Free tool

Drawing power calculator

Drawing power is the amount your bank lets you draw against a cash credit limit, based on the stock and receivables you hold. Enter your figures and the margins from your sanction letter.

Stock value

₹

Raw material, work in progress and finished goods that the bank accepts.Receivables

₹

Only debtors within the age your bank allows.Creditors for goods

₹

Deduct creditors for goods

Margin on stock

Margin on receivables

Sanctioned limit

₹

Leave at 0 to ignore the cap.

Result

Eligible stock: ₹37,50,000
Eligible receivables: ₹18,00,000
Less creditors for goods: −₹15,00,000
Computed drawing power: ₹40,50,000

Drawing power (capped at your limit)

₹40,00,000

Illustrative only. Banks set margins, eligible assets and exclusions in the sanction letter. Use the numbers your bank gave you.

How the calculation works

Eligible stock is stock value less the bank's margin on stock.
Eligible receivables are receivables within the allowed age, less the margin on receivables.
Creditors for goods are deducted if your sanction letter requires it.
Drawing power cannot exceed the sanctioned limit.

If your stock figures live in several spreadsheets, an ERP can produce them from live stock and debtor data, so the monthly statement stops being a manual exercise.