Most CMA data isn't rejected because the business is weak — it's rejected because the report contradicts itself. Here are the mistakes credit officers catch, and how to avoid them.
The most common failure: the operating statement, balance sheet and current-asset schedules don't agree with each other. Sales in Form II should drive receivables in Form IV; the balance sheet in Form III should reflect it all. When they're typed independently, they drift — and a credit officer spots the gap immediately. The fix is a properly linked workbook.
A sudden jump in sales or margins with no basis reads as a report engineered to justify a limit. Banks discount hockey-stick projections. Ground your growth in past performance, capacity and the market, and state the basis for each assumption.
Getting the margin wrong — assuming the bank funds the entire working-capital gap, or ignoring the current-ratio expectation — produces an MPBF the bank will simply recompute downward. Apply the accepted method (commonly a current ratio near 1.33:1) so your Form V matches what the bank will calculate.
Entering ratios manually to look acceptable, rather than letting them compute, is easily caught — and a weak current ratio or an odd turnover figure invites questions. Ratios should fall out of the statements; if they look wrong, the underlying numbers need fixing, not the ratio.
When a file includes both a DPR and CMA data, the two must tell one story. Different sales figures, different cost assumptions, or a working-capital cycle in the CMA that the DPR doesn't support — any of these undermines both documents. Prepare them together.
Most often because the forms don't reconcile, projections are over-optimistic without basis, the margin/MPBF assumptions are wrong, the ratios don't hold, or the figures contradict the DPR — not because the business is weak.
Forms that don't agree with each other — usually because numbers were typed independently instead of linked by formula, so sales, receivables and the balance sheet drift apart.
They should be grounded in past performance, capacity and market evidence, with a stated basis for each assumption. Unexplained jumps in sales or margins get discounted at appraisal.
Yes — when a file has both, they must tell one consistent story. Contradictory sales, costs or working-capital figures undermine both documents.
Send us your draft or your financials and we'll build (or fix) a CMA that reconciles, holds its ratios, and matches your DPR — so it doesn't come back with queries. The first assessment is free.
Related reading: What is CMA Data? · CMA Data Excel Format · CMA Data Format Explained · CMA Data for Cash Credit · How to Prepare a DPR for a Bank Loan
CA Nikhil Gupta prepares and reviews CMA data so it reconciles, holds its ratios and matches your DPR. Free assessment, no upfront fee.
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