CMA report is also known as credit monitoring arrangement report which is a complete document in itself to ascertain the past and present performance of an organization in financial perspective. This is necessary for the lenders and banks to predict the financial health of a business.

For businesses and enterprises, banks and lenders are needed these type of documents from the borrower. They need this CMA report when the money requirement is between 2 crores to 5 crores. Banks have to give the list of the credit borrowers to the Reserve Bank of India. Now, let’s discuss the elements of the CMA report -

Particulars of limits -

This is the first element, which is required by the lenders to the borrower. In it, the complete list of the existing fund and non-fund based details are included in it.

Operating Statements -

This is the second element of the report, in which the past and present profit earning capacity of the borrower is anticipated. All kind of marketing, expenditure and sales data are recorded in the operating statements. The data span is of 3 to 5 years.

Balance sheet analysis -  

It is the most important analysis of the borrower’s business, in which the all the information is contained about business liabilities and assets. This gives the most proper clarification of the borrower financial position to the lender and banks.

Calculation of the maximum permissible bank finance -

This statement shows the capacity by using the calculation of MPBF. It shows the ultimate working capital requirements needed for the borrower.

Fund Flow statement -

Through this statement, the overall fund transfer in and outside of the business in a peculiar time period is determined. It indicates the current financial capacity in form of total turn over for the business of the borrower.  

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