Referenced models in Simulink let you build a main model that includes other models as parts. The main model uses a Reference block to call a submodel. When you run the main model, it pauses to run the referenced model. The referenced model runs its simulation and produces output. This output is sent back to the main model. Then the main model continues running with that output. This way, you can organize big systems into smaller, manageable pieces. The execution table shows each step: starting the main model, calling the referenced model, running it, getting output, and finishing. The variable tracker shows how the states of the main and referenced models change during simulation. Understanding this flow helps you build clear and efficient Simulink models.