Project Report & CMA Data Preparation

What a complete CMA data set contains

A properly prepared CMA report is not a single document but a linked set of statements, each testing a different aspect of the business's financial position, commonly organised into six parts.

Operating statement. Revenue, cost of production, gross and net profit, for the past two audited years, the current year's provisional figures, and projected years ahead — the specific span of history and projection required varies by bank and by the type of facility applied for.

Balance sheet analysis. Assets and liabilities for the same historical and projected years, showing the trend in the business's financial position over time rather than a single snapshot.

Comparative statement of current assets and liabilities, which underpins the working capital assessment — this is where the actual cash conversion cycle of the business, rather than its stated intentions, becomes visible to a lender.

Calculation of Maximum Permissible Bank Finance (MPBF). A formula-driven assessment of the maximum working capital finance a bank can extend against the business's current assets and liabilities, following methodology the Reserve Bank of India's Tandon Committee established and that banks continue to apply, in one form or another, to this day.

Fund flow statement. Where the business's funds came from and where they were deployed, year on year — profits, fresh borrowing and capital introduction on one side, asset purchases, loan repayment and working capital changes on the other. Sources must equal uses in every year; a mismatch here is one of the more common and most quickly noticed errors in a hastily prepared report.

Ratio analysis. The current ratio, debt-equity ratio, turnover ratios, and — critically for any facility involving term repayment — the debt service coverage ratio, showing whether the business's own cash generation can actually service the loan being sought, not merely whether the underlying business is profitable on paper.

Why the numbers have to reconcile, not merely look reasonable

A CMA report is only as credible as its reconciliation to the business's actual filed position. The historical figures must tie to the audited financial statements already filed with the Registrar or the income tax authorities — a bank's credit team routinely checks this, and a discrepancy between the CMA figures and the filed accounts, even a small one, raises a question that delays or derails the whole application. Projections must be realistic and defensible against the business's actual historical trend and genuine industry benchmarks, rather than optimistic figures designed simply to make the loan look more comfortably serviceable than the underlying business supports.

This is where bookkeeping maintained properly through the year pays for itself directly: a business whose monthly reconciliations are current can produce a CMA report quickly and with figures a bank will not need to query, while a business reconstructing a year's records from scratch at the point of a loan application both delays its own application and produces a report more likely to contain the kind of inconsistency a credit officer is trained to spot.

Documents required

• Audited financial statements for the preceding two years
• Provisional financial statements for the current year
• Income tax returns of the entity and, for a proprietorship or partnership, of the owners or partners
• Details of existing loan facilities and their repayment schedules
• Sanction letters for any existing credit facilities
• Details of the specific facility being sought and its purpose
• The bank's own prescribed CMA format, where the lender has one — most public sector banks publish their own Excel-based format, which should be used in preference to a generic template

Where this is most often needed

New term loans, for machinery purchase, capacity expansion, or setting up a new unit, where the project report additionally sets out the project cost, the means of finance, and how the loan will be serviced from the project's own projected cash flow.

Working capital facilities — cash credit, overdraft, bill discounting — sanctioned initially and then typically renewed annually against updated figures, meaning this is not a one-time exercise for a business carrying an ongoing facility.

Enhancement of an existing limit, where the business has grown and needs the bank to reassess and increase what it has already sanctioned, requiring the same discipline applied to updated figures.

Government scheme applications, where subsidy or credit-linked schemes for MSMEs and specific sectors require a project report and financial projections in a prescribed format as part of the application itself.

Sectors we work with in Raipur

Steel and iron manufacturing and trading, where term loans for machinery and working capital facilities against substantial inventory both recur, and where the working capital assessment needs to reflect genuinely high stock and receivables levels rather than an understated position that then fails the bank's own scrutiny.

Rice mills and agro-processing, where seasonal working capital requirements and project finance for capacity expansion are both common, and where the operating statement needs to reflect the seasonal pattern of the business honestly rather than smoothing it into an unrealistic average.

Cement, hardware and commodity trading, where working capital cycles driven by inventory holding and receivables are the central feature of the CMA assessment.

Contractors, where project-specific finance and the treatment of retention money and work in progress both need careful presentation.

Scope of our work

We prepare project reports and the full CMA data set — operating statement, balance sheet analysis, working capital assessment, MPBF calculation, fund flow statement and ratio analysis — reconciled to audited accounts and current provisional figures, in the format the specific lending bank prescribes; advise on realistic and defensible projections; and support a client through the bank's sanction process, including responding to queries the credit team raises on the figures submitted. Where a business's underlying bookkeeping is not current, we address that first, since it is the actual source of most delay and most difficulty in this exercise.