What is liquidity in SAP AC - Accounting - General?

SAP Term: liquidity

• Component: AC

• Component Name: Accounting - General

• Description: The ability of an individual or company to fulfill payment obligations on schedule at any time.

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• Key Concepts: 
  Liquidity is a measure of a company's ability to pay its short-term obligations. It is calculated by dividing current assets by current liabilities. In SAP Accounting - General Ledger, liquidity is used to assess the financial health of a company and to determine whether it has enough cash on hand to meet its short-term obligations.
  
  How to use it: 
  In SAP Accounting - General Ledger, liquidity can be calculated by entering the current assets and current liabilities into the system. The system will then calculate the liquidity ratio and display it on the screen. This ratio can then be used to assess the financial health of a company and to determine whether it has enough cash on hand to meet its short-term obligations.
  
  Tips & Tricks: 
  It is important to remember that liquidity is only one measure of a company's financial health. Other factors such as profitability, debt levels, and cash flow should also be taken into consideration when assessing a company's financial health. Additionally, it is important to keep in mind that liquidity ratios can vary depending on the industry and size of the company. 
  
  Related Information: 
  For more information about liquidity and other financial metrics, please refer to SAP's Financial Management Guide. This guide provides an overview of financial management concepts and best practices for using SAP Accounting - General Ledger.