A stock in business and social accounting refers to the value of an asset at a balance date (or point in time), while a flow refers to the total value of transactions (sales or purchases) during an accounting period. If the flow value of an economic activity is divided by the stock value, we obtain the number of turnovers (or rotations) of a stock in an acounting period. Some accounting entries are normally always represented as a flow (e.g. profit), while others may be represented both as a stock or as a flow (e.g. capital). Accountancy (British English) or accounting (American English) is the process of maintaining, auditing, and processing financial information for business purposes. ...
However, as accounting and economic concepts have been applied outside the field of business, stocks and flows may also take on other meanings. Thus Stocks and flows are the basic building blocks of system dynamicsmodels. Jay Forrester originally coined them as "levels" (for stocks) and "rates" (for flows). System Dynamics is one approach to modeling the dynamics of complex systems such as population, ecological and economic systems, which usually interact strongly with each other. ... An abstract model (or conceptual model) is a theoretical construct that represents physical, biological or social processes, with a set of variables and a set of logical and quantitative relationships between them. ... Jay Wright Forrester (born 14 July 1918 Climax, Nebraska) is an American pioneer of computer engineering. ...
A stock (or "level variable") in this broader sense is some entity that is accumulated over time by inflows and/or depleted by outflows. Stocks can only be changed via flows. Mathematically a stock can be seen as an accumulation or integration of flows over time - with outflows subtracting from the stock. Stocks typically have a certain value at each moment of time - e.g. the number of population at a certain moment.
A flow (or "rate") changes a stock over time. Usually we can clearly distinguish inflows (adding to the stock) and outflows (subtracting from the stock). Flows typically are measured over a certain interval of time - eg. the number of births over a day or month.
In economics, the distinction is made between stocks and flows (or stock variables and flow variables).
Stocks include the total amount of equity holdings, the total amount of capital goods existing, the total value of real estate, etc., all existing at a specific time.
Flows include the total amount of consumer spending, the total amount of equities sold per day, interest payments on loans outstanding, etc., all happening over time.
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