How to Prepare CMA Data for a Bank Loan: A Step-by-Step Guide for Credit Analysts

Build CMA data in the order the sheets depend on each other, not the order they are numbered. Restate the audited history first (statements 2 and 3), derive holding periods from it, project statement 4, compute MPBF in statement 5, then close the loop with the fund flow in statement 6 — which must reconcile to the change in net working capital, or a sheet has been typed rather than computed.

Key facts

• Seven statements, four dependencies. Statement 4 feeds statement 5. Statement 6 must tie to the movement in net working capital between statement 3's columns. Statement 7 must be recomputed from statement 3, never typed. Statement 1 must agree with the CIC report. Everything else is presentation.
• The build order is not the numbering order. Most rework loops come from preparers who fill sheets 1 through 7 top to bottom, fixing statement 5's MPBF to the limit the borrower asked for and then writing statement 4 backwards to fit.
• Below the turnover-method thresholds you may not need a CMA pack at all. RBI's method sets working capital "at 25% of the projected turnover to be shared between the borrower and the bank, viz. borrower contributing 5% of the turnover as Net Working Capital (NWC) and bank providing finance at a minimum of 20% of the turnover", for limits up to ₹1 crore generally and ₹5 crore for micro and small enterprises (RBI, Master Circular — Management of Advances (UCBs), RBI/2023-24/51, 25 July 2023, paras 2.1–2.3). This circular is addressed to urban co-operative banks; confirm the specific lender's own threshold.
• The clock is short at the small end. RBI directs that the "Timeline for credit decisions for loans up to ₹25 lakh to units in the MSE borrowers shall not be more than 14 working days" (RBI, Master Direction — Lending to the MSME Sector, RBI/FIDD/2017-2018/56, updated 9 February 2026). A pack returned twice for arithmetic burns most of that window.
• YuSight drafts the memo end to end in about 30 minutes, spreading the source financials and computing the ratios first, so the analyst's time goes into testing the projection rather than rekeying the history.

What do you need in hand before you open the template?

Do not start with the template. Start with the document set, because half of the rework in a CMA pack is caused by building on a figure that later changes.

Two practical rules before the first cell:

Fix the units and the day-count once. Decide crores or lakhs, and 365 or 360 days, and apply it to every sheet. Mixed units across sheets is the single most common cosmetic defect, and it makes a reviewer distrust the arithmetic they cannot see.

Fix the column structure once. Two audited years, one provisional or estimated current year, one or two projected years — with identical headers on all seven sheets. If statement 2 has five columns and statement 4 has three, no cross-sheet check is possible.

The template mechanics — which cell holds what, and the formulas behind each sheet — are covered in CMA data format in Excel. What follows is the sequence and the judgement.

Step by step: the build order that survives review

Throughout, the illustration is Suryakiran Engineering Pvt Ltd, Pune — precision machined auto components, medium enterprise. Assessment year FY2027. Existing cash credit ₹8.20 crore; enhancement sought to ₹10.40 crore. All figures are constructed to show the arithmetic.

Step 1 — Restate the audited history into the bank's classification (statements 2 and 3)

Not a copy-paste from the audited financials. The bank's classification differs from Schedule III in ways that change ratios:

• Loans and advances to group companies move out of current assets, whatever the auditor called them.
• Security deposits with electricity boards and landlords move to non-current.
• Deferred tax assets and preliminary expenses come out of net worth.
• Unsecured loans from promoters sit in term liabilities, not current liabilities, and get their own line — they are the number that will be argued over later.
• Short-term bank borrowing is separated from other current liabilities and kept separate. It is the answer to the assessment, not an input to it.

Statement 2, restated:

Step 2 — Derive the holding periods from the audited columns before you project anything

This is the step preparers skip and analysts always perform. The FY2026 actuals, computed rather than asserted:

• Raw material: ₹3.49 cr ÷ ₹27.70 cr × 365 = 46.0 days
• Work in progress: ₹1.30 cr ÷ ₹37.80 cr × 365 = 12.6 days
• Finished goods: ₹2.20 cr ÷ ₹38.90 cr × 365 = 20.6 days
• Receivables: ₹8.30 cr ÷ ₹45.50 cr × 365 = 66.6 days
• Creditors: ₹3.12 cr ÷ purchases ₹28.04 cr × 365 = 40.6 days

Those five numbers are the honest starting point for the projection. Every departure from them needs a stated cause, and "improved efficiency" is not a cause.

Step 3 — Project statement 4 from those holding periods

Projected FY2027 current assets:

Projected other current liabilities, excluding bank borrowing:

Purchases are not a given — derive them. Purchases = RM consumed + closing RM stock − opening RM stock = 34.00 + 4.56 − 3.49 = ₹35.07 crore. A pack that uses RM consumption as the creditor base overstates creditor days and understates the gap.

Step 4 — Compute MPBF (statement 5)

Working capital gap = TCA − OCL = 20.00 − 5.00 = ₹15.00 crore

Under Method II:

• Minimum margin = 25% of TCA = 0.25 × 20.00 = ₹5.00 crore
• Test (a) = TCA − 25% of TCA − OCL = 20.00 − 5.00 − 5.00 = ₹10.00 crore
• Test (b) = working capital gap − projected NWC = 15.00 − 4.60 = ₹10.40 crore
• MPBF = lower of (a) and (b) = ₹10.00 crore

Resulting current ratio = 20.00 ÷ (5.00 + 10.00) = 1.33 : 1

The borrower asked for ₹10.40 crore. The assessment supports ₹10.00 crore. The ₹0.40 crore difference is the borrower's NWC shortfall: Method II requires NWC of ₹5.00 crore, the projection carries ₹4.60 crore. The standard condition is promoter infusion of ₹0.40 crore as unsecured subordinated loan with a non-withdrawal undertaking. Method I on the same figures produces a materially different answer, and the algebra behind the gap is worked through in MPBF calculation explained.

Step 5 — Build the fund flow (statement 6) and prove the loop closes

Long-term surplus available to fund current assets = 5.35 − 4.45 = ₹0.90 crore

Net working capital, FY2026 actual = TCA 16.30 − CL 12.60 = ₹3.70 crore

Projected NWC = 3.70 + 0.90 = ₹4.60 crore

That ₹4.60 crore is exactly the NWC used in statement 5's test (b). If those two numbers do not match, stop and find the error before doing anything else. In a spreadsheet built by hand this is the check that fails most often, and it fails silently, because nothing in the workbook forces the two cells to agree.

Step 6 — Recompute the ratios (statement 7) from statement 3

Never type statement 7. Point every cell at statement 3 and statement 2.

• Current ratio = 20.00 ÷ 15.00 = 1.33 : 1
• Tangible net worth = capital 2.50 + reserves 8.90 − intangibles 0.30 = ₹11.10 crore
• Total outside liabilities = term loan 5.40 + cash credit 10.00 + OCL 5.00 + unsecured promoter loans 1.90 = ₹22.30 crore
• TOL/TNW = 22.30 ÷ 11.10 = 2.01
• Treating the ₹1.90 crore of promoter loans as quasi-equity: TOL 20.40 ÷ TNW 13.00 = 1.57

Report both, and say which basis you used. Whether the promoter loans count is the negotiation, not the arithmetic — the mechanics are in TOL/TNW ratio meaning.

Step 7 — Reconcile statement 1 last, against the bureau

Statement 1 is numbered first and should be completed last, once every other figure is stable. Take the facility list from the sanction letters, then place it beside the CIC commercial report and the borrower's own bank statements. Three things to look for: a facility with another lender that is not on the list; a term loan shown at sanctioned rather than outstanding value; and a facility closed on paper but still reporting on the bureau. The first of those does not get the pack returned — it gets the file escalated.

Which cross-checks must tie between sheets?

Run these six before submission. Each takes under a minute and each catches a defect that would otherwise come back as a query.

Check 4 is the one that catches a fabricated fund flow. If depreciation is ₹1.60 crore in the P&L but the balance sheet's accumulated depreciation moved by ₹1.42 crore with no asset disposal, one of the sheets is decoration. The same discipline that governs covenant testing definitions applies here: a number that appears in three places must be the same number in all three.

Which projection assumptions do banks actually challenge?

Four, in the order they get raised.

1. Sales growth against trend. Compute it rather than eyeballing it:

• FY2025 over FY2024: (39.80 − 34.20) ÷ 34.20 = 16.4%
• FY2026 over FY2025: (45.50 − 39.80) ÷ 39.80 = 14.3%
• FY2027 over FY2026: (56.00 − 45.50) ÷ 45.50 = 23.1%

A projection that runs at 1.6x the trend is not automatically wrong. It needs a name: a new customer with an order in hand, a machine commissioned in Q2, a second shift with the hiring already done. The CNC capex of ₹4.10 crore in statement 6 is at least a consistent story. If the capex line were empty, the 23.1% would be indefensible.

2. Holding periods that move in the borrower's favour. Compare the projected days to the derived actuals:

Two lines move together in the direction that widens the gap: raw material up three days, creditors down 2.6 days. Rebuild statement 4 on the actual holding periods and watch what happens:

• Raw material at 46 days: 34.00 × 46 ÷ 365 = 4.28 (was 4.56)
• Revised TCA = 4.28 + 1.52 + 2.74 + 10.43 + 0.75 = ₹19.72 crore
• Revised purchases = 34.00 + 4.28 − 3.49 = ₹34.79 crore
• Creditors at 40.6 days: 34.79 × 40.6 ÷ 365 = 3.87 (was 3.65)
• Revised OCL = 3.87 + 1.35 = ₹5.22 crore
• Revised gap = 19.72 − 5.22 = ₹14.50 crore
• Method II test (a) = 19.72 − 4.93 − 5.22 = ₹9.57 crore
• Method II test (b) = 14.50 − 4.60 = ₹9.90 crore
• Revised MPBF = ₹9.57 crore, against ₹10.00 crore as submitted

Two holding-period corrections move the limit by ₹43 lakh — and the borrower asked for ₹10.40 crore. This is why the analyst re-derives statement 4 rather than reading it.

3. Margin holding while volume jumps. Suryakiran's RM-to-sales ratio: FY2026 is 27.70 ÷ 45.50 = 60.9%; FY2027 is 34.00 ÷ 56.00 = 60.7%. Flat, which is credible for a machining unit on pass-through steel. A projection that improves gross margin by 300 basis points in the same year volume rises 23% is claiming two wins at once and gets asked to pick one.

4. Interest that does not match the facility being sought. Statement 2 shows interest of ₹1.72 crore on average borrowings of roughly ₹15.4 crore — around 11.2%. If the projection carries the old limit's interest cost while asking for a ₹2.20 crore enhancement, the profit is overstated and the DSCR with it.

What gets a CMA pack returned for rework?

Outright rejection on the pack alone is rare. Returned for rework is routine, and the defects repeat:

1. Statement 5's gap does not equal statement 4's TCA − OCL. The MPBF has been set to the limit the borrower wanted and the current assets written to fit.
2. Bank borrowing included inside OCL. It deflates the gap and the current ratio simultaneously.
3. Creditor days computed on RM consumption instead of purchases. Overstates OCL in a growing year, understates it in a shrinking one.
4. Non-current items inside TCA. Group-company advances, electricity deposits, disputed refunds older than a year, investments in associates.
5. Statement 6's surplus not reconciling to the NWC movement. The tie-out in check 2.
6. Statement 1 disagreeing with the CIC report. Escalated, not returned.
7. Depreciation inconsistent across statements 2, 3 and 6.
8. Day-count drift — 365 on statement 4, 360 on statement 7's turnover ratios.
9. Units drifting between sheets — lakhs on 2 and 3, crores on 4 and 5.
10. Provisional financials with no reconciliation to the audit when the audit lands later with different numbers.
11. Export receivables already financed under packing credit counted again.
12. A stock statement older than three months used as the sanity check, which also invalidates the drawing power computed from it under RBI's IRAC norms (RBI/2023-24/06, para 4.2.4).

Who signs off, and what happens on the lender's side?

The borrower's chartered accountant prepares and signs the pack. It is not an audited document and carries no attestation of the projected columns — a point worth stating explicitly on the covering sheet, because it prevents a later argument about what the CA certified.

The lender's work is a different job. The credit officer reconciles statement 1 to the bureau, re-derives statement 4's holding periods, recomputes statement 5, tests statement 6's tie-out, recomputes statement 7 from statement 3, and only then writes the assessment into the credit appraisal memorandum. Where that sits in the wider file is set out in the credit appraisal process in Indian banks.

Then a third number appears. The MPBF sets the limit; the monthly stock and book-debt statement sets what can actually be drawn, after margins and after netting creditors for goods — the drawing power calculation. A borrower sanctioned ₹10.00 crore may find drawing power at ₹7.90 crore in month one. Preparers who do not explain this to the client generate an angry phone call in week two.

If the pack is arriving as a locked spreadsheet or a scan, the tooling that reads it matters as much as the template — the options are compared in best CMA data software in India.

Frequently asked questions

How do you prepare CMA data step by step?

Restate the audited history first, derive the actual holding periods from it, project statement 4 on those periods with a stated reason for every change, compute MPBF in statement 5, build the fund flow in statement 6 and check it reconciles to the movement in net working capital, recompute the ratios in statement 7, and reconcile statement 1 to the bureau last.

How many years of projections does CMA need?

Usually one or two projected years for a working capital renewal, alongside two audited years and the current provisional year. Term loan proposals often ask for projections running to the end of the repayment period so the DSCR can be tabled year by year.

Who signs off on CMA data?

The borrower's chartered accountant prepares and signs it. Nobody audits it, and the projected columns carry no attestation — which is exactly why the lender re-derives the holding periods instead of accepting them.

Is CMA data mandatory for every bank loan?

No. For micro and small enterprises with working capital limits up to ₹5 crore the turnover method usually applies and a simplified application is enough. A full seven-statement pack becomes the norm above those thresholds, where the assessment method needs the detail.

What is the most common mistake in CMA preparation?

Working backwards. The preparer fixes the MPBF at the limit the borrower wants and then writes statement 4's holding periods to produce it. Recomputing TCA minus OCL and comparing it to the stated working capital gap exposes it in seconds.

Can CMA data be prepared from provisional financials?

Yes, and it usually is, because the current year's audit is rarely complete at application. Attach a reconciliation when the audited numbers land, because a material change makes the whole assessment retrospectively wrong.

How long does it take to prepare a CMA pack?

For a clean file with audited financials, schedules and a stable template, a day of work is realistic. Most of the elapsed time goes on chasing the inventory split, the creditor ageing and the sanction letters, not on the spreadsheet.

Does the bank prepare CMA data for the borrower?

No, and a bank officer who fills it in for a borrower has created a conflict of interest that internal audit will find. The bank's job is to test the pack, not to write it.

What if the projected sales look too aggressive?

Give the growth a name and evidence — an order in hand, a machine commissioned, a customer added. A projection supported by a capex line in the fund flow is arguable; one supported by an expectation of better market conditions is not.

Should unsecured promoter loans be shown as current liabilities?

No. Show them separately under term liabilities, with a note on whether a subordination and non-withdrawal undertaking is on file. Whether they count as quasi-equity changes TOL/TNW materially, and that is the lender's call, not the preparer's.

Key takeaways

• Build in dependency order, not numbering order: history, holding periods, statement 4, statement 5, statement 6, statement 7, statement 1.
• Derive the actual holding periods before projecting. On Suryakiran, two corrected periods moved the assessed limit by ₹43 lakh.
• Statement 6's long-term surplus must reconcile to the movement in net working capital. It is the check that fails most often and the one that fails silently.
• Compute purchases properly before computing creditor days. RM consumption is the wrong base.
• Recompute statement 7 from statement 3; never type a ratio.
• Reconcile statement 1 to the CIC report last, and treat a missing facility as an escalation rather than a query.
• MPBF, sanctioned limit and drawing power are three different numbers, and the borrower should be told so before month one.

The arithmetic above is not hard. What makes it expensive is that it starts inside PDFs, scans and locked workbooks, and every tie-out has to be reconstructed by hand before it can be tested. YuSight's Financial Spreading module extracts and standardises the financials, computes the liquidity, leverage and turnover ratios, traces every figure to its source document and page, and carries them into an end-to-end credit memo draft in about 30 minutes — analyst-editable throughout, so the judgement on the holding periods stays where it belongs.

Watch YuSight spread a real balance sheet.

Sources

• RBI — Master Circular: Management of Advances (UCBs), RBI/2023-24/51, 25 July 2023
• RBI — Master Direction: Lending to the Micro, Small & Medium Enterprises (MSME) Sector, RBI/FIDD/2017-2018/56, updated 9 February 2026
• RBI — Master Circular: Prudential Norms on Income Recognition, Asset Classification and Provisioning, RBI/2023-24/06
• RBI — Guidelines on Loan System for Delivery of Bank Credit, RBI/2018-19/87, 5 December 2018