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CMA data format.
Forms I to VI, MPBF and ratios, as banks ask for them. Download a complete sample in Excel.
What CMA data is.
CMA stands for Credit Monitoring Arrangement. It is the set of forms a bank uses to assess a working capital limit or a term loan: two or three years of audited figures, projections for the years ahead, the bank finance the business can carry and the ratios behind it.
The six forms.
| Form | What it shows |
|---|---|
| Form I | Particulars of existing and proposed limits from banks |
| Form II | Operating statement: sales, cost of sales, operating profit, interest, tax and profit, year by year |
| Form III | Analysis of balance sheet: current and term liabilities, net worth, current and fixed assets |
| Form IV | Comparative statement of current assets and current liabilities, with holding levels in days |
| Form V | Computation of maximum permissible bank finance (MPBF) |
| Form VI | Fund flow statement: long-term and short-term sources and uses |
How the bank works out the limit.
Second method of lending (Tandon Committee).
The borrower brings 25% of current assets from long-term funds; the bank finances the rest of the working capital gap. MPBF = 75% of current assets − current liabilities other than bank borrowings.
Turnover method (Nayak Committee).
For smaller limits: working capital of 25% of projected annual turnover, of which the borrower brings 5% of turnover and the bank finances up to 20%.
The ratios banks check.
- Current ratio, usually at least 1.33.
- Total outside liabilities to tangible net worth (TOL / TNW).
- Debt service coverage ratio (DSCR) for term loans, usually at least 1.5.
- Inventory, receivable and payable holding in days.
From the audited balance sheet to the bank's forms. In one step. Schedule III Builder takes the audited years from the statements, projects the next years from assumptions you can change, and tells you the working capital finance and term loan the client can seek, with what would raise more.