Banking · Working Capital Assessment
A service-based IT company is seeking a working capital loan. Given the characteristic nature of its business model (negligible inventory and significant receivables), which assessment method is a commercial bank most likely to rely upon primarily?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Traditional Drawing Power calculation based solely on physical stock
- 2Maximum Permissible Bank Finance (MPBF) First Method
- 3Cash Budget Method✓
- 4Turnover Method (Nayak Committee recommendations)
Correct answer
Cash Budget Method
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