CMA Reports
The Foundation of Debt Financing In the credit-tight environment of 2026, a CMA report is more than a document—it is a strategic negotiation tool. At Diwakar and Associates, we bridge the gap between your business vision and the bank’s risk assessment criteria.
Why Banks Demand a CMA Report in 2026
- Lending institutions no longer rely solely on past balance sheets. They require a forward-looking Credit Monitoring Arrangement to assess:
- Repayment Capacity: Can your future cash flows comfortably service interest and principal?
- Working Capital Gap: Is the requested limit scientifically justified by your inventory and receivable cycles?
- Financial Discipline: Does your business maintain the healthy liquidity and leverage ratios required by the Tandon and Nayak Committee norms?
The 7 Pillars of a Standard CMA Report
Our reports are structured across the seven mandatory statements recognized by all Public and Private sector banks:
Form I: Existing & Proposed Limits
The "Credit Summary." We map your current fund-based (CC/OD/Term Loan) and non-fund-based (LC/BG) facilities against your new requirements, providing a clear justification for the incremental increase in credit.
Form II: Operating Statement
The "Profitability Map." This statement analyzes 2 years of Audited Actuals and projects 3–5 years of revenue. We focus on EBIDTA margins to prove your business generates enough surplus to service debt even in a fluctuating market.
Form III: Analysis of Balance Sheet
The "Solvency Check." We track the movement of your Net Worth and Capital Structure. Banks look for a steady increase in "Retained Earnings" to ensure promoters are reinvesting profits back into the business.
Form IV: Comparative Working Capital
The "Efficiency Test." We calculate your Working Capital Cycle—the number of days it takes to turn raw materials into cash. We ensure your Inventory and Debtor levels align with 2026 industry benchmarks.
Form V: Calculation of MPBF
The "Eligibility Formula." Using Method I or Method II (Tandon Committee norms), we calculate the Maximum Permissible Bank Finance. This ensures you are neither over-leveraged nor under-funded for your scale of operations.
Form VI: Fund Flow Statement
The "Integrity Check." This tracks the Source and Application of Funds. It proves to the bank that long-term funds aren't being diverted for short-term purposes, which is a major "Red Flag" during credit appraisal.
Form VII: Ratio Analysis
The "Final Scorecard." This is where the bank’s software makes the "Go/No-Go" decision. We highlight the "Big Three": Current Ratio (Liquidity), Debt-Equity (Gearing), and string>DSCR (Repayment Capacity).
Critical Ratios We Monitor for Your Success
DSCR (Debt Service Coverage Ratio)
We target a minimum of 1.25 to ensure your term loan is considered "safe."
Current ratio
Ensuring a healthy liquidity buffer, typically aiming for 1.33 as per standard banking norms.
Interest Coverage Ratio
Proving that your operational profits are sufficient to cover rising interest costs in the 2026 market.
How we provide this service at Diwakar and Associates
Data Gathering & Audit
We collect your last 2 years of audited financials and current-year provisional data, identifying any "red flags" in your current debt structure.
Liaison & Query Support
Our job doesn't end with the report. If the bank’s credit department raises queries on the MPBF calculation or fund-flow, our experts provide the necessary technical justifications.
Scientific Projection
Based on your expansion plans and industry benchmarks, we build realistic 3–5 year forecasts. We avoid the common mistake of "over-projections" which lead to bank queries.
The Impact
We manage the end-to-end process of preparing and filing tax returns for individuals, firms, and corporations, along with all statutory tax forms.
Our Commitment to You
Accuracy and speed are our priorities. At Diwakar and Associates, we provide a Bank-Ready CMA Report within 3–5 working days, ensuring your expansion plans never wait on paperwork. We commit to delivering a report that maximizes your borrowing power while maintaining a clean credit profile.
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