M/s XYZ, a Partnership Firm sanctioned a Cash Credit Limit of ₹ 25.00 lakhs by a bank on 03.04.2025 on the Margins and other conditions as per Sanction letter issued by the Bank is as follows: On Stocks (Moving) = 20% On

Calculation of Drawing Power: Particulars Amount (in Lacs) Drawing Power (in Lacs) A Total Stock 30.00 B Less: Against Creditors 2.00 C Less: Non-Moving Stock 2.00 D Moving Stock Balance (A-B-C=D) 26.00 E Margin on Moving Stock 20% 5.20 F Drawing Power against Stock (D-E=F) 20.80 G Total Books Debts 10.00 H Book Debts more than 90 days 2.00 I Book Debts 61 days to 90 days 2.00 J Book Debts Not more than 60 days 6.00 K Margin 30% (on Book Debts Not more than 60 Days) 1.80 M Drawing Power against Book Debts (On Book Debts Not more than 60 Days) (J-K=M) 4.20 N Book Debts 61 days to 90 days 2.00 O Margin 60% 1.20 P Drawing Power against Book Debts (On Book Debts 61 - 90 Days) (N-O=P) 0.80 Q Total Drawing Power (F+M+P=Q) 25.80 The Drawing Power is ₹ 25.80 lakhs. The sanctioned limit is ₹ 25.00 lakhs. Since the calculated Drawing Power (₹ 25.80 lakhs) is more than the sanctioned limit (₹ 25.00 lakhs), the drawing power is sufficient to cover the sanctioned limit. Therefore, the sanctioned limit of ₹ 25.00 lakhs is up to the mark with regard to drawing power, and the drawing power is within the capacity to support the sanctioned level.