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Question no.3 The following information is furnished by ABC limited for obtaining Working capital...

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Finance

Question no.3
The following information is furnished by ABC limited for obtaining Working capital finance from Supreme Bank:
[10 Marks]
\table[[Current liabilities,Rs,Current Assets,Rs.],[Creditors for purchase,5,00,000,Raw Materials,10,00,000],[Other current liabilities,2,50,000,Stock in Progress,1,00,000],[\table[[Bank borrowings],[excluding BP/BD]],9,50,000,Finished Goods,4,50,000],[,,\table[[Receivables other than],[deferred & exports],[excluding BPBD]],3,00,000],[,,Other Current Assets,250,000],[,17,00,000,,21,00,000],[,,,]]
Deferred receivables (maturing exceeding 1 year) : Rs 100000
Bills Purchased and Bills Discounted facilities amounting to Rs.50000.
Other Current Assets include the following:
Investment in Subsidiaries and Associates
Advance paid for purchase of capital : Rs.100000
Calculate the Maxim : Rs.100000
Method II.
Bank Financing towards Working Capital under Tandon Committee
Calculate the excess borrowing in each method and how is it treated
Calculate the Current ratio in each case.
Mention the major terms and conditions or Loan Covenants of working Capital facilities
Explain the process of assessment of Letter of Credit Limit
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