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QUESTION 10 Information from Nue Company's financial statements is provided below. 2013 2012 Current liabilities $250 000 $170 000 Non-current liabilities 130 000 340 000

QUESTION 10

Information from Nue Company's financial statements is provided below.

2013

2012

Current liabilities

$250 000

$170 000

Non-current liabilities

130 000

340 000

Shareholders' equity

440 000

560 000

Net cash flows from operating activities

70 000

61 000

Interest and principal payments

14 000

9 000

Net sales

475 000

450 000

Total comprehensive income

90 000

72 000

Interest expense

7 500

13 500

Income tax

18 000

12 500

Dividends paid to ordinary shareholders

16 000

28 000

The times interest earned ratio:

decreased, which indicates that the company has less cash to pay interest on its debt

increased, meaning the company's creditors will be pleased

indicates a decline in the company's ability to pay its liabilities when they come due

indicates that the company cannot meet its current year interest payments out of current year earnings

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