CMA

Data Report
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Background and Knowledge

Credit Monitoring Arrangement, often known as CMA Data is the financial report used by lending institutions to appraise and analyse the
financial position of a company before fund lending. It is the report showing the projected performance and the past performance of a
business in financial terms.It is compiled with all the required financial ratios and metrics to help Financial Analysts and Bankers to ascertain
the financial health of a business. It is one of the most important document which a lender seeks from its potential customers in order to
process his/her loan applications. A well prepared CMA Data resolves lot of unnecessary queries and gives confidence to the lender to process
the loan application fast. Under the present rules, the Reserve Bank of India has mandated all banks to prepare CMA for lending to large
borrowers. Hence, CMA data is required for project loans, term loans and for working capital limits.

The format of CMA Data is generally fixed, and it contains preceding two years actual performance, ongoing year estimated figures and next
five years projections.
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Contents of a CMA Report

Document of current and proposed limits: This is a basic statement that details about the existing funds and non-fund based credit limits, their
usage limits and history. In addition to this, the statement also contain the proposed or applied limit of the borrower.

Profit and Loss Account: This statement shows the Current Sales, profit before & after tax, sales projections, direct & indirect expenses, and profit
position for 3 to 5 years. These requirements are case to case specific on the basis of the borrowers working capital request.

Balance Sheet: It helps in providing a comprehensive analysis of current & non-current assets, current & non-current liabilities and cash & bank
position of the borrower. This statement also specifies the net worth position of the borrower for the future projected years. It is the analysis of the
Balance sheet and gives a complete picture of the financial position of the borrower.

Analysis of Maximum Permissible Bank Finance: It is a calculation which indicates the Maximum Permissible Bank Finance. It shows the
borrower’s capacity to borrow money.

Cash Flow/ Fund Flow Statement: It is an analysis for the current & projected period and indicates the fund position of the borrower with reference
to the projected balance sheets and MPBF (Maximum Permissible Bank Finance) calculations. The main objective of this statement is to capture the
movement of the fund for the given period.

Ratio Analysis: It provides key financial ratios for the Financial Analysts and Bankers use. The basic key ratios are GP (Gross profit) ratio, Net profit
ratio, Current ratio, Quick ratio, Stock turnover ratio, Net worth, the ratio of Net worth to Liabilities, DP limit, MPBF, Asset turnover, Current asset
turnover, Working capital turnover, Fixed asset turnover, Debt-Equity ratio etc.
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Benefits and Requirements

Benefits
● Basic document required by a lender to process the loan application
● Provides a concise financial overview of historical and future data.
● Clarity on quantum of debt funds that can be raised
● Critical assessment of business in terms of ratio analysis, fund flow, working capital assessment, etc.
● This same document can be submitted to multiple lenders for loan processing.
● This is also used for Credit Rating purposes

Requirements
● Availability of last 2-3 years Historical Audited Annual Reports (if applicable)
● Broad Snapshot of Year to Date (YTD) performance
● Current Financial Year Broad Estimated Numbers
● Copy of Latest Sanction Letter of existing Lenders
● Details of present & proposed credit limits
● Brief idea on future plans of the entrepreneur for the business
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1 Detailed introductory discussion with the entrepreneur and future plans.

2 Information Checklist to be sent to entrepreneur – requesting information / documents

Entrepreneur to arrange for the information / documents as per the Checklist

3 Detailed study of each element of the business and

Draft CMA Data to be shared with the entrepreneur.

4 Entrepreneur to review the Draft CMA and share his/her observations

Each observations of entrepreneur to be mutually discussed and

5 then incorporated in the updated CMA (wherever applicable),

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