Yes, well....
It is one of many "SPICE" (Simulation Program with Integrated Circuit Emphasis)
Each component is assigned a set of values (software package or user input)
The software runs the circuit almost as if it was a real, hard wired entity.
In most packages, you get all sorts of VOM readings, oscilliscope measurements etc.
One thing I haven't found yet, is "Live" tuning....
In other words, being able to change cap or resistor values while the simulation is running....IE: tuning an amplifier....or adjusting for optimum values...\
Usually, you have to stop the sim, change values,restart etc.
You can get free, or evaluation copies of some of these... while limited.. they are a heck of a lot of fun!!
Circuitmaker Student :
http://babbage.cs.qc.edu/courses/cs343/Circuit_Maker/circuitmaker_student.exeSwitchercad/lt spice :
http://ltspice.linear.com/software/swcadiii.exethere's just a couple.... there's more.... just google "spice simulation" or similar...
(careful... you might end up on a Spice Girls XXX page!!)
I use CircuitMaker 2000 "pro".... there are better ones for better $$...
At any rate, you'll find a better explanation than I'm giving you if you do a google, or whatever search...