CMA REPORT PREPARATION CHECKLIST
Use this checklist to assemble a complete Credit Monitoring Arrangement (CMA) data report for submission to a bank or financial institution while applying for or renewing working-capital limits and term loans. The CMA report projects the borrower's financial position and justifies the fund requirement.
1. Basic Details & Documents
- ☐ Collect borrower name, constitution (proprietorship / partnership / LLP / company) and CIN/PAN/GSTIN
- ☐ Note nature of business, banking arrangement (sole / consortium / multiple) and existing limits
- ☐ Obtain sanction letters of existing facilities and account statements
- ☐ Confirm the assessment method to be used (Turnover / MPBF Method II / Cash Budget)
2. Historical & Audited Financials (Form I & II)
- ☐ Enter audited Balance Sheet for the last 2 completed financial years
- ☐ Enter audited Profit & Loss statement for the last 2 completed financial years
- ☐ Include provisional/estimated figures for the current financial year
- ☐ Reconcile figures with signed audit report, ITR and tax audit (Form 3CD)
- ☐ Verify that opening balances tally with the prior year closing balances
3. Operating Statement (Form III)
- ☐ Tabulate net sales (domestic + export) and other operating income
- ☐ Break up cost of production, raw materials, power & fuel, wages and other manufacturing expenses
- ☐ Compute gross profit, operating profit, interest, depreciation and net profit
- ☐ State the basis for provision of tax and dividend/drawings
4. Projections & Assumptions
- ☐ Project sales, expenses and profit for the next 2–5 years
- ☐ Document the assumed growth rate for turnover with justification
- ☐ State assumptions for margins, capacity utilisation and price movement
- ☐ Ensure projections are realistic and consistent with past trends and order book
- ☐ Note assumptions for holding levels of inventory, debtors and creditors (in months/days)
5. Analysis of Working Capital & MPBF (Form IV & V)
- ☐ Compute current assets (inventory, receivables, other current assets) as per accepted norms
- ☐ Compute current liabilities (creditors, statutory dues, other than bank borrowings)
- ☐ Calculate Net Working Capital (NWC) and Working Capital Gap
- ☐ Apply Method II: 25% margin on current assets to arrive at Maximum Permissible Bank Finance (MPBF)
- ☐ Verify projected NWC and current ratio meet the minimum benchmark (1.33:1)
6. Fund Flow & Ratio Analysis (Form VI)
- ☐ Prepare the Fund Flow statement showing long-term sources and uses of funds
- ☐ Confirm long-term sources fund long-term uses (no diversion of short-term funds)
- ☐ Compute Current Ratio, Debt-Equity Ratio and TOL/TNW
- ☐ Compute DSCR, Interest Coverage and Inventory/Debtor turnover ratios
- ☐ Cross-check that all ratios are within the bank's acceptable range
7. Review & Submission
- ☐ Ensure all forms are internally linked and figures flow correctly across sheets
- ☐ Attach a covering note explaining assumptions and the fund requirement
- ☐ Get the CMA data certified/signed by the borrower and, where required, the CA
- ☐ Submit to the bank along with the loan application and supporting documents
Note: Assessment norms and margins vary by bank and industry. Always confirm the specific format, holding norms and benchmark ratios required by the lending banker before finalising the CMA report.