A sequential circuit is a circuit with memory. A Finite State
Machine (FSM) is a mathematical model of a system with
discrete inputs, discrete outputs and a finite number of internal
configurations or states. The state of a system completely
summarizes the information concerning the past inputs to the
system that is needed to determine its behavior on subsequent
inputs.
This high-level FSM model has only one input channel and only
one output channel. Variables in the specification of a design are
multiple-valued or symbolic. The symbolic variable takes on
symbolic values.