Westmoreland Company Following are selected data from Westmoreland Company's financial statements. 2017 2016 Current liabilities $230,000 $160,000 Long-term debt 120,000 320,000 Stockholders' equity 420,000 540,000 Cash payments for additions to plant and equipment 45,000 32,000 Net cash flow from operating activities 80,000 51,000 Interest and principal payments 12,000 8,000 Net operating cash
flows before interest and taxes 68,000 43,000 Net income 90,000 72,000 Interest expense 8,500 11,500 Income taxes 16,000 14,500 Dividends paid 15,000 30,000 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.
c
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