The Current Assets of a company Raw material stock ...........

Finance( Revenue Account ) Working Capital

The Current Assets of a company:

Raw material stock 4,00,00,000/-

Work-in-progress stock 40,00,000/-

Finished Goods Stock 1,80,00,000/-

Debtors 1,00,00,000/-

Other Current assets 20,00,000/-

Current Liabilities:

Creditors 2,00,00,000/-

Other current liabilities 1,00,00,000/-

Short term bank borrowings 4,00,00,000/-

Hard core current assets will be: 1,90,00,000/-

As per 3^rdRecommendations of Tandon’s Committee, the Maximum Permissible Bank Borrowings will be:

Rs. 2,55,00,000/-

Rs. 3,30,00,000/-

Rs. 1,12,50,000/-

None of the above

3^rd recommendation of Tandon’s Committee, the Maximum Permissible Bank Borrowings:

Current Assets

Less: Hard Core Current Assets

= Balance Current assets

Less: 25% of Balance Current Assets as Margin money

Less: Current liabilities other than bank borrowings

= Maximum Permissible Bank Borrowings

= 7,40,00,000 (-) 1,90,00,000= 5,50,00,000 (-) 1,37,50,000 (-) 3,00,00,000=1,12,50,000

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