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    Question

    A bank prepares a CMA report to analyse and understand

    the financial health of a prospective borrower . What does the form VI of CMA report relate to ?   
    A Balance sheet Correct Answer Incorrect Answer
    B Profit& loss account statement Correct Answer Incorrect Answer
    C Cash flow statement Correct Answer Incorrect Answer
    D Funds flow statement Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    CMA format is a report on the Past and Projected Performance of the applicant. It has an aim to understand Financial Health, It also provides information as to how the applicant has procured funds and used them in past 2 years and how it will be done in the next 3 years. Basically, CMA ensures sanctioning of funds to sound businesses only.    Form I: Particulars of Limits and information about Associate Companies   Form II: Operating Statement   Form III: Analysis of Balance Sheet – Liabilities   Form III: Analysis of Balance Sheet – Assets   Form IV: Comparative Statement of Current Assets and Current Liabilities   Form V: Maximum Permissible Bank Finance for Working Capital   Form VI: Fund Flow Statement   Form VII: Ratio Analysis  

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