How to Verify Capital Infusion Before the Balance Sheet is Ready: A Banker’s Checklist Vinu: Hi Manu. We had stipulated a condition to one of our corporate borrowers to infuse additional capital. We gave them three months for compliance. Now they’ve submitted a letter saying that capital has been in...
Auditing Cash Credit AccountsHow Bank Auditors Can Detect Fund Diversion in Cash Credit Accounts Vinu: Manu sir, as a bank auditor, I’ve been hearing that there’s increasing accountability on auditors now—especially when it comes to identifying fund diversion in cash credit accounts. Can you please ...
Working Capital Gap vs. Net Working Capital: Understanding Bank Finance Under the 2nd Method of Lending Vinu: Hi Manu. I’m reviewing a working capital proposal, and I often hear about Net Working Capital and Working Capital Gap. I also know that banks sometimes ask the borrower to bring in margin ba...
Can Non-Financed Machinery Be Used as Collateral? Vinu & Manu Explain Vinu: Manu, I have a doubt. Suppose a borrower has plant and machinery in their factory, but the bank has not funded the purchase of that machinery. Can the bank still classify it as collateral security? Manu: That's a good questi...
Inventory Change Decoded: How It Impacts COGS & Profitability in Financial Statements Vinu: Manu, what does a positive or negative change in inventory mean in financial statements? Manu: In financial statements, the change in inventory is calculated as: Change in Inventory = Opening Stock − Closing ...