1. Sanders Company’s accounts receivable turned over nine times during the year. The credit department extends terms of 2/10, n/30. Does the turnover ratio indicate any problems that management should...

1. Sanders Company’s accounts receivable turned over nine times during the year. The credit department extends terms of 2/10, n/30. Does the turnover ratio indicate any problems that management should investigate? Explain.

2. A company is in the process of negotiating with a bank for an additional loan. Why will the bank be interested in the company’s debt service coverage ratio?