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 1^stRecommendations of Tandon’s Committee, the Maximum Permissible Bank Borrowings will be:

Rs. 2,55,00,000/-

Rs. 3,30,00,000/-

Rs. 1,13,00,000/-

None of the above

1^st recommendation of Tandon Committee, the Maximum Permissible Bank Borrowings:

Current Assets

Less: Current liabilities other than bank borrowings

= Working capital Gap

Less: 25% of Working capital Gap as margin money

= Maximum Permissible Bank Borrowings

= 7,40,00,000 (-) 3,00,00,000= 4,40,00,000/- (-) 25% = 3,30,00,000/-

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