What is elementary period in SAP FS-LRM - Liquidity and Risk Management?

SAP Term: elementary period

• Component: FS-LRM

• Component Name: Liquidity and Risk Management

• Description: Part of a periodic risk parameter curve, with a defined length of one month. It can be repeated n times for each curve.

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• Key Concepts: 
  Elementary period is a term used in SAP FS-LRM Liquidity and Risk Management. It is a period of time that is used to measure the liquidity of an organization. It is typically measured in days, weeks, or months. The elementary period is used to determine the liquidity of an organization by measuring the amount of time it takes for the organization to convert its assets into cash. 
  
  How to use it: 
  The elementary period can be used to measure the liquidity of an organization by calculating the amount of time it takes for the organization to convert its assets into cash. This calculation can be done by taking the total amount of assets and dividing it by the total amount of cash generated during a given period. The result will be the number of days, weeks, or months it takes for the organization to convert its assets into cash. 
  
  Tips & Tricks: 
  When calculating the elementary period, it is important to consider any potential delays that may occur when converting assets into cash. This could include delays due to market conditions or other factors. Additionally, it is important to consider any potential costs associated with converting assets into cash, such as transaction fees or taxes. 
  
  Related Information: 
  The elementary period is closely related to other terms such as liquidity ratio and current ratio. The liquidity ratio measures the ability of an organization to meet its short-term obligations while the current ratio measures the ability of an organization to meet its long-term obligations. Both ratios are calculated using the same formula as the elementary period but with different variables.