Stocks and Flows

You need stocks to create flows, and you need flows to replenish stocks.

Systems thinkers see the world as a collection of stocks along with the mechanisms for regulating the levels in the stocks by manipulating flows.

For other businesses, relying on a Cash Flow Statement isn’t enough. If the business manages an inventory or extends credit to customers, a simple cash flow analysis can be misleading. In order to determine whether or not your sales are profitable, you need to be able to track which sales and expenses are related. By matching each sale with the exp

Follow a system’s Flows, and you’ll inevitably find places where resources tend to pool together. In this case, a Stock isn’t a certificate of business ownership—it’s a pool or holding tank of resources. A bank account is a good example of a Stock: it’s a pool of money waiting to be used. Inventories, queues of customers, and waiting lists are also

A stock is the foundation of any system.