Deferred Revenue Expenditure vs. Prepaid Expense: Key Differences Explained Vinu: Manu, I’ve heard of both "deferred revenue expenditure" and "prepaid expense," but I’m not sure what the difference is. Can you help me understand? Manu: Sure, Vinu! Let me explain it to you. First, let’s talk about de...
Understanding Long-Term Solvency: Why It Matters for Lenders Vinu: Hey Manu, I've been reading about financial statements and came across the term "long-term solvency analysis." Why is this important for lenders? Manu: That's a great question, Vinu. Long-term solvency analysis is crucial for lenders...
Understanding the Importance of Techno Economic Viability (TEV) Studies in Lending Decisions Vinu: Hey Manu, I recently heard about something called a Techno Economic Viability Study. Can you explain why this is important for lenders? Manu: Sure, Vinu. A Techno Economic Viability (TEV) Study is cruc...
Stress Testing in Credit Decision-Making: A Comprehensive Guide Vinu: Hi Manu, in credit decision-making, we often talk about objective analysis by putting the borrower under stress. Can you tell me more about what kind of stress tests are typically performed? Manu: Sure, Vinu. Stress testing aims t...
Gross vs. Net: Understanding Advances and NPAs in Banking Vinu: Hi Manu, could you explain the difference between Gross Advance and Net Advance? Manu: Sure, Vinu. Gross Advance: Let's say a bank in India has sanctioned a home loan of ₹50 lakhs to Mr. Sharma. This ₹50 lakhs would be part of the bank'...