Stock And Flow
Economics, business, accounting, and related fields often distinguish between quantities that are stocks and those that are flows. These differ in their units of measurement. A stock variable is measured at one specific time, and represents a quantity existing at that point in time (say, December 31, 2004), which may have accumulated in the past. A flow variable is measured over an interval of time. Therefore a flow would be measured per unit of time (say a year). Flow is roughly analogous to rate or speed in this sense.
For example, U.S. nominal gross domestic product refers to a total number of dollars spent over a time period, such as a year. Therefore it is a flow variable, and has units of dollars/year. In contrast, the U.S. nominal capital stock is the total value, in dollars, of equipment, buildings, inventories, and other real assets in the U.S. economy, and has units of dollars. The diagram provides an intuitive illustration of how the stock of capital currently available is increased by the flow of new investment and depleted by the flow of depreciation.
Read more about Stock And Flow: Stocks and Flows in Accounting, Comparing Stocks and Flows, More General Uses, Calculus Interpretation, Example of Dynamic Stock and Flow Diagram, History
Famous quotes containing the words stock and, stock and/or flow:
“Death and life were not
Till man made up the whole,
Made lock, stock and barrel
Out of his bitter soul,”
—William Butler Yeats (1865–1939)
“In the case of our main stock of well-worn predicates, I submit that the judgment of projectibility has derived from the habitual projection, rather than the habitual projection from the judgment of projectibility. The reason why only the right predicates happen so luckily to have become well entrenched is just that the well entrenched predicates have thereby become the right ones.”
—Nelson Goodman (b. 1906)
“I candidly confess that I have ever looked on Cuba as the most interesting addition which could ever be made to our system of States. The control which, with Florida, this island would give us over the Gulf of Mexico, and the countries and isthmus bordering on it, as well as all those whose waters flow into it, would fill up the measure of our political well-being.”
—Thomas Jefferson (1743–1826)