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

SAP Term: simulation

• Component: FS-LRM

• Component Name: Liquidity and Risk Management

• Description: The process of cash flow modelling that allows to interactively apply scenario assumptions to liquidity risk calculations by using risk parameter curves in liquidity scenarios.

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• Key Concepts: 
  Simulation in SAP FS-LRM Liquidity and Risk Management is a process of creating a virtual environment to test the effects of different scenarios on the liquidity and risk management of an organization. It allows users to analyze the impact of various factors such as market conditions, interest rates, and other external factors on their liquidity and risk management strategies. 
  
  How to use it: 
  Simulation in SAP FS-LRM Liquidity and Risk Management can be used to create a virtual environment to test the effects of different scenarios on the liquidity and risk management of an organization. The user can define different scenarios, such as changes in market conditions, interest rates, or other external factors, and then simulate the effects of these scenarios on their liquidity and risk management strategies. The results of the simulation can then be used to make informed decisions about the organization's liquidity and risk management strategies. 
  
  Tips & Tricks: 
  When using simulation in SAP FS-LRM Liquidity and Risk Management, it is important to remember that the results of the simulation are only as accurate as the data that is used. Therefore, it is important to ensure that all data used in the simulation is accurate and up-to-date. Additionally, it is important to remember that simulations are only as good as the assumptions that are made when creating them. Therefore, it is important to ensure that all assumptions made when creating a simulation are realistic and accurate. 
  
  Related Information: 
  For more information about simulation in SAP FS-LRM Liquidity and Risk Management, please refer to the official SAP documentation at https://help.sap.com/viewer/product/FS_LRM/1H2020/en-US. Additionally, there are many online resources available that provide tutorials and tips for using simulation in SAP FS-LRM Liquidity and Risk Management.