How to Prepare CMA Data for a Bank Loan: The 7 Statements, Year Columns, Assumptions and a Worked MPBF (2026)
- CMA data is a set of seven linked statements — limits, operating statement, balance-sheet analysis, current assets and liabilities, MPBF, fund flow and ratios — across two audited, one estimated and two or more projected years.
- Projections are built from assumptions (growth, margins, inventory, debtor and creditor days), not typed in; the bank reads the assumptions before the numbers.
- Before submitting, check the ratios the bank will check: current ratio ≥ 1.33, TOL/TNW ≤ 3–4, DSCR ≥ 1.5 for term loans.
Credit Monitoring Arrangement (CMA) data is the standard financial submission Indian banks require for working-capital limits and term loans above small-ticket sizes. It is not a form you fill; it is a model in which past audited figures, the current year's estimate and future projections sit in one set of seven statements whose totals must reconcile. Credit officers can tell within minutes whether the preparer understood the linkages. This guide gives the sequence to build it, the assumptions that drive it, the reconciliations that must hold, and a worked example that ends with the bank's own MPBF and ratio checks.
The seven statements
| # | Statement | What it contains |
|---|---|---|
| 1 | Particulars of existing and proposed limits | Each facility, sanctioned amount, outstanding, security, proposed limit |
| 2 | Operating statement | Sales (domestic/export), cost of sales built up from materials, power, wages, other manufacturing costs, depreciation; selling and admin expenses; interest; PBT, tax, PAT; dividends; retained profit |
| 3 | Analysis of balance sheet | Liabilities: bank borrowings, other current liabilities, term liabilities, net worth; Assets: current assets, fixed assets, non-current assets, intangibles; tangible net worth and net working capital |
| 4 | Comparative statement of current assets and current liabilities | Inventory by stage, receivables by age, other current assets; creditors, advances, statutory dues, instalments due within a year |
| 5 | Computation of MPBF | Total current assets, other current liabilities, working-capital gap, minimum margin (25% of TCA), actual NWC, MPBF |
| 6 | Fund flow statement | Sources (PAT, depreciation, fresh capital, term loans) and uses (capex, repayments, dividends, increase in NWC) |
| 7 | Ratio analysis | Current ratio, TOL/TNW, debt-equity, DSCR, interest coverage, holding periods, margins, return on capital |
Year columns
Banks typically want five to seven columns: two audited years (from the audited financials, reclassified into the CMA format), the current year estimated (actuals to date plus a forecast for the balance), and two to five projected years covering the loan tenure. The audited columns must tie to the audited balance sheet to the rupee; the estimated column must tie to the latest GST returns and bank statements the bank will also see.
Step-by-step build
- Reclassify the audited financials into the CMA heads. Split creditors into trade creditors and others, debtors by age (over six months is often excluded from drawing power), loans into current and term portions, and move unsecured loans from promoters into quasi-equity only if subordinated in writing.
- Write the assumptions sheet: sales growth by year with the reason (capacity, orders, new outlets), gross margin, fixed-cost inflation, inventory days by stage, debtor days, creditor days, capex and its funding, term-loan repayment schedule, tax rate, dividend policy.
- Build the operating statement from the assumptions. Do not let profit be a plug — cost of sales should come from material consumption at the assumed margin, and interest from the projected borrowings.
- Derive current assets and liabilities from the holding periods: inventory = cost of sales × inventory days ÷ 365; receivables = sales × debtor days ÷ 365; creditors = purchases × creditor days ÷ 365.
- Balance the balance sheet with bank borrowing as the balancing item within the proposed limit; if the required borrowing exceeds the limit, the plan needs more equity, longer creditor days or lower growth.
- Compute MPBF under the second method and compare with the proposed limit.
- Run the ratios and read them as the credit officer will; fix the plan, not the ratio.
- Reconcile: fund flow sources equal uses; the change in NWC in statement 6 equals the change in statement 5; retained profit in statement 2 equals the change in reserves in statement 3.
Worked example: a ₹6 crore trader seeking a ₹1 crore CC limit
Projected year 1 (₹ lakh): sales 600; cost of sales 528 (gross margin 12%); other expenses 36; interest 12; PBT 24; tax 6; PAT 18. Holding periods: inventory 45 days, debtors 40 days, creditors 30 days.
- Inventory: 528 × 45 ÷ 365 = 65
- Receivables: 600 × 40 ÷ 365 = 66
- Other current assets (advances, cash): 9 → total current assets 140
- Creditors: purchases ≈ 540 × 30 ÷ 365 = 44; other current liabilities 6 → OCL 50
- Working-capital gap: 140 − 50 = 90
- Minimum margin 25% of TCA = 35; actual NWC (promoter funds in the business) = 40
- MPBF = 90 − higher of (35, 40) = ₹50 lakh
The ₹1 crore ask is not supported: the bank will offer ₹50 lakh, or ask the promoter to bring in more long-term funds. The seller now has choices before the meeting — raise NWC, or show 60-day debtors if that is the real terms of trade — rather than being cut in the sanction letter. Current ratio = 140 ÷ (50 + 50) = 1.40, which clears the 1.33 benchmark; TOL/TNW must then be checked on the balance sheet.
What the credit officer reads first
- The assumptions sheet — if growth is 40% with no capacity or order-book support, the file is sent back.
- Whether the estimated year ties to GSTR-3B turnover and bank credits.
- Holding periods versus industry norms and versus the company's own past.
- Promoter contribution and whether unsecured loans are subordinated.
- Ratios in year 1 of projection, not year 5.
A model built on assumptions produces all seven statements and the ratio sheet automatically and keeps them reconciled when a number changes. DPR Studio does exactly that — you enter the audited figures and the assumptions, and it outputs bank-format CMA with MPBF and ratio checks.
Common mistakes
- Typing projections directly instead of deriving them; totals stop reconciling the first time a number changes.
- Debtors over six months counted at full value; banks exclude them from drawing power.
- Ignoring the current portion of term loans in current liabilities, which overstates the current ratio.
- Growth without capex — doubling sales on the same fixed assets invites a query on capacity.
- Estimated year that contradicts GST returns already filed for the same months.
Do it yourself in minutes — free to try, no login needed.
Open DPR Studio →Frequently asked questions
What is CMA data in a bank loan?
Credit Monitoring Arrangement data is a standard set of seven linked financial statements — limits, operating statement, balance-sheet analysis, current assets and liabilities, MPBF computation, fund flow and ratios — covering past audited years, the current estimated year and projected years, used by banks to assess working-capital and term-loan proposals.
How many years does CMA data cover?
Usually two audited years, the current year estimated, and two to five projected years depending on the loan tenure. Audited columns must match the audited financial statements exactly.
What ratios do banks check in CMA data?
Current ratio (benchmark 1.33), total outside liabilities to tangible net worth (usually up to 3 or 4), debt-equity, debt service coverage ratio (1.5 or higher for term loans), interest coverage, and inventory, debtor and creditor holding periods.
Can I prepare CMA data myself?
Yes, if you build it from assumptions in a linked model and reconcile the statements. Most rejections come from unrealistic assumptions or unreconciled statements rather than from format errors.
General information for FY 2026-27, not professional advice for your specific case. Rules change — verify against the latest notification or ask a KyaTax expert.
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