What is CMA Data? Why do we need to prepare CMA Data Report? How to fill CMA Data of a business? What are the contents of the CMA Data Report?

1. CMA Report stands for Credit Monitoring Arrangement Report, a report prepared for banks.
Businesses are growing rapidly, and banks contribute sizably to this growth. Not everyone has
ancestral money, and not every business can fund its expansion through retained earnings. A
business needs funding, either by way of equity or debt, at one point or another. To finance a
business via creating a debt, getting a loan sanctioned from a bank is a good option if the
interest rates are lower than in any other option. CMA Report is must for getting the Cash
Credit (CC)/Overdraft (OD) from the banks.
Banks prefer to give loans to those clients who have good financial standing. And before
sanctioning a loan, they want to assess the financial health of their prospective borrowers. This
is when the need for this comprehensive report arises. Banks demand this report to judge the
repayment capacity of its borrower. This report is also required to apply for an increase in the
current credit limit. The data used in this report is based majorly on the client's financial
statements.
Having discussed the need for CMA Report, let's discuss the documents required for this data's
preparation and how CMA data is prepared. Generally, it contains-
• A total of 5 years of comparative financial statements, for-
1. Last two years (Audited)
2. Current year (Provisional)
3. Next two years (Projected) along with explanations for assumptions taken

2. • Income Tax Returns of business
• Income Tax Return of owners of the business
• Cost sheet of expenses
• Latest loan sanction letter if applying for renewing or increasing the current limit
• Fund Flow Statement
• Ratio analysis report based on the financials
• Maximum Permissible Bank Finance Report
It also includes general information about the borrowers, SWOT analysis of the project, the
company's standing in the business industry, need for funds and plans for utilization of funds. If
the project is new, then a detailed report is also given.
Projected financial statements hold great significance as it indicates the future growth of the
business, and the repayment of loan depends mainly on the future income. These statements
have to be made by keeping in mind all the factors affecting business, whether financial or non-
financial.
The loan sanctioning depends significantly on the data presented in this report. So, it should be
prepared with utmost precision. There is no specific CMA Data Preparation Format for it as it
depends from case to case. Usually, banks have their own set formats.
The ratio analysis statement is the most crucial part of this CMA data preparation. Bankers
compare the ratios talked about in the report with the standards they have set. If the ratios
meet their set ideal criteria, they sanction the loan; otherwise, they reject it. This analysis also
helps them to calculate the loan limit. Ratios include Gross Profit Ratios, Net Profit Ratios,
Turnover ratios, Current and Quick ratio, Debt- equity ratio, etc.
Preparing this report is a very complicated and time-consuming task. It is highly advised to
outsource this job to experienced professionals, as in this case, one cannot afford any mistakes.
We at MAG provide the services of preparation of CMA Data Reports and are the best among
the CMA Data Consultants in Delhi. Also, a professional who is proficient in making these
reports knows about this report preparation inside out, and it increases the odds of a loan
getting approved.
Source: https://www.manishanilgupta.com/CMA-Data-Preparation