Application of System Dynamics to Enterprise Financial Scenario Planning

Financial scenario planning plays an important role in enterprise decision-making. However, the complexity and volatility of the market environment and business system increase difficulties in the planning. The current methods used for the scenario planning depend on linear functions directly or indirectly to build forecasting models, which lead to the low accuracy of the financial planning . This paper proposes a new method for building a financial planning model based on system dynamics. Finally, this new model is applied for the financial planning of a real company. The results of simulations demonstrate the validity of the model.