Financial Ratio & Bank CMA StudioCMA & Credit Appraisal
RBI Tandon / Nayak Norms, Solvency, DSCR, ROCE & MSME Section 43B(h) Turnover Indicators
CA WORKING PAPER: FINANCIAL RATIOS & CREDIT HEALTH
Prepared for Bank CMA Appraisal & Internal Governance Reviews
Apex Precision Engineering Pvt Ltd
PAN: AABCA9876C | FY: 2025-26
Bank: State Bank of India — SME Branch
Borrower / Assessee Profile
Profit & Loss Parameters
Balance Sheet Parameters
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Auto-populates financial ratios directly from client trial balances and exports CMA proposals to client vaults in Turia Practice.
Statutory & Compliance Disclaimer
This tool is an automated calculation, formatting, and compliance aid provided for informational purposes only. It does not constitute formal legal, taxation, or professional auditing advice. Calculations, citations, and draft documents must be independently verified by a qualified Chartered Accountant (CA) or Company Secretary (CS) against statutory provisions and applicable ICAI/ICSI guidelines before execution or certification.
Bank covenant status
1.57x
Norm: ≥ 1.33x
1.77x
Benchmark: ≥ 1.50x
0.83x
Bank Cap: ≤ 2.0x
Financial Covenants & Benchmark Schedule
12 Metrics AnalyzedCurrent Ratio
Bank / CMA Benchmark: ≥ 1.33x (RBI Tandon / Nayak Norm)
Quick / Acid-Test Ratio
Bank / CMA Benchmark: ≥ 1.00x
Debt-to-Equity Ratio
Bank / CMA Benchmark: ≤ 2.00x (Commercial Bank Cap)
Interest Coverage Ratio (ICR)
Bank / CMA Benchmark: ≥ 2.50x
Debt Service Coverage Ratio (DSCR)
Bank / CMA Benchmark: ≥ 1.50x to 1.75x (Project Finance)
Gross Profit Margin
Bank / CMA Benchmark: ≥ 15% – 25% (Industry dependent)
Net Profit Margin (PAT %)
Bank / CMA Benchmark: ≥ 5% – 10%
Return on Capital Employed (ROCE)
Bank / CMA Benchmark: ≥ 15.0%
Return on Equity (ROE)
Bank / CMA Benchmark: ≥ 12.0%
Debtor Collection Period (DSO)
Bank / CMA Benchmark: ≤ 60 to 90 Days
Inventory Holding Period (DIO)
Bank / CMA Benchmark: ≤ 60 to 90 Days
Creditor Payment Period (DPO)
Bank / CMA Benchmark: 30 to 75 Days (MSME compliance: ≤45 Days)
Credit Appraisal & Working Capital Observations
Key Balance Sheet Strengths
- Current Ratio (1.57x) indicates strong financial positioning.
- Quick / Acid-Test Ratio (1.05x) indicates strong financial positioning.
- Debt-to-Equity Ratio (0.83x) indicates strong financial positioning.
Areas Requiring Monitoring / Covenants
- Creditor Payment Period (DPO) (64Days) requires remediation against benchmark 30 to 75 Days (MSME compliance: ≤45 Days).
Statutory CA Note on Creditor Days (DPO) & MSME Section 43B(h):
Per the Income-tax Act Section 43B(h) read with Section 15 of the MSMED Act, payments to registered Micro and Small enterprises must be settled within 45 days (written agreement) or 15 days (without agreement). Creditor payment periods exceeding 45 days must be reconciled against supplier UDYAM certificates to avoid taxable disallowance.
* Note on Turnover Basis: In the absence of an itemized vendor credit purchase schedule, Cost of Goods Sold (COGS) is adopted as standard accounting proxy for annual trade purchases in computing Creditor Days (DPO).