Question
A company’s total current assets are ₹18 lakh, and
its total current liabilities are ₹12 lakh. It is eligible for a working capital limit under the Tandon Committee 2nd Method. Calculate the Maximum Permissible Bank Finance (MPBF).Solution
Under 2nd method: MPBF = 75% of Current Assets – Other Current Liabilities = (75% of ₹18 lakh) – ₹12 lakh = ₹13.5 lakh – ₹12 lakh = ₹1.5 lakh
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