What is working capital in SAP FI-AR - Accounts Receivable?

SAP Term: working capital

• Component: FI-AR

• Component Name: Accounts Receivable

• Description: The difference between current assets and current liabilities, also referred to as net working capital. Working capital is a measure of both a company's efficiency and its short-term financial health.

Smart SAP Assistant

• Key Concepts: 
  Working capital is a measure of a company's liquidity, operational efficiency, and short-term financial health. It is calculated by subtracting current liabilities from current assets. In the context of SAP FI-AR Accounts Receivable, working capital is the amount of money that a company has available to pay its short-term obligations. 
  
  How to use it: 
  In SAP FI-AR Accounts Receivable, working capital can be used to assess the financial health of a company. It can be used to determine whether a company has enough money to pay its short-term obligations and whether it has enough liquidity to cover its expenses. Additionally, it can be used to assess the efficiency of a company's operations and identify areas where improvements can be made. 
  
  Tips & Tricks: 
  When calculating working capital in SAP FI-AR Accounts Receivable, it is important to remember that current liabilities should be subtracted from current assets. Additionally, it is important to remember that working capital should not be confused with total assets or total liabilities. 
  
  Related Information: 
  Working capital is closely related to other financial metrics such as cash flow, return on investment, and debt-to-equity ratio. Additionally, it is important to note that working capital can be affected by changes in the market or changes in a company's operations.