Mpbf Case Study
Case Study – ITA P. Ltd.
Method I 2010-11 2011-12
Total Current Assets 361.97 384.03
Less Current Liabilities 230.00 180.00
(Excluding Bank Borrowings)
:. Working Capital GAP 131.97 204.03
25% of Working Capital Gap 32.99 51.01
:. MPBF 98.98 153.02
Bank Borrowing 150.00 200.00
:. Excess Borrowing 51.02 47.02
Method II
Total Current Assets 361.97 384.03
Less 25% of CA 90.49 96.01 48. 288.02
Less Current Liabilities 230.00 180.00
:. MPBF 41.48 108.02
Bank Borrowing 150.00 200.00
:. Excess Borrowing 108.52 91.98
11. 2011-12
1) Total Current Assets 361.97 384.03
2) Total Current Liabilities 230.00 180.00 (Other than Bank Borrowings & T/L Installments due within a year)
3) Working Cap. GAP (1 minus 2) 131.97 204.03
4) Min. stipulated working capital 90.49 96.01 (25% of total Current Assets Excluding Export receivables)
5) Actual /Projected NWC (Total CA Less Total CL) (35.60) (12.89)
6) Item No. 3 Minus 4 41.48 108.02 (Method II)
7) Item No. 3 Minus 5 167.57 216.92
8) MPBF (Lower of 6 or 7) 41.48 108.02
9) Excess Borrowings representing 108.52 91.98 Shortfall in WWC (i.e. Difference Between B.B. & MPBF)
a) Since there is already excess borrowing compared to MPBF, there is no case for enhancement in Working Capital.
b) Working Capital Eligibility Method I 98.98 MPBF – gives Excess Borrowing 51.02
c) Working Capital Eligibility Method II 41.48 MPBF – gives Excess Borrowing 108.52
d) It is possible for Bank to finance Packing Credit for specific export order received by the Co. Since the total order is of US $ 11,250/-, the Co. can be granted P/C Facility of US $ 11,250/- less Profit portion.
e) It is o.k. to
Method I 2010-11 2011-12
Total Current Assets 361.97 384.03
Less Current Liabilities 230.00 180.00
(Excluding Bank Borrowings)
:. Working Capital GAP 131.97 204.03
25% of Working Capital Gap 32.99 51.01
:. MPBF 98.98 153.02
Bank Borrowing 150.00 200.00
:. Excess Borrowing 51.02 47.02
Method II
Total Current Assets 361.97 384.03
Less 25% of CA 90.49 96.01 48. 288.02
Less Current Liabilities 230.00 180.00
:. MPBF 41.48 108.02
Bank Borrowing 150.00 200.00
:. Excess Borrowing 108.52 91.98
11. 2011-12
1) Total Current Assets 361.97 384.03
2) Total Current Liabilities 230.00 180.00 (Other than Bank Borrowings & T/L Installments due within a year)
3) Working Cap. GAP (1 minus 2) 131.97 204.03
4) Min. stipulated working capital 90.49 96.01 (25% of total Current Assets Excluding Export receivables)
5) Actual /Projected NWC (Total CA Less Total CL) (35.60) (12.89)
6) Item No. 3 Minus 4 41.48 108.02 (Method II)
7) Item No. 3 Minus 5 167.57 216.92
8) MPBF (Lower of 6 or 7) 41.48 108.02
9) Excess Borrowings representing 108.52 91.98 Shortfall in WWC (i.e. Difference Between B.B. & MPBF)
a) Since there is already excess borrowing compared to MPBF, there is no case for enhancement in Working Capital.
b) Working Capital Eligibility Method I 98.98 MPBF – gives Excess Borrowing 51.02
c) Working Capital Eligibility Method II 41.48 MPBF – gives Excess Borrowing 108.52
d) It is possible for Bank to finance Packing Credit for specific export order received by the Co. Since the total order is of US $ 11,250/-, the Co. can be granted P/C Facility of US $ 11,250/- less Profit portion.
e) It is o.k. to