Every time you walk into a bank for a credit facility, three numbers determine the outcome more than any other factor.
Formula: DSCR = EBITDA ÷ (Annual Interest + Annual Principal Repayment)
What the bank wants: Above 1.25. This means for every ₹1 you owe in debt service, you earn ₹1.25 in operating profit.
If your DSCR is 1.4, tell the bank: "Our operations generate 40% more cash than we need to service our current debt." That sentence moves the RM.
Formula: TOL/TNW = Total Liabilities ÷ (Share Capital + Reserves)
What the bank wants: Below 3x. Above 4x is a serious concern.
Formula: Current Assets ÷ Current Liabilities
What the bank wants: Above 1.2. Below 1 means you have more due immediately than you can pay — this signals working capital stress.