taken at 1.17:1 against benchmark of 1.33:1. this method is applicable for accounts with credit limits of more than Rs. 5 crores. CASH BUDGET METHOD : this method may be adopted in case of specific Industries/Seasonal activities such as software, construction, film, sugar, fertilizers etc. the required finance is arrived at from the projected cash flows and not from the projected values of assets and liabilities. NET OWNED FUNDS METHOD: the credit needs of NBFCs shall be assessed based on this method, rescribed by the RBI. Dangers of inadequate Working Capital 1. It stagnates growth 2. Fixed assets remain underutilized 3. operating inefficiencies creeps in 4. Difficulty in achieving targets of business for production and profit 5. Business reputation at stake 6. Situation of tight credit terms 7. Difficulty in meeting payment commitments
Letter of Credit
The customers in the course of their business, to run business transactions smoothly, have to make efforts like participation in tenders for expanding market, deposit security deposits for APOORVA GHOSH 4108024024 MBF 2008-2010
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