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 ...
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 ...
Margin Money Against LC/BG: A Hidden Line in the Balance Sheet Vinu: Manu, I’ve seen something called “margin money against LC or BG” in a balance sheet. What does that mean? Manu: Great question, Vinu. When a company avails a Letter of Credit (LC) or Bank Guarantee (BG) from a bank, the bank usuall...
Understanding Book Debt Statements: How Banks Use Your Receivables for Loan Limits Vinu: Manu, what is this Book Debt Statement that businesses submit to banks? I came across this term in a loan document. Manu: Good question, Vinu. A Book Debt Statement is a list of amounts receivable from customers...