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

question 65

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 times interest earned ratio for 2017

• A) shows an increase in the company's ability to pay its current debt when it comes due.
• B) indicates the company cannot meet its current year interest payments out of current year earnings.
• C) increased, which indicates the company's lenders will be pleased.
• D) decreased, which indicates the company has more cash to pay interest on its debt.

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Definitions:

Mean (μ)

A statistical measure, represented by the symbol μ, that calculates the average of a set of numbers by dividing the sum of these numbers by their quantity.

Normal Model

A statistical representation where data points form a bell-shaped curve around the mean, indicating a normal distribution.

Cutoff Values

Specific points on a scale that separate data into distinct categories or groups for analysis.

Car Speeds

The velocities at which cars travel, usually measured in miles per hour (mph) or kilometers per hour (kph).