Which of the following metrics is affected when a business makes prepayment of rent?
A) Profitability
B) Leverage
C) Liquidity
D) Contingency

Question

Which of the following metrics is affected when a business makes prepayment of rent? ​
A) ​Profitability
B) ​Leverage
C) ​Liquidity
D) ​Contingency

Quizplus · Accepted Answer

If a business makes prepayment of rent, it would affect its liquidity metric. Prepayment of rent decreases the amount of cash available for other expenditures, thus affecting the company's ability to meet its short-term obligations.

Which of the Following Metrics Is Affected When a Business