Maximum Permissible Bank Finance

The Tandon Committee has suggested three methods of working out the maximum amount that a unit may expect from the bank, which is termed as 'maximum permissible bank finance (MPBF)'. MPBF under three alternatives are ascertained as follows: 1. First Method: MPBF = 75% of (Current assets – Current liabilities other than bank borrowings) The borrowing firm should provide the [...]