Proposal and Simulation of Dynamic Financial Strategy Model

Veronika Svatošová

Abstract


The financial strategy and managing the finance is understood as a fundamental part of successful business. Nevertheless, the studying theory and practice shows that this part is marginalized. Therefore, this paper deals with financial strategy and its importance in current business field. The objective of this paper is to propose the dynamic financial strategy model that could enable to simplify the financial decision-making process and solve the dilemma in setting a concrete financial strategy. The basic research method to fulfil this objective is modelling in Vensim program and further simulation the possible changes. The main purpose of this model is to find theoretical and practical comprehensive insight on setting up a concrete financial strategy and impact of possible financial changes on overall financial strategy. Afterwards, the method of simulation is used, which is a process of creating a real system implementation and experiment with this model in order to achieve a better understanding of the behaviour of the system and to assess various options of its activities. The other research methods are financial analysis of selected variables and studying of documents and relevant resources for building up the dynamic financial strategy model. The main benefits of this model are based on simulation of possible financial decision-makings and changes of the selected variables and new theoretical approach to financial strategy. Finally, the various situations in model are simulated and observed their final results. The paper shows the proposed model could be used in business practice. 


Keywords


Financial strategy; Financial management; Dynamic financial strategy model; Financial analysis; Vensim program

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DOI: https://doi.org/10.24023/FutureJournal/2175-5825/2019.v11i1.346

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