What is return on working capital in SAP EPM-SCP - Supply Chain Performance Management?

SAP Term: return on working capital

• Component: EPM-SCP

• Component Name: Supply Chain Performance Management

• Description: A measurement which assesses the magnitude of investment relative to a company’s working capital position versus the revenue generated from a supply chain. Components include accounts receivable, accounts payable, inventory, supply chain revenue, cost of goods sold and supply chain management costs.

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• Key Concepts: 
  Return on Working Capital (ROWC) is a measure of the efficiency of a company's working capital management. It is calculated by dividing the net operating profit after taxes (NOPAT) by the total working capital. ROWC is used to assess the effectiveness of a company's management of its current assets and liabilities.
  
  How to use it: 
  In SAP EPM-SCP Supply Chain Performance Management, Return on Working Capital (ROWC) can be used to measure the efficiency of a company's working capital management. It can be calculated by dividing the net operating profit after taxes (NOPAT) by the total working capital. This calculation can be used to assess the effectiveness of a company's management of its current assets and liabilities.
  
  Tips & Tricks: 
  When calculating Return on Working Capital (ROWC), it is important to ensure that all current assets and liabilities are included in the calculation. This will ensure that an accurate assessment of the company's working capital management can be made.
  
  Related Information: 
  Return on Working Capital (ROWC) is closely related to other measures of financial performance, such as return on equity (ROE) and return on assets (ROA). These measures can be used in conjunction with ROWC to gain a more comprehensive understanding of a company's financial performance.