Controlling the Business Growth Speed from Financial Angle of View: Using Cash Flow System Dyanmics Model

Every business wants to grow fast, but how fast can a business afford to grow? Organizational growth needs many factors´ support, such as industry development, strategy and top management. Among all the determinants, abounded cash is indispensable. Maintaining a company´s normal operation needs amount of cash, growing a company will need more. Cash is a key factor, which determines the business growth rate. This paper describes a System Dynamics model for capturing cash flow and business growth dynamics, and provides a method to control the speed of business growth. We find that system dynamics model is useful to integrate the cash flow with many factors affecting cash flow to produce a financial decision support system.