What is 'liquidity potential' in SAP FS-LRM - Liquidity and Risk Management?

liquidity potential - Overview

• Component: FS-LRM

• Component Name: Liquidity and Risk Management

• Description: All assets and inventory that can be converted quickly into cash.

liquidity potential - Details

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  Key Concepts: 
  Liquidity potential is a term used in SAP's FS-LRM Liquidity and Risk Management component. It is a measure of the amount of liquidity that a company has available to meet its short-term obligations. It is calculated by taking into account the company's current assets, liabilities, and cash flow. 
  
  How to use it: 
  The liquidity potential of a company can be used to assess its financial health and determine whether it has enough liquidity to meet its short-term obligations. It can also be used to compare the liquidity potential of different companies in order to make informed decisions about investments. 
  
  Tips & Tricks: 
  When calculating liquidity potential, it is important to consider both current assets and liabilities, as well as cash flow. This will give you a more accurate picture of the company's financial health. Additionally, it is important to consider the time frame for which the liquidity potential is being calculated, as this will affect the results. 
  
  Related Information: 
  For more information on liquidity potential and how it can be used in SAP's FS-LRM Liquidity and Risk Management component, please refer to SAP's official documentation. Additionally, there are many online resources available that provide further information on this topic.