WC Assessment Engine

Compare Assessment Methodologies & Determine Credit Limits (2026 Directives)

Banker's Tool

About this Tool

Purpose: A precision diagnostic tool to compare limits derived via the Turnover Method (20:5 Rule) and the MPBF Method II (Current Ratio 1.33). It helps determine the optimal credit limit based on 2026 banking directives.

Read Theory

Credit Officers Risk Analysts Loan Sanctioning Authorities

Assessment Inputs

Projected Annual Turnover

Current Assets Breakdown

Raw Materials

W-I-P

Finished Goods

Receivables

Other Current Liabilities (OCL)

Current NWC (Actual)

Turnover Method (Nayak)

₹200.00

Margin Required: ₹50.00

MPBF Method II

₹217.50

Target CR: 1.33

Total CA

₹370.00

Gap: ₹310.00

Methodological Comparison

Feature	Turnover Method	MPBF Method II	Recommendation
Primary Basis	Projected Turnover	Inventory Holding Levels	MPBF Method II (Modified)
Margin Requirement	5% of Turnover	25% of Current Assets
Current Ratio	≥ 1.25	Minimum 1.33
Suitability	MSME / Small Limits	Established / Large Units

Net Working Capital (NWC) Analysis

Shortfall detected! The borrower needs to infuse ₹52.50 in long-term funds to satisfy Method II norms.