TECHNIQUES OF FINANCIAL APPRAISAL BY COMMERCIAL BANKS

Ø Form of Balance Sheet and P & L A/c

Ø Rearrangement of Balance Sheet

- Capital & Reserves (Net worth)

- Term Liabilities

- Current Liabilities

- Miscellaneous Current Liabilities

- Fixed Assets

- Current Assets

- Other Non‑Current Assets

- Intangible Assets

Ø Re‑arrangement of P & L a/c

Ø Financial Stake of the Promoters/Owners and Solvency of the Concern

- Debt Equity Ratio

- Total Indebtness Ratio

- Current Ratio

- Quick or Acid test ratio

Ø Profitability Aspects.

- Gross Profit Ratio

- Operating Profit Ratio

- Return on Investment Ratio

Ø Activity Aspects

- Inventory Turnover Ratio

- Creditors Ratio

- Debtors Ratio

Ø RBI Guidelines for Classification of Various Items of Balance Sheet

Ø Appendix 14.I : Balance Sheet, Profit and Loss Account and Schedules as at 31st March 2003