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 ...
Where to Show Long-Term Share Investments in CMA Data: Vinu & Manu Discuss Vinu: Manu, I'm preparing CMA data for a borrower. They have made some long-term investments in shares. Where should I show this in the CMA format? Manu: Good question, Vinu. Long-term investments in shares should be shown un...
How to Decide Margin Percentage While Sanctioning Bank Credit Facilities Vinu: Manu, when we sanction credit facilities like Cash Credit or Term Loan, how do we decide what margin percentage to keep? Manu: Good question, Vinu. The margin is the portion the borrower contributes from their own funds. ...