Dynamics of Financial System: A System Dynamics Approach

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  • Girish K Nair Stenden University, QATAR
  • Lewlyn Lester Raj Rodrigues Manipal University


There are several ratios which define the financial health of an organization but the importance of Net cash flow, Gross income, Net income, Pending bills, Receivable bills, Debt, and Book value can never be undermined as they give the exact picture of the financial condition. While there are several approaches to study the dynamics of these variables, system dynamics based modelling and simulation is one of the modern techniques. The paper explores this method to simulate the before mentioned parameters during production capacity expansion in an electronic industry. Debt and Book value have shown a non-linear pattern of variation which is discussed. The model can be used by the financial experts as a decision support tool in arriving at conclusions in connection to the expansion plans of the organization. Keywords: Financial System; Taxable Income; Net Income JEL Classifications: M20; M21; M29


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Author Biographies

Girish K Nair, Stenden University, QATAR

Lecturer, Department of Finance and Economics, International Hospitality, Tourism and Business Management,Stenden University, QATAR

Lewlyn Lester Raj Rodrigues, Manipal University

Prof. & Head, Department of Humanities & Social Sciences, Manipal Institute of Technology, Manipal, India 576104




How to Cite

Nair, G. K., & Rodrigues, L. L. R. (2012). Dynamics of Financial System: A System Dynamics Approach. International Journal of Economics and Financial Issues, 3(1), 14–26. Retrieved from https://www.econjournals.com/index.php/ijefi/article/view/310