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What is CMA Report?

  • CMA Report means Credit Monitoring Analysis report which holds the past and projected financial performance of a business, presented in a prescribed format with all required financial parameters and ratios which help banker to understand the financial stability of a business.
  • CMA Report is a systematic analysis of working capital management of the borrower and the purpose of this statement is to ensure the effective usage of long term and short-termfunds for the business purpose only.

When CMA Report is required?

  • When an enterprise proposes to take working capital facility from a bank or NBFCs, borrower is required to submit a CMA report along withother documents. CMA report contains the details about the past performance and future projections of the business. CMA report is required every year whenever renewal is due or whenever a business proposes to enhance its limits.

What are the contents of CMA Report?

  • Generally, CMA Report contains 2 years audited financial data and 3 years future projections of enterprise.
  • CMA Report contains seven forms which help banker to understand the financial stability of the enterprise. These forms are as follow:
Form Particulars Description of Form
I Particulars of existing and proposed limits, both fund and non-fund based limits, nature of facility and outstanding balance. It gives details about organisation current o/s limit and future demand.
II Operating Statement/Profit & Loss statement of the business. It shows organization behaviour of earning and expending.
III Analysis of Balance sheet It provides details about financial position of the organization, assets and liabilities, debt and owner’s fund etc.
IV Comparative statement of current assets & Current Liabilities A comparison between current assets and current liabilities standing in balance sheet.
V Fund Flow Statement This statement gives detail about source of fund and application of fund in an organization.
VI Computation of Maximum Permissible Bank Finance A computation which gives details about limit up to which a bank can maximum fund
VII Ratio Analysis A calculation of various ratio which helps banker to understand organization in better way. For e.g. Current ratio, TOL/TNW ratio, D/E ratio, Asset turnover ratio etc.

Which details are required for preparation of CMA Report?

  • Audited Financial Statements of past 2 years
  • Provisional financial statements of current year
  • Latest sanction letter (In case of renewal)
  • Details of proposed enhancement and other terms & conditions (In case of enhancement)
  • Repayment schedule and statement of accounts of existing loan accounts
  • Current year GST return (If applicable).
  • Bank statements of all existing accounts since beginning of current financial year.
  • Details of any addition in assets.