Banking · Credit Assessment
Based on the functions of Credit Monitoring Arrangement (CMA) data, which statement correctly identifies the primary purpose of the fund flow analysis during credit assessment?
- 1To calculate the exact amount of income tax the borrower is required to pay in the next financial year.
- 2To ensure that long-term sources are used to fund long-term assets and to maintain a healthy net working capital.✓
- 3To determine the market value of the collateral security offered by the borrower for the proposed loan.
- 4To verify the attendance records of the employees working in the manufacturing unit of the borrower.
Correct answer
To ensure that long-term sources are used to fund long-term assets and to maintain a healthy net working capital.
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