CMA DATA

Prepared by Anand Goratela

Senior Article
Shah Teelani & Associates
FINANCE IS NOT A TERM BUT A LIFELINE
FOR AN ORGANISATION !!!
 INTRODUCTION
• What is CMA Data?

• CMA Data means Credit Monitoring

Arrangement Data.

• This Data is provided by a company to bank for

getting the loan from bank.

• Bank analyses this data and then take the

decision of giving loan to a company.
• IT BASICALLY CONTAINS 7 STATEMENTS WHICH HELP
BANKER TO UNDERSTAND THE FINANCIAL HEALTH OF
THE COMPANY :

1.Particular of existing & proposed limits

2.Operating statement
3.Analysis of Balance sheet
4.Comparative statement of Current Asset & liabilities
5.Calculation of MPBF
6.Fund flow statement
7.Ratio analysis
 1. PARTICULAR OF EXISTING & PROPOSED
LIMITS

• This is the first statement in the CMA Data which contains the present fund
& non fund based credit limits of the borrower and their usage limits and
history.

• Along with present fund limits what is the proposed or applied limit of the
borrower will be mentioned in this statement, this is an basic information
document which provided by the borrower the banker.
 2. OPERATING STATEMENT

• This is the second statement which provided by the borrower, this indicates
the business plan of the borrower which gives the current sales, direct &
indirect expenses, profit before & after tax along with the projections of
sales, expenses and profit position for the 3 to 5 years based on the
borrower working capital request.
• This statement is a scientific analysis of current & projected financial and
profit generating capacity of the borrower.
 3. ANALYSIS OF BALANCE SHEET

• Balance sheet analysis for the current & projected financial years is the
third statement in CMA data.
• This statement gives the detailed analysis of Current & noncurrent assets,
fixed assets, cash & bank position, current & noncurrent liabilities of the
borrower.
• Also this statement indicates the net worth position of the borrower for the
projected years. Balance sheet analysis gives a complete financial position
of the borrower and cash generating capacity during the projected years.
4. COMPARATIVE STATEMENT OF
CURRENT ASSET & LIABILITIES

• Fourth statement which gives the comparative analysis of

current assets & current liabilities movement of the borrower.
• This basically decides the actual working capital cycle for the
projected period and the capacity of the borrower to meet their
working capital requirements.
 5. CALCULATION OF MPBF
• This is a very important statement and calculation which indicates
the Maximum Permissible Bank Finance.
• This statement which calculates the borrower working capital GAP
and permissible finance by following method.
• The method of lending will allow the MPBF 75% of the net working
capital GAP which is Current assets less current liabilities.
• So this is very important statement which decide the borrower`s
borrowing limit from the bank.
 6. FUND FLOW STATEMENT

• Fund flow statement analysis for the current & projected period is one
of the statements in CMA data.
• This statement analysis borrower fund position with reference to the
working capital analysis given in MPBF calculations & projected
balance sheets.
• Basic objective of this statement capture the funds movement of the
borrower for the given period.
 7. RATIO ANALYSIS

• This is the last statement which gives the key ratios to the banker
based on the CMA data prepared and submitted to the bank for
finance.
• Basic key ratios are Gross profit ratio, net profit ratio, current
ratio, DP limit, MPBF, Net worth, ratio of net worth with
Liabilities, quick ratio, stock turnover, asset turnover, fixed asset
turnover, current asset turnover, working capital turnover, Debt
Equity ratio etc
  DOCUMENTS/INFORMATION
REQUIRED TO PREPARE CMA
• Past 2 years Audited Financials
• Provisional Financial for the current year; in the absence of
provisional financials, details of the top line shall be essential
• Latest Sanction letter (in case of renewal)
• Term Loan Repayment Schedule, if any
• Details of proposed enhancement (if any) along with the terms and
conditions