The question is, "How does one Test a Coil to help determine if it is good or bad ?"
Personally, I have always used the following procedure.
Typically, one might see a "Coil Test Procedure" something like the following (from the 1957 Ford and T-Bird Shop Manual) :
This notes what you are testing, and why, as well as testing at normal operating temperature, but it doesn't tell you how to do it. It really is a rather simple procedure.
First, you need a multi-meter (Volt/Ohmmeter) capable of reading 200 ohms, and 200,000 (200K) ohms. Also a heat gun (or hair dryer if you don't have a heat gun), and a way to measure the temperature of the coil (I use an infrared thermometer). An option to the heat gun and thermometer, is to start the car (after the "cold" testing), and bring the engine up to normal operating temperature. Then disconnect all wires from the coil, including the Distributor to Coil wire. Then do the test on the hot coil.
The test procedures are as follows :
1) For Coil Primary Resistance, set the meter to the 200 ohm scale.
2) Connect the Red lead to the "Bat" (+) terminal of the Coil, and the Black lead to the "Dist" (-) terminal.
3) Record your reading (for 1957-73 Ford Cars, including Mustangs, this should ideally be 1.40 to 1.54 ohms.
4) For the Coil Secondary Resistance,
set the meter to the 200K scale, leave the Black lead of the meter connected to the "Dist" terminal, and move the Red lead to the Coil tower (where the wire from the Distributor was), making sure that the lead makes contact with the connection at the bottom of the tower. This reading should be somewhere between 8000 and 8800 ohms for 1957-66 Ford Cars, including Mustangs, and between 7600 and 8800 ohms for 1967-73 Ford Cars, including Mustangs. Record your results.
5) Repeat the same tests on the Coil at operating temperature(approximately 175° F) and observe if it is a steady reading. Record your results again.
6) Compare the results. If the results of the "hot Coil" vary significantly or are much lower, then the coil is breaking down when hot, and should be replaced. If all results are significantly higher or lower, then it should also probably be replaced. The values shown in books are typically for "new" coils, and some differences are to be expected with old or well used coils. I have seen a used Coil that functions as intended, with a Secondary Resistance as high as 30,000 ohms.
You can now be labeled a "Doctor of Coil Resistology".
Hope this has helped.
Bob