Cash Credit and Overdraft

Simply stated, working capital is the difference between current assets and current liabilities. Every entity with an intention to grow requires working capital to meet the entire range of short-term fund requirements such as cash credit and overdraft that arise within their day-to-day operations. It’s a measure of short-term liquidity and addresses the overall efficiency of the organisation. 

Analysis pertaining to Working capital sufficiency addresses:
  • Credit term to offer for sales orders
  • Credit term to negotiate for purchases
  • Assistance required from the financial institutions
  • Decision pertaining to organisation’s team expansion or any capital expenditures
  • Company’s growth rate and profitability
At Cashcow consulting we specialise in ‘Analysing’ the working capital sufficiency i.e cash credit and overdraft by studying the current and previous year’s balance sheet of the institution. Understanding the capacity utilisation in the current period coupled with budgeting allows us to frame the long term forecasts on profitability and growth. This in turn forms the basis to address the above mentioned concerns of the company.

Current health check-up: Cashcow Consulting approach is to analyse the current financial health such as cash credit and overdraft of the company though various ratio’s run over a proprietary score card. The report of the same, points to the current weakness and strengths. This frames the short term strategy focused to address the same. 


The above chart is a representation of ideal source and utilization of fund.

Long term Forecast & Budgeting

To evaluate opportunities and growth plans, it is necessary to prepare forecasts and budgets in order to know about the cash credit and overdraft situation of the company. These help us understand the business better and provide a stronger basis for deciding the strategy of the company to achieve its goals. It is basis the above that the surplus long term funds available with the organisation at any point of time gets highlighted.

Analysis of the existing financial statements allows us to understand the manner in which a particular source of fund i.e cash credit and overdraft has been utilised by the organisation. Any diversion of the same needs to be corrected while completing the forecasting exercise. Cashcow consulting brings in tremendous experience in executing long term forecasts that corrects the wrongs of the past while incorporating the growth strategy that the company is going to embark on.

Raising working capital finance

Financial institution is every organisation’s partner in growth. Cashcow’s debt team, with an overall experience of over 25 years, is fully equipped to raise the working capital finance from the best of financial institutions in India or abroad. Our experience enables the best of possible structuring coupled with the best of financial terms from the respective institutions. The team has handled mandates in excess of INR 20 billion on raising working capital finance till date.

Raising Debt

The size of a project determines whether the existing reserves are sufficient or would it require raising long-term debt. Cashcow Consulting is equipped with professional team with almost 25 years of experience in debt-raising. The team has raised domestic and foreign currency term loans as well as External Commercial Borrowing (ECB) from abroad. Basis fund flow analysis and long term forecasting the required structuring of the debt is undertaken to ensure better risk management for repayment. Term debt is always accompanied by enhancement in working capital.

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