Contingent Liabilities: Why They Matter in Credit Analysis Vinu: Hey Manu, I’ve been reading about contingent liabilities and I’m curious—why is it important for lenders to analyze them? Manu: That’s a good question, Vinu. Contingent liabilities are potential liabilities that may occur depending on ...
Tracing Capital Utilization: A Step-by-Step Guide for Credit Assessment Vinu: Sir, I have a basic doubt. A customer has come for an enhancement of his CC limit from ₹4.15 crores to ₹5.00 crores. His balance sheet shows capital as ₹2.00 crores. How can we know where his capital amount is and how it w...
Assessing Financial Stability: Balancing Capital, Debt, and Profitability in Business Proposals Vinu: Hey Manu, I was going through the proposal for the proprietary concern and noticed they have an unsecured loan of Rs. 51 lakhs and capital of Rs. 36 lakhs. What does that imply about their financial...
Understanding TDS Receivable: Resolving Discrepancies in Financial Statements Vinu: Hey Manu, I was looking at the provisional financials, and I noticed something strange. The Profit Before Tax (PBT) is 298 Lakhs, but the TDS receivable in the balance sheet is showing 215 Lakhs. Is that right? Manu:...
Why Supplier Advances Are Excluded in Drawing Power (DP) Calculations Vinu: Hey Manu, I have a question about determining the Drawing Power (DP) for a loan. Can we include the advance payments made to suppliers in the DP calculation? Manu: That's a great question, Vinu. Actually, advances to supplie...