Working capital gap means:
a. Current assets less current liabilities
b. Current assets less current liabilities other than short term bank borrowing
c. Fixed assets less current assets
d. Difference of long term sources and uses
Important Questions on Loan Policy and Loan Documentation
Under Nayak Committee Recommendations, the quantum of the contribution of the borrower is _____ of the projected annual sales.
a. 5%
b. 10%
c. 20%
d. 25%
e. Need-based to give a debt-equity ratio of 2:1
Borrowers contribute margin for Working Capital limits from:
a. Capital and Reserves
b. Term loans and Debentures
c. Surplus of long term sources over long term uses
d. Current Assets
Formula for calculating drawing power in cash credit accounts is:
a. Value of security less margin
b. Balance in the account plus margin
c. Value of security plus margin
d. None of the above
Current assets of a company are Rs.800 lac and other current liabilities Rs.80 lac. If the amount of networking capital is Rs.170 lac what will be the amount of excess borrowing, as per 2nd method of lending:
a. Rs.120 lac
b. Rs.80 lac
c. Rs.50 lac
d. Rs.30 lac
