Question
A stressed MSME account is proposed for restructuring. The TEV study shows DSCR of 1.05, negative cash flows for first two years and high sensitivity to sales variation. What should be the bank’s primary credit decision?
Solution
Low DSCR + weak cash flow → promoter must strengthen viability first
More Basic Accounting Concepts Questions
- A borrower shows Net Profit of ₹20 crore for the year. However, operating cash flow is only ₹2 crore due to sharp increase in receivables and inventory. De...
- A borrower has limits of ₹50 crore from Bank A and ₹40 crore from Bank B without consortium arrangement. The borrower diverts stock financed by Bank A to B...
- What among the following is the item related to off- balance sheet exposure? A.   Deposits B.   Guarantee C.  Call Options
- The investments which by their nature are readily realizable and are intended to be held for less than a year from the date when such investment is done ar...
- A company reports Sales of ₹200 crore, EBIT of ₹30 crore, Interest of ₹10 crore and Tax of ₹6 crore. The bank wants to assess bottom‑line profitability as ...
- Income limit for rebate of income tax increased from ₹5 lakh to ____ lakh in the new regime of Budget of 2023-24.
- A project has an installed capacity of 1,00,000 units. The break‑even sales level is estimated at 55,000 units and expected sales are projected at 70,000 u...
- A unit has Total Current Assets ₹200 crore and Current Liabilities (other than bank) ₹60 crore. As per MPBF–I, minimum margin is 25% of TCA. What is the Ma...
- SEBI has divided the Non-institutional Investors (NII) category into two based on the application size for book-built IPOs. What proportion of NIIs has bee...
- Which article of the Constitution of India prohibits arbitrary collection of tax?
Relevant for Exams:
