 10% in all the figures for the
next year.

14. 14
(All figures are taken in Rupees in lakhs.)
I . raw material requirement:
(Figures available in Schedule H)
Average stock of = Opening balance of raw material + Closing stock of raw material
raw material
___________________________________________________
= 458.23 +652.77
2
= 555.50
Average monthly consumption of raw material during the year = Opening stock of raw
material + Total purchase - Closing stock of raw material
12
= 458.23 + 3364.63 – 652.77
12
= 264.17 per month
 Average stocking period in months = Average stock of raw material
__________________________________
Average monthly consumption of R.M.
= 550.50
264.17
= 2.1 months (app.)
2.1 months is thus the average stocking period for raw material by the unit. Presuming the
same level of production but anticipating a general increase of 10% in all factors of production
due to inflation and other such reasons the raw material requirement of the unit will thus be
worked out as under:
2.1 months’ requirement of raw material
= 2.1 x 290.58 = 610.22
II……………week's/months' stores and spares :
 Average stock of stores and spares = 9.93 +7.85
2
= 17.78
2
= 8.89

15. 15
Average monthly consumption figures are not available and the requirement of the unit against
stores and spares may be taken as equivalent to Rs. 10 lacs after providing necessary increase
of about 10% as already discussed.
III . …………. weeks’ stocks in process:
 Cost of production = 3,932.82
 Weekly cost of production = 3,932.82
52
= 75.63
 Average stocks in process = 188.92+215.08
2
= 202
 Average period of process = Average stock in process
Weekly cost of production
= 202 x 52
3932.82
= 2.68 weeks
The requirement of the unit for stock in process after providing the 10% increase over the last
year figures would amount to
2.68 weeks stocks in process i.e., cost of production = 2.68 x 4326.1
52
= 222.96
IV ……………. months’ finished goods:
 Cost of sale = Opening stock of finished goods + Cost of production- Closing stocks of
finished goods.
= 385.73 + 3,932.82 - 483.92 = 3,834.63
 Average stocks of finished goods = Opening stock of Finished goods+ Closing stocks of
finished goods
2
= 385.73 + 483.92
2
= 434.82
 Average period of stocking of
finished goods in months = Average stocks of finished goods
Cost of Sales
= 434.82 x 12
3843.63

16. 16
= 1.36 months.
After providing 10% increase under this factor also the requirement of the unit under this
component would be
1.36 months' of finished goods i.e., cost of sale = 1.36 x 4,218.09
12
= 478.05
V…………weeks/months bill Receivable representing credit sale
The figures of opening balance of bills receivable/debtors are not given and the figures as per
the balance sheet only is taken to find out the requirement of the unit. The figures of credit
sales are also not separately given and hence figures of total sales are taken for this purpose:
Average period of credit in months = Average Debtors
Sales
= 738.7 12
4832.57
=1.83
The requirement of the unit for bills receivable and debtors will now be computed as under:
1.83 months of bills receivable of sales after providing projected increase of 10 %.
= 1.83 x 5,315.82
12
= 812.56
VI. ……………….. One month's manufacturing and administrative expenses
 Total operating expenses = 1211.32
 Expenses for one month = 1211.32
12
= 100.94
 Anticipated expenses in the next you after providing for 10% increase = 111.00
CREDIT AVAILABLE FOR PURCHASE
Figures of opening balances under creditors are not given and necessary calculations are made
on the same basis as in case of sundry debtors.
 Average period of credit available = Average Creditors x 12
in months Purchases
= 394.85 x 12

17. 17
3364.63
 Credit available for purchases to the unit = 1.41 month
1.41 months of credit after providing
projected increase of 10% = 1.41 x 3701.09
12
= 434.33
We may now proceed to compute the total working capital requirements for the unit as under :
Working capital requirements Rs. in lacs
2.1 months requirements of raw materials 610.22
- months requirement of stores and spares 10.00
2.68 weeks requirement of-stocks in process 222.96
1.36 months’ of finished goods 478.05
1.83 months’ of bills receivable & sundry debtors 812.56
1 month’s manufacturing and administrative expenses 111.00
__________
Total requirement 2244.79
__________
Less :
Credit available on purchases and advance payments received 434.33
Liquid surplus/net working capital available in business
(Current Assets - Current Liabilities) 200.98
(After making adjustment for 10% increase)
____________
Net working capital requirements (A)1609.48
_____________
Permissible Bank Limits
Raw material 610.22
Less credit available 434.33
175.89
Less margin @ 25% 43.97
____________
131.92
Stock in process 222.96
Less margin @ 40% 89.18
133.78
Finished goods 478.05

18. 18
Less margin @ 30% 143.41
_____________
334.64
Receivable
Book debts - 412.56
Margin @ 50% 206.28
Bills Receivables - 400
Margin – Nil 400.00
_____________
606.28
____________
Total Limits (B) 1206.62
_____________
Net working capital requirement 1609.48
Permissible bank limits 1206.62
Deficit = 1609.48 - 1206.62 = 402.86
The unit is now faced with a deficit of Rs. 402.86 lacs in working capital and the various options
available to the unit to meet this deficit may be as follows :
 To arrange for additional capital to that extent to wipe off the deficit.
 To arrange for long-term loans/deposits to strengthen the long-term resources of the
unit to provide necessary margin for working capital.
 To critically examine the level of current assets held by the unit. It may be possible that
the unit may be able to work with lower inventory and may make some earnest efforts
to quickly realise its debtors thereby reducing the level of working capital requirements
of the unit itself.
 To negotiate with the bank to reduce margin requirements so that additional limits are
available thereby reducing the deficit.
A package measure consisting of one or all of these steps is necessary to improve the working
condition of the unit so that it is not starved of the working capital.
The format as suggested by Reserve Bank of India has been the first attempt to assess the
working capital requirement of industrial units on a scientific basis. The format has been duly
amended for smaller units by Puri Committee. The assessment of requirements of borrowers
covered under various segments of priority sectors is done on different consideration and
standard forms and procedure have been developed for this purpose.
A new dimension to financing of working capital by banks was given by Reserve Bank of India in
1975 by accepting the recommendations of 'Tandon Committee' which were later modified by
‘Chore Committee’. These recommendations were applicable for large advances enjoying
working capital limits of Rs. 50.00 lacs and above. Reserve Bank of India also prescribed a

19. 19
standard format for assessment of working capital limits for accounts covered under 'Credit
Authorisation Scheme' later on renamed as, ‘Credit Monitoring Arrangement. This form has,
however, been adopted by many of the banks for assessment of limits for working capital
advances exceeding Rs. 10.00 lacs.
Different forms adopting different techniques are thus in circulation for assessment of working
capital depending upon the size and category of projects as under:
(i) Form for assessment of requirements of SSI units upto credit limits of Rs. 2,00,000/-
(including composite loans)
(ii) Form for assessment of requirements of SSI units for credit limits of above Rs. 2,00,000
and upto Rs. 15.00 lacs
(iii) Form for assessment of requirements for units with credit limits above Rs. 15.00 lacs
and upto Rs. 1.00 crore
(iv) Form for assessment of requirements for units with credit limits above Rs. 1.00 crore.
(v) CMA Data form for assessment of requirements for units with credit limits above Rs.
10.00 lacs or as per the cut off point fixed by individual banks.
(vi) Assessment of limits for projects falling under various segments of priority sector.
The format at (v) has been discussed in chapter 17 on ‘New System of Reporting and Loan
System for Delivery of Bank Credit’.
It may, however, be added here that assessment of working capital will basically involve all
these factors in all the methods and though this format might have been replaced by other
forms, yet its importance hardly needs any emphasis as will be proved in subsequent
discussions.