Westmoreland Company
Following Are Selected Data from Westmoreland Company's Financial

Multiple Choice

Westmoreland Company
Following are selected data from Westmoreland Company's financial statements.
​
$\begin{array}{lrr}&2018&2017\\\text { Current liabilities } & \$ 230,000 & \$ 160,000 \\\text { Long-term debt } & 120,000 & 320,000 \\\text { Stockhol ders' equity } & 420,000 & 540,000 \\\text { Cash payments for additions to plant and equipment } & 45,000 & 32,000 \\\text { Net cash flow from operating activities } & 80,000 & 51,000 \\\text { Interest and principal payments } & 12,000 & 8,000 \\\text { Net operating cash flows before interest and taxes } & 68,000 & 43,000 \\\text { Net income } & 90,000 & 72,000 \\\text { Interest expense } & 8,500 & 11,500 \\\text { Income taxes } & 16,000 & 14,500 \\\text { Dividends paid } & 15,000 & 30,000\end{array}$ ​
-Refer to the Westmoreland Company data.
The company's debt service coverage ratio for 2018 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 significant 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.