Following Are Selected Data from Westmoreland Company's Financial Statements ​
-Refer to the Westmoreland Company Data

question 73

Multiple Choice

Following are selected data from Westmoreland Company's financial statements. $$\begin{array} { l r r } & \underline { \mathbf { 2 0 1 7 } } & \underline { \mathbf { 2 0 1 6 } } \\\text { Current liabilities } & \$ 230,000 & \$ 160,000 \\\text { Long-term debt } & 120,000 & 320,000 \\\text { Stockholders' equity } & 420,000 & 540,000 \\\text { Cash payments for additions to plant and equipment } & 45,000 & 32,000 \\\text { Net cash flow from operating activities } & 80,000 & 51,000 \\\text { Interest and principal payments } & 12,000 & 8,000 \\\text { Net operating cash flows before interest and taxes } & 68,000 & 43,000 \\\text { Net income } & 90,000 & 72,000 \\\text { Interest expense } & 8,500 & 11,500 \\\text { Income taxes } & 16,000 & 14,500 \\\text { Dividends paid } & 15,000 & 30,000\\\end{array}$$ ​
-Refer to the Westmoreland Company data. ?
The company's debt service coverage ratio for 2017 indicates that the

• A) company's ability to pay principal and interest to creditors has declined.
• B) company has more net income available to allocate to stockholders after the payment of debt.
• C) company had significantly changes in current assets and current liabilities during the period.
• D) company generates about $2 of cash from operations to cover every $1 of debt.

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Definitions:

Withdrawal

The group of symptoms that occur upon the abrupt discontinuation or decrease in intake of medications or recreational drugs.

Depressant

A class of drugs that reduce the functioning of the nervous system and lead to decreased arousal or stimulation.

Stimulant

A substance that raises levels of physiological or nervous activity in the body, often leading to increased alertness or energy.

Neurotransmitters

Neurotransmitters are chemical messengers that transmit signals across a synapse from one neuron to another, influencing mental processes and behavior.