2018 2017 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 cash flow from operations to capital expenditures ratio for 2018 is an indicator that Westmoreland Company
a. has net income that is more than it would have been had dividends of $30,000 been paid.
b. has decreased cash, but is offset by the increase in net income.
c. has been effectively able to use operations to finance its acquisitions of productive assets.
d. has increased profits by $13,000.