Being a banker, it is very helpful to me. Thank you for sharing. KNOWLEDGE TO BAHUTO KE PASS HOTI HAI PER SHARE KOI NAHI KARTA, YE KOI AAPSE SHIKHE. Aapka explain karne ka tarika bahut achha hai sir. Thank you so much.
Sir how to calculate working cycle for new petrol pumps and justify its projected sales for new cc. 5 years projected given. How to proceed with proposal ?
Sir , here you have reduced loan limit as per working capital cycle of the business. Whether it is applicable for all loans irrespective to loan limits? Whether it is applicable to manufacturing or trading firm or both of them? Pls advise.
It is generally helpful where Working Cycle is very fast like in case of Petrol Pumps, Grocery & General Stores etc. In such cases, if we use normal Turnover Method for calculation of CC Limit, we may end up with abnormal amounts. Whereas, these businesses require funds on the basis of their Working Cycle only. We need to remember that Turnover Method assumes 90 days Working Cycle for all businesses.
If we use normal turnover method means 90 days criteria for the business where the working capital cycle is less than 90 days or very short then our assessments of working capital limit will become wrong. If we consider working capital cycle 90 days but where actual working capital cycle is only 10 days then we do over finance (more than sufficient) to the borrower which leads to chance of funds divergence . It's harmful for that financial institution.
No. Sundry Creditors are created when Stock or Inventory is purchased on Credit. For example, Stock is being purchased today but its payment shall be made on a later date. Advance to suppliers, as the name suggests, refers to the amount which has been paid to suppliers in advance while Stock will be purchased out of that amount later on. Sundry Creditors appear on the liability side as a current liability while Advance to Suppliers appears on asset side as a current asset.
Being a banker, it is very helpful to me. Thank you for sharing. KNOWLEDGE TO BAHUTO KE PASS HOTI HAI PER SHARE KOI NAHI KARTA, YE KOI AAPSE SHIKHE. Aapka explain karne ka tarika bahut achha hai sir. Thank you so much.
Thanks a lot for your encouraging feedback. Do share it with your friends and colleagues too.
Very good explanation
Thanks for the video sir❤
Very informative
Great explanation and template sir
You are doing great job sir ❤
Thankyou ji. Plz share it with your friends and colleagues also.
@@FINOLOGIST sure 👍
❤️❤️❤️❤️
Sir how to calculate working cycle for new petrol pumps and justify its projected sales for new cc. 5 years projected given. How to proceed with proposal ?
Sir , here you have reduced loan limit as per working capital cycle of the business.
Whether it is applicable for all loans irrespective to loan limits?
Whether it is applicable to manufacturing or trading firm or both of them?
Pls advise.
It is generally helpful where Working Cycle is very fast like in case of Petrol Pumps, Grocery & General Stores etc. In such cases, if we use normal Turnover Method for calculation of CC Limit, we may end up with abnormal amounts. Whereas, these businesses require funds on the basis of their Working Cycle only. We need to remember that Turnover Method assumes 90 days Working Cycle for all businesses.
@@FINOLOGIST thank you sir for quick response and guidance
If we use normal turnover method means 90 days criteria for the business where the working capital cycle is less than 90 days or very short then our assessments of working capital limit will become wrong.
If we consider working capital cycle 90 days but where actual working capital cycle is only 10 days then we do over finance (more than sufficient) to the borrower which leads to chance of funds divergence .
It's harmful for that financial institution.
Sir is it possible a firm says it has no sundry creditors and debtors but it requires aworking capital?
It is possible. It may require WC limit for Stocks & some other current assets like Advance to suppliers
@@FINOLOGIST thanks for replying sir, is advance to suppliers and sundry creditors same?
No. Sundry Creditors are created when Stock or Inventory is purchased on Credit. For example, Stock is being purchased today but its payment shall be made on a later date. Advance to suppliers, as the name suggests, refers to the amount which has been paid to suppliers in advance while Stock will be purchased out of that amount later on. Sundry Creditors appear on the liability side as a current liability while Advance to Suppliers appears on asset side as a current asset.
@@FINOLOGIST thank you so much sir .for clearing the difference ..Respect and keep doing the good work!!
Had same question 2 months back. Yes it can be funded since we are funding for stocks and inventory items.
Sir mujhe kuch questions puchne hai kya aap mujhe apna no. De skte ho...fir un questions ki video bana kr utube per dal dena pls