Main Question Set 9 What is the purpose of loan covenants? Review Later To require or restrict the borrower from doing something that could affect their creditworthiness To encourage the company to be run with financially sound best practices To allow the financial institution to affect the decision making of the borrower. To make the monitoring process more efficient, as the lender can determine creditworthiness based on whether any covenants have been breached Main Question Set 11 Review Later Stampedes A/R tumaround days are higher than industry benchmarks. Despite this, why is this not considered a warning signal against lending to the company? Stampede's credit application is over-secured so small warning signals like these ratios are ultimately insignificant to the application Stampede purposely extends favorable payment terms to one of their key customers as part of its business strategy Stampede operates at a large encugh scale that we are assured that loan payments will be made, despite suboptimal performance ratios Stampede's performance ratios are not far enough from industry benchmarks to be a concern