Question

A manufacturing unit shows Current Assets of ₹500 lakh and Current Liabilities of ₹300 lakh. Promoter has brought only ₹50 lakh as long-term funds for working capital. The bank is applying MPBF method for assessing permissible bank finance. What is the key deficiency?

A Excess inventory
B Insufficient net working capital
C High current liabilities
D Low sales turnover
E High margin
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