(This post explains important ratios are to be examined while appraising a term loan project. The article also deals with how to compute break even point , how to calculate DSCR (Debt service Coverage ratio) for the period of repayment of the loan, how to arrive fixed asset coverage ratio and important financial indicators . The assessment of DPG/APG etc is done in the same method how term loan is assessed, as they are the substitution of the term loan.) Term loan appraisal covers the appraisal of the borrower and appraisal of the project. The characteristics of a term loan are that term loan commitments are to be of long term. The banks and financial institutions normally offer term loans repayable in 10-15 years and beyond that period in exceptional cases like housing loans. The repayment would be made out of cash generated from business activities. Appraisal of the borrower covers the honesty and integrity of the borrower, the standing of the borrower, business capac...
(This post explains the definitions of working capital , Operating cycle and various methods of working capital appraisal viz. Tandon’s first method, Tandon’s second method, Turnover method or Nayak committee norms, Cash budget method, Chore committee norms, Maximum permissible bank finance, Minimum permissible bank finance and Important things to note in assessment of working capital assessments) Definitions of (a)working capital , (b) Operating cycle : (a) Working capital means the sum of the funds invested at various current assets used in the operating cycle, by the industrial and trading establishments. (b) Operating cycle means the length of time required to convert ‘Non-Cash current assets’, ( like raw material (RM), work in process (WIP), finished goods (FG), and receivables) into cash . Methods of Working capital appraisal: B anks in India have evolved their own method of lending as they have been given ...
Many discussions are on by many persons whose life will be impacted by the banking industry. Many who do not have any knowledge about the banking operations are also jumped to give his/ her opinions. This is particularly happen in INDIA. But Graduates join Banking industry through either IBPS or Walk-in. So both pattern has their uniqueness. One makes graduate guarantee basic plus da. But other form does not guarantee any pay structure rather showcase rosy pictures like ESOP, INCENTIVE. So both are having Pros & Cons. Now put HR things aside. Come straight to Customers. Customers for PSBs are all. But Elites are thinking Private Sector Banks are giving value. But it is actually illusion. As all banks are technology driven and also provide Credit cards. So basically there is no difference. So, customers need to be trapped so that they will stick to an individual bank. It is the philosophy of every bank irrespective of bank types. But on o...
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