Calculate the working capital finance (Bank Finance) for the year 2019-20 of M/s Ganga Enterprises Pvt. Ltd. as per Simplified Turnover Method of lending based on the following information: Balance Sheet As on 31st March

Turnover method of lending is suggested by Nayak committee. Under this method minimum 25% of the projected turnover (or 3 months sales) is the working capital requirement. The working capital limit given is 20% of projected sales and the borrower's contribution (margin) is 5% of projected turnover. Particulars Amount Sales turnover (assuming they are projected by the borrower and accepted by the banker) 80,00,000 Minimum WC required (25% of projected sales) 20,00,000 Minimum Borrower's contribution 5% of projected sales 4,00,000 Available margin (NWC) Excess of LTS over LTU 7,50,000 + Creditors 5,00,000 12,50,000 Bank finance as per Turnover method 7,50,000