What Are the "stock and Flow" Variables?

What Are the "stock and Flow" Variables?

What Are the "stock and Flow" Variables?

Stock and flow variables are stocks that are measured at a certain period in time or over a longer time span, otherwise known as the flow factor, according to BusinessDictionary.com. About.com notes that a stock variable is a one-dimensional measurement, whereas a flow variable is a two-dimensional one.

About.com adds that stock variables are an immediate measurement of a stock at a specific moment in time. Stock variables are not always accurate over a long period of time, as the financial status of a company changes over time. Examples of common stock variables include cash, assets, land and accounts receivable.

About.com notes that one of the dimensional measurements of a flow variable is the time factor, and the other is the variable quantity that was calculated over a certain time frame. Flow variables are crucial measurements in auditing and accounting practices; they are normally calculated over the business quarter or calendar year. Some flow variables are calculated monthly.