CMA Ratio Calculator — Bank Loan Ratios & MPBF
Enter your balance sheet and P&L figures and this free calculator returns the key ratios a bank checks in a CMA (Credit Monitoring Arrangement) data report — current ratio, DSCR, ISCR, TOL/TNW and debt-equity — plus your MPBF (Maximum Permissible Bank Finance) under the Tandon Committee second method. Each ratio is flagged against the standard lending benchmark (e.g. current ratio 1.33, DSCR 1.50, TOL/TNW max 5.00). It is an indicative tool — a CA should prepare the full CMA report.
Calculate Your CMA Ratios
Enter figures in ₹ (any consistent unit — actual rupees, thousands or lakhs — as long as you are consistent).
How to Use the CMA Ratio Calculator
- Enter your balance-sheet figures — current assets, current liabilities, short-term bank borrowing, tangible net worth, total outside liabilities and total debt.
- Add the debt-servicing figures — profit after tax, depreciation, interest on term loan and the annual principal instalment.
- Click Calculate. The tool returns the current ratio, debt-equity, DSCR, ISCR and TOL/TNW, each colour-coded against the bank benchmark, plus your MPBF under the Tandon second method.
- Read the flags — green meets the benchmark, amber is borderline, red is below the acceptable floor and likely needs improvement before applying.
Keep all figures in the same unit. Pair this with the standalone DSCR calculator, current ratio calculator and working capital calculator for deeper drill-downs, or the financial ratios dashboard for a full view.
CA Tip: Banks appraise projected CMA figures, not just historicals. Model two to three forward years so the ratios trend towards the benchmark — a improving trajectory reassures the lender even if year one is tight.
What Is CMA Data?
CMA stands for Credit Monitoring Arrangement. It is a standardised financial statement format that banks use to appraise and monitor credit — particularly working capital limits and term loans. A complete CMA report covers the operating statement, balance sheet, comparative analysis, fund flow statement, the MPBF working and a ratio analysis, and is commonly prepared in the format associated with the Indian Banks' Association.
The base financials feeding a CMA are drawn from your audited accounts and income-tax filings on the income-tax portal, so the numbers must reconcile across documents.
The lender uses CMA data to judge two things: how much it can safely lend (through MPBF) and whether the business can repay (through the ratios and cash flows). Most working capital facilities and business loans above a few lakh rupees require CMA data, usually prepared by a Chartered Accountant or accounting professional following the standards and guidance issued by the ICAI.
CMA data vs project report
A project report is a wider business document — promoters, market, technical feasibility and projections — used mainly for new ventures or capex. CMA data is the structured number-focused format banks monitor credit against. Many loan files include both.
The Key CMA Ratios & Their Benchmarks
Banks following the Tandon Committee norms look for these benchmark levels in CMA appraisals:
| Ratio | What it measures | Benchmark |
|---|---|---|
| Current Ratio | Short-term liquidity | 1.33 (floor 1.17) |
| DSCR | Capacity to service debt | 1.50 avg (floor 1.40; ≥1.25 often accepted) |
| ISCR | Capacity to pay interest | 2.50 (floor 2.00) |
| TOL/TNW | Leverage vs own funds | 4.00 (max 5.00) |
| Debt-Equity | Borrowing vs equity | ~2.00 or lower (varies) |
How each is calculated
DSCR = (PAT + Depreciation + Interest) ÷ (Interest + Instalment)
ISCR = (PAT + Depreciation + Interest) ÷ Interest
TOL/TNW = Total Outside Liabilities ÷ Tangible Net Worth
Debt-Equity = Total Debt ÷ Tangible Net Worth
These benchmark norms trace back to the Tandon Committee framework adopted by the Reserve Bank of India, which most lenders still apply when appraising working capital and term-loan proposals.
Need Help with CMA Data & Bank Loan Preparation?
Patron Accounting LLP supports businesses preparing CMA data for working capital and term loans — for Pune, Mumbai, Delhi, Gurugram and pan-India clients.
MPBF — Maximum Permissible Bank Finance
MPBF is the ceiling on working capital a bank can lend under the Tandon Committee norms. The widely used second method requires the borrower to fund 25% of current assets from long-term sources, which holds the current ratio at about 1.33.
MPBF (Method II) = 75% of (Current Assets) − Current Liabilities (excl. bank borrowing)
i.e. MPBF = Working Capital Gap − 25% of Current Assets
The calculator computes MPBF as the lower-of-the-two-method-II figure based on what you enter for current assets, current liabilities and short-term bank borrowing. The actual sanction also depends on drawing power, security and the bank's internal policy.
Note: MPBF sets the maximum; it is not a guaranteed sanction. Lenders also apply drawing-power limits on stock and debtors, margins, and their own credit policy on top of the Tandon calculation.
A Worked Example
Suppose a trading business has current assets of ₹50,00,000, current liabilities of ₹35,00,000 (of which ₹15,00,000 is short-term bank borrowing), tangible net worth of ₹40,00,000, total outside liabilities of ₹90,00,000 and total debt of ₹60,00,000. Its profit after tax is ₹12,00,000, depreciation ₹4,00,000, term-loan interest ₹5,00,000 and annual principal instalment ₹8,00,000.
- Current ratio = 50,00,000 ÷ 35,00,000 = 1.43 — comfortably above the 1.33 benchmark.
- Debt-equity = 60,00,000 ÷ 40,00,000 = 1.50 — within the typical 2:1 reference.
- TOL/TNW = 90,00,000 ÷ 40,00,000 = 2.25 — well inside the 4.00 benchmark.
- DSCR = (12,00,000 + 4,00,000 + 5,00,000) ÷ (5,00,000 + 8,00,000) = 1.62 — above the 1.50 norm.
- ISCR = 21,00,000 ÷ 5,00,000 = 4.20 — above the 2.50 norm.
- MPBF (Method II) = 75% × 50,00,000 − (35,00,000 − 15,00,000) = 37,50,000 − 20,00,000 = ₹17,50,000.
This borrower presents a healthy CMA profile — every ratio clears its benchmark, so the proposal would likely be viewed favourably. The benchmark levels themselves derive from the Tandon Committee framework adopted by the RBI and remain the working standard most lenders apply.
How to Improve Your CMA Ratios
If a ratio falls short of the benchmark, these adjustments — modelled into projected CMA data — usually help:
- Inject promoter capital — raises tangible net worth, improving TOL/TNW, debt-equity and the current ratio.
- Convert short-term to long-term funds — moving working capital off short-term borrowing lifts the current ratio toward 1.33.
- Retain profits — ploughing back earnings builds net worth and reduces leverage over the projection years.
- Match repayments to cash flow — structuring instalments to your cash cycle improves DSCR.
- Clear slow current liabilities — reducing creditors and short-term dues improves liquidity ratios.
A CA preparing your CMA data can model these so the projected ratios satisfy bank norms. MSME borrowers registered on the Udyam portal may also access collateral-free credit schemes that ease the security requirement. For company borrowers, also confirm any term-loan disclosures under CARO 2020 Clause (x) where applicable.