A CMA report, also known as a Credit Monitoring Arrangement report, is a report prepared by a Chartered Accountant or Cost Accountant in India. The report is typically used by banks and financial institutions to assess the creditworthiness of borrowers, particularly in cases where the borrower is seeking a loan or other form of credit.
The CMA report provides detailed information on the borrower's financial position, including its financial statements, cash flow projections, and other relevant information. The report typically includes the following information:
Overview of the borrower's business and industry: This section provides a brief description of the borrower's business and its industry, including its history, products or services offered, and key competitors.
Financial statements: The CMA report typically includes the borrower's audited financial statements, including its balance sheet, income statement, and cash flow statement. These statements provide information on the borrower's financial performance and position over the past several years.
Projections: The report may also include cash flow projections for the borrower, which provide an estimate of the borrower's future cash flows based on its current financial position and expected business performance.
Ratios and analysis: The report may include financial ratios and other analysis to assess the borrower's financial health and creditworthiness, such as liquidity ratios, profitability ratios, and debt-to-equity ratios.
Other information: The CMA report may also include other relevant information, such as details on the borrower's management team, customer base, and suppliers.
Overall, the CMA report is an important tool for banks and financial institutions to assess the creditworthiness of borrowers and make informed lending decisions. It provides a comprehensive analysis of the borrower's financial position and helps to identify any potential risks or issues that may impact the borrower's ability to repay the loan.