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Corporate Banking, RM and Credit Analysis

Formula Sheet

Average Quarterly Total of the end of day balances for the quarter/Number of days in the
Balance (AQB) quarter
Purchase of finished goods + Raw material consumed + Power costs +
Cost of Production Depreciation & Amortization + Any other direct costs (-/+) Change in work in
progress
Depreciation & Amortization + Any other direct costs (-/+) Change in work in
Cost of Sales
progress (-/+) Change in finished goods
Maximum Permissible
Minimum of {(WCG-SNWC), (WCG-PNWC)}
Bank Finance
Gross sales (Manufacturing) – Excise duty + Net sales (Trading) + Other
Net Sales
operating income
Net Working Capital Total Current Assets – Total Current Liabilities
PAT PBT – Current tax – Deferred tax
PBITDA Total operating income – Total operating expense
PBIT – Interest expenses + Other income (including interest income) + Total
PBT
exceptional income – Total exceptional expenses
RAROC Expected return on investment (Net Income)/ Economic Capital
Working Capital Gap Total Current Assets – Other Current Liabilities

Ratios
Credit Availment (In G Creditors for purchases*12 / (Purchase of other finished goods + Raw
Months) material
Current Ratio Total current assets / total current liabilities
Debt Service Coverage [PAT + Interest Paid + Depreciation + Deferred tax provision] / (Interest Paid
Ratio + CPLTDpy) py- Previous year, CPLTD- Current portion of long-term debt
FG Holding (In Months) Finished Goods * 12/ Cost of Goods Sold

Fixed Assets Cover Ratio Total Fixed Assets / Total Debt

Fixed Assets Turnover Gross Sales / Gross Fixed Assets (GFA)

Interest Coverage Ratio (PAT+ Interest Expense+ Depreciation) / Interest Expense

Net Margin or PAT
Profit After Tax (PAT) / Total Income
Margin
PBDIT Margin PBDIT / Net Sales
PBIT Margin PBIT/ Net Sales
Raw Material Holding (In {(Closing balance Raw material + Closing balance Consumable spares) *12} /
Months) Raw material consumed
Receivables Holding (In
Total Debtors * 12 / Total Operating Income
Months)
PBIT / [Average of (total debt + tangible net worth + long term liability to be
ROCE
taken as quasi equity) for the previous year and current year]
ROE PAT / Capital and Reserves
Tangible Net Worth (Capital and Reserves + Deferred Tax Liability) – (Deferred Tax Asset+
(TNW) Intangible Assets + Revaluation Reserve)
WIP Holding (In Months) Stock in Process * 12/ Cost of Goods Sold

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