Corporate Banking- Products and Credit Analysis

List of Formulae
Net Sales
Total Operating Income
Cost of Production
Cost of Sales
PBT

= Gross sales Excise duty

= Gross sales (Manufacturing) Excise duty + Net sales (Trading) + Other operating
income
= Purchase of finished goods + Raw material consumed + Power costs +
Depreciation & Amortization + Any other direct costs (-/+) Change in work in
progress
= Purchase of finished goods + Raw material consumed + Power costs +
Depreciation & Amortization + Any other direct costs (-/+) Change in work in
progress (-/+) Change in finished goods
= PBIT Interest expenses + Other income (including interest income) + Total
exceptional income Total exceptional expenses

PAT
Average Quarterly Balance (AQB)

= PBT Current tax Deferred tax

RAROC
PBITDA

= Expected return on investment/ Economic Capital

= Total operating income Total operating expense

Working Capital Gap

= Total Current Assets Other Current Liabilities

Net Working Capital

= Total Current Assets Total Current Liabilities

= Total of the end of the day balances for the quarter/Number of days in the quarter

Maximum Permissible Bank Finance = Minimum of {(WCG-SNWC) , (WCG-PNWC)}

RATIOS
PBDIT Margin
PBIT Margin
Net Margin or PAT Margin
Fixed Assets Turnover

= PBDIT / Net Sales

= PBIT/ Net Sales
= Profit After Tax (PAT) / Total Income
= Gross Sales / Gross Fixed Assets (GFA)

ROCE

= PBIT / [Average of (total debt + tangible net worth + long term liability to be
taken as quasi equity) for the previous year and current year]

ROE

Fixed Assets Cover Ratio

= PAT / Capital and Reserves

= (Capital and Reserves + Deferred Tax Liability ) (Deferred Tax Asset+ Intangible
Assets + Revaluation Reserve)
= Total Fixed Assets / Total Debt

Interest Coverage Ratio

= (PAT+ Interest Expense+ Depreciation) / Interest Expense

Current Ratio

= Total current assets / total current liabilities

= {(Closing balance Raw material + Closing balance Consumable spares) *12} / Raw
material consumed
= Stock in Process * 12/ Cost of Goods Sold

Tangible Net Worth (TNW)

Raw Material Holding (In Months)

WIP Holding (In Months)
FG Holding(In Months)
Receivables Holding (In Months)
Credit Availment (In Months)
Debt Service Coverage Ratio

= Finished Goods * 12/ Cost of Goods Sold

= Total Debtors * 12 / Total Operating Income
= Creditors for purchases*12 / (Purchase of other finished goods + Raw material
= [PAT + Interest Paid + Depreciation + Deferred tax provision ] / (Interest Paid +
CPLTDpy ) py- Previous year, CPLTD- Current portion of long-term debt

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