Lesson Plan —Unit One International and Domestic Businessdata.cteunt.org/content/files/business/principles-business... · Lesson Plan —Unit One International and Domestic Business

Lesson Plan —Unit One International and Domestic Business Course Title: Principles of Business, Marketing, and Finance Session Title: Lesson Four -Financial Planning Performance Objective:

• Upon completion of this lesson, the student will recognize important financial questions that must be answered in a business and explain essential financial statements.

Specific Objectives:

• Recognize important financial questions that must be answered in a business. • List the steps in budget preparation. • Describe three types of business budgets. • Identify several types of financial records needed by businesses. • Describe the differences between an income statement and a balance sheet. • Describe components of a business’ payroll system. • Identify information included in payroll records and paychecks. • Recognize important financial information managers use to make decisions. • Identify the steps in making financial decisions in business.

Preparation

TEKS Correlations: This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result in the elimination of any or all of the TEKS listed.

• 130.112(c)(1)(F) interpret the nature of balance sheets and income statements

• 130.112(c)(12)(A) explain the importance of providing accurate information

• 130.112(c)(12)(F) Examine investment growth by developing a personal investment plan

Interdisciplinary Correlations: English 110.42(b)(6)(A) – Vocabulary Development …expand vocabulary through wide reading, listening, and discussing 110.42(b)(6)(B) – Vocabulary Development … rely on context to determine meanings of words and phrases such as figurative language, idioms, multiple meaning words, and technical vocabulary 110.42(b)(7)(F) – Reading/comprehension

…identify main ideas and their supporting details 110.42(b)(7)(G) – Reading/comprehension …summarize texts

Copyright © Texas Education Agency, 2011. All rights reserved. 1

110.42(b)(7)(J) – Reading/comprehension …read silently with comprehension for a sustained period of time Interdisciplinary Correlations: Mathematical Models with Applications 111.36(c)(1)(A) – Knowledge and Skills …compare and analyze various methods for solving a real-life problem. 111.36(c)(1)(B) – Knowledge and Skills …use multiple approaches (algebraic, graphical, and geometric methods) to solve

problems from a variety of disciplines 111.36(c)(1)(C) – Knowledge and Skills …select a method to solve a problem, defend the method, and justify the

reasonableness of the results 111.36(c)(6)(A) – Knowledge and Skills …analyze methods of payment available in retail purchases and compare relative

advantages and disadvantages of each option. 111.36(c)(7)(A) – Knowledge and Skills …analyze types of savings options involving simple and compound interest and

compare relative advantages of these options. Accommodations for Learning Differences: It is important that lessons accommodate the needs of every learner. These lessons may be modified to accommodate your students with learning differences by referring to the files found on the Special Populations page of this website. References:

1. Accounting: Real World Applications & Connections, Glencoe McGraw-Hill 2. Intro to Business, Dlabay Burrow Klendl, South-Western Cengage Learning 3. Online Resources: globaledge.msu.edu, worldnetdaily.com/news/article

Instructional Aids:

1. “Financial Planning” PowerPoint Presentation 2. Budget for a Franchise Assignment #1 3. Budget for a Franchise Assignment #1 Rubric 4. Design an Informative Brochure Assignment #2 5. Design an Informative Brochure Assignment #2 Rubric 6. Income Statement Game Assignment #3 7. Income Statement Game Assignment #3 Rubric 8. Internet

Materials Needed: 1. Construction paper 2. Scissors and glue 3. Poster board 4. Newspapers

Equipment Needed:


1. Computers for students to complete projects 2. Projector for PPT

Learner Preparation:

1. Outline the organizational structure of the school and discuss the different positions with students. Cerate an organizational chart on the board. Students will gain a better understanding of organizational charts for businesses.

2. Southwest Airlines believes that satisfied, happy employees are essential for successful businesses. What are the advantages of a company having happy employees?

Lesson Plan

Introduction (LSI Quadrant I): 1. Ask students to list how they would spend $20 today without going over budget.

Check if any of the students choose to save some of the $20 for an emergency. Then explain why it is essential for businesses to pay close attention to projected income and expenses on the Income Statement.

2. Ask students to list all the things they paid for over the past week. If money didn’t exist, how would they pay for them? How did the students compare the costs of different products?

3. Ask students to research the current value of the dollar against the currencies of three different countries. Then ask students to chart the value of the currencies for an extended period of time. Ask students to explain how the changing values of different currencies affect the U.S. economy.

Important Terms for this Lesson:

• Revenue – all income that a business receives over a period of time • Expenses – costs of operating a business • Budget – detailed plans for the financial needs of a business • Start-up budget-plans income and expenses from the beginning of a new

business or a major business expansion until it becomes profitable • Operating budget-describes the financial plan for ongoing operations of the

business for a specific period of time • Cash budget-an estimate of the actual money received and paid out for a specific

period of time • Financial records-financial documents that are used to record and analyze the

financial performance of a business • Assets-what a company owns; anything of value owned by a business • Liabilities-what a company owes • Owner’s equity-the value of the business after liabilities are subtracted from

assets; the value of the owner’s investment in the business • Balance sheet-a report that lists a company’s assets, liabilities, and owner’s

equity • Income statement-a report of revenue, expenses, and net income or loss from

operations for a specific period


• Payroll-the financial record of employee compensation, deductions, and net pay • Payroll record-a financial document that contains information on all employees of

the company, their compensation, and benefits • Direct deposit-funds are deposited electronically and available automatically for

your use • Financial performance ratios-comparisons of a company’s financial elements that

indicate how well the business is performing • Discrepancies-differences between actual and budgeted performance


Outline

Outline (LSI Quadrant II): Instructors can use the PowerPoint presentation, slides, handouts, current events, the Internet, and note pages in conjunction with the following outline.

MI Outline Notes to Instructor

.

I. Financial Questions a Business Must Answer A. How much money is needed for start-up? B. Where to obtain financing? C. How will funds be obtained to run the

business for the months or years until it becomes profitable?

D. What will be the best sources of sales and other income?

E. What will be the expenses and when will they be paid?

Over 50% of new businesses fail within five years. One of the biggest reasons for failure is not enough start-up funds. Cash flow is huge for a business.

II. Four Steps for Budget Preparation A. Prepare a list of income and expenses. B. Gather accurate information for each

income and expense. C. Create the budget by calculating each type

of income, expense, and amount of net income or loss.

D. Show and explain the budget to people who need financial information to make decisions.

Successful businesses and individuals prepare and follow a budget. Tell students to prepare a personal budget based upon $1,200 of income per month and no financial aid from other sources.

III. Three Types of Business Budgets A. Start-Up Budget B. Operating Budget C. Cash Budget

Ask students to define cash flow. Then explain why cash flow is so important to businesses. Also explain why businesses count on a line of credit for operation.

IV. Financial Records and Financial Statements A. Recognize and analyze the financial

performance of a business 1. asset 2. depreciation 3. inventory

Explain why it is important for a business or individual to have more assets than liabilities. Explain


4. account 5. cash 6. payroll 7. tax records B. Important Financial Statements 1. Income Statement-revenue, expenses 2. Balance Sheet-assets, liabilities, net

worth C. Financial Performance Ratios 1. Current Ratio

(current assets/current liabilities) 2. Debt to Equity Ratio

(total liabilities/owner’s equity) 3. Return on Equity Ratio

(net profit/owner’s equity) 4. Net Income Ratio

(total sales/net income)

why the government requires businesses to maintain accurate business records for taxes. Payroll records are not only important for individuals but also the government to keep track of personal income taxes.

V. Payroll Management A. Financial records of employee

compensation, deductions, and net pay B. Information on each employee to calculate

the company’s payroll and to make the necessary payments to each employee

C. Payroll record-form used to document each employee’s pay history

1. name of employee 2. social security number 3. address 4. tax and benefit records

Show students a check stub that lists a variety of deductions. Explain each deduction.

VI. Financial Decision-Making A. Company Strength-assets, liabilities,

owner’s equity, sales, profits B. calculate financial performance ratios to

make decisions that result in the wise use of the company’s money

C. Steps in Financial Decision Making 1. prepare a budget 2. use the budget as a guide to the

operations of the business 3. Make needed adjustments

Explain how financial statements tell others about the strength of a company. The financial statements begin with the company’s budget. Investors, the government, shareholders, and others look at financial statements to determine the strength of a


company. Copy and paste Multiple Intelligences Graphic in appropriate place in left column.

Verbal Linguistic

Logical Mathematical

Visual Spatial

Musical Rhythmic

Bodily Kinesthetic

Intra- personal

Inter- personal

Naturalist Existentialist

Application Guided Practice (LSI Quadrant III): Ask students to determine the health of the economy by looking at the financial state of our government. Then explain how businesses respond to different economic conditions. Also discuss how the employment rate is affected by the economy and government actions. Impress upon students the importance of monitoring government activity and electing officials who are pro-business. Independent Practice (LSI Quadrant III):

1. Budget for a Franchise Assignment: Conduct research about a franchise to determine the amount of start-up money necessary to operate the business. Then prepare a PowerPoint presentation that explains the franchise process, financial requirements, and start-up money needed for the business. The presentation will be evaluated using the assigned rubric.

2. Design an Informative Brochure Assignment: Ask students to design an informative brochure that accurately describes the difference between an Income Statement and a Balance Sheet. The brochure should include examples of real businesses. The brochure will be evaluated using the assigned rubric.

3. Income Statement Game Assignment: Split the class into groups of two. Put a large blank Income Statement poster on the wall. Ask students to make cards for different accounts that appear on an income statement. Each card should have an account name and an amount. Each group should make 2 revenue cards and 4 expense cards. Divide the class into two teams; students from each team will take turns drawing a card from the deck and placing it in the correct section of the income statement. Each correct answer earns the team one point. The game will be evaluated using the assigned rubric.

Summary Review (LSI Quadrants I and IV): Q: What is the basic financial equation for businesses? A: The basic financial equation is (Revenue-Expense=Profit or Loss). Q: What are the three types of budgets needed by all businesses? A: The three business budgets include start-up, operating, and cash. Q: What are the four steps in preparing a budget?


A: The four steps include listing expenses and income; gathering accurate information from business records; creating the budget by calculating each type of income; expense, and the amount of net income/loss; and explain the budget to people who need financial information to make decisions.

Q: How has the process of maintaining financial records been affected by technology? A: Technology allows point-of-production and point-of-sale to enter data. Technology

has made financial record keeping more efficient. Q: What is the difference between a balance sheet and an income statement? A: The balance sheet shows assets, liabilities, and net worth. The income statement

shows income, expenses, and net loss/net profit. Q: What are four financial performance ratios used by managers to determine the

financial well-being of a business? A: The four ratios are current ratio, debt to equity ratio, return on equity ratio, and net

income ratio. Q: What are three steps in financial decision-making? A: Three steps in financial decision-making include preparing a budget, use the budget

to operate the business, and make needed adjustments. DIRECT DEPOSIT

Direct deposit for employee paychecks saves businesses and banks a large amount of time and money. Some employees are still reluctant to use it. What are some reasons people may not want to use this system? Prepare a short PowerPoint presentation to encourage employees to sign up for direct deposit. This presentation will be evaluated using the assigned rubric.

Evaluation Informal Assessment (LSI Quadrant III):

1. Instructor will observe students during Independent Practice. 2. Instructor will assist students as needed.

Formal Assessment (LSI Quadrant III, IV): Assigned Rubrics will be used to assess assignments 1, 2, and 3 for Independent Practice (LSI Quadrant III). A rubric will also be used to evaluate the “DIRECT DEPOSIT” assignment. Extension/Enrichment (LSI Quadrant IV):

1. Students will interview a financial manager to determine what the institution looks at when determining whether to grant a start-up business a loan. Students will then produce a quick guide for start-up business owners to use when applying for a business loan.

2. Ask students to explain the difference between the W-2 and the W-4 forms in a payroll office. Then ask students to explain why the W-2 form is important to the federal government.

3. Terms of Understanding: Ask students to write a three-paragraph paper that incorporates all of the important terms listed in this lesson. The sentences


incorporating the terms must demonstrate the student’s understanding of the terms.


Financial Planning Independent Practice Assignment Sheet

Budget for a Franchise Assignment #1: Conduct research about a franchise to

determine the amount of start-up money necessary to operate the business. Then prepare a PowerPoint presentation that explains the franchise process, financial requirements, and start-up money needed for the business. The presentation will be evaluated using the assigned rubric.

Design an Informative Brochure Assignment #2: Design an informative brochure

that accurately describes the difference between an Income Statement and a Balance Sheet. The brochure should include examples of real businesses. The brochure will be evaluated using the assigned rubric.

Income Statement Game Assignment #3: The class will be split into groups of two.

A large blank Income Statement poster will be hanging on the wall. Make cards for different accounts that appear on an income statement. Each card should have an account name and an amount. Each group should make 2 revenue cards and 4 expense cards. The class will be divided into two teams; students from each team will take turns drawing a card from the deck and placing it in the correct section of the income statement. Each correct answer earns the team one point. The game will be evaluated using the assigned rubric.


Financial Planning Budget for a Franchise Assignment #1 Rubric

Student Name: _____________________________________________________

CATEGORY 20 15 10 5 or less Content Covers topic in-

depth with details and examples. Subject knowledge is excellent.

Includes essential knowledge about the topic. Subject knowledge appears to be good.

Includes essential information about the topic but there are 1-2 factual errors.

Content is minimal OR there are several factual errors.

Organization Content is well organized using headings or bulleted lists to group related material.

Uses headings or bulleted lists to organize, but the overall organization of topics appears flawed.

Content is logically organized for the most part.

There was no clear or logical organizational structure, just lots of facts.

Attractiveness Makes excellent use of font, color, graphics, effects, etc. to enhance the presentation.

Makes good use of font, color, graphics, effects, etc. to enhance to presentation.

Makes use of font, color, graphics, effects, etc. but occasionally these detract from the presentation content.

Use of font, color, graphics, effects etc. but these often distract from the presentaion content.

Originality Product shows a large amount of original thought. Ideas are creative and inventive.

Product shows some original thought. Work shows new ideas and insights.

Uses other people's ideas (giving them credit), but there is little evidence of original thinking.

Uses other people's ideas, but does not give them credit.

Presentation Well-rehearsed with smooth delivery that holds audience attention.

Rehearsed with fairly smooth delivery that holds audience attention most of the time.

Delivery not smooth, but able to maintain interest of the audience most of the time.

Delivery not smooth and audience attention often lost

Total Score _______ Maximum 100 Points


Financial Planning Design an Informative Brochure Assignment #2 Rubric

Student Name: _____________________________________________________

CATEGORY 20 15 10 5 or less Content - Accuracy

All facts in the brochure are accurate.

99-90% of the facts in the brochure are accurate.

89-80% of the facts in the brochure are accurate.

Fewer than 80% of the facts in the brochure are accurate.

Attractiveness & Organization

The brochure has exceptionally attractive formatting and well-organized information.

The brochure has attractive formatting and well-organized information.

The brochure has well-organized information.

The brochure's formatting and organization of material are confusing to the reader.

Writing - Mechanics

Capitalization and punctuation are correct throughout the brochure.

Capitalization and punctuation are correct throughout the brochure after feedback from an adult.

There are 1-2 capitalization and/or punctuation errors in the brochure even after feedback from an adult.

There are several capitalization or punctuation errors in the brochure even after feedback from an adult.

Knowledge Gained

All students in the group can accurately answer all questions related to facts in the brochure and to technical processes used to create the brochure.

All students in the group can accurately answer most questions related to facts in the brochure and to technical processes used to create the brochure.

Most students in the group can accurately answer most questions related to facts in the brochure and to technical processes used to create the brochure.

Several students in the group appear to have little knowledge about the facts or technical processes used in the brochure.

Sources Careful and accurate records are kept to document the source of 95-100% of the facts and graphics in the brochure.

Careful and accurate records are kept to document the source of 94-85% of the facts and graphics in the brochure.

Careful and accurate records are kept to document the source of 84-75% of the facts and graphics in the brochure.

Sources are not documented accurately or are not kept on many facts and graphi



Financial Planning Income Statement Game Assignment #3 Rubric

CATEGORY 20 15 10 5 or less Knowledge Gained

All students in group could easily and correctly state several facts about the topic used for the game without looking at the game.

All students in the group could easily and correctly state 1-2 facts about the topic used for the game without looking at the game.

Most students in the group could easily and correctly state 1-2 facts about the topic used for the game without looking at the game.

Several students in the group could NOT correctly state facts about the topic used for the game without looking at the game.

Accuracy of Content

All information cards made for the game are correct.

All but one of the information cards made for the game are correct.

All but two of the information cards made for the game are correct.

Several information cards made for the game are not accurate.

Rules Rules were written clearly enough that all could easily participate.

Rules were written, but one part of the game needed slightly more explanation.

Rules were written, but people had some difficulty figuring out the game.

The rules were not written.

Cooperative work

The group worked well together with all members contributing significant amounts of quality work.

The group generally worked well together with all members contributing some quality work.

The group worked fairly well together with all members contributing some work.

The group often did not work well together and the game appeared to be the work of only 1-2 students in the group.

Creativity The group put a lot of thought into making the game interesting and fun to play as shown by creative questions, game pieces and/or game board.

The group put some thought into making the game interesting and fun to play by using textures, fancy writing, and/or interesting characters.

The group tried to make the game interesting and fun, but some of the things made it harder to understand/enjoy the game.

Little thought was put into making the game interesting or fun



DIRECT DEPOSIT Financial Planning DIRECT DEPOSIT Rubric

Student Name: _____________________________________________________

CATEGORY 20 15 10 5 or less Content Covers topic in-

depth with details and examples. Subject knowledge is excellent.

Includes essential knowledge about the topic. Subject knowledge appears to be good.

Includes essential information about the topic but there are 1-2 factual errors.

Content is minimal OR there are several factual errors.

Organization Content is well organized using headings or bulleted lists to group related material.

Uses headings or bulleted lists to organize, but the overall organization of topics appears flawed.

Content is logically organized for the most part.

There was no clear or logical organizational structure, just lots of facts.

Attractiveness Makes excellent use of font, color, graphics, effects, etc. to enhance the presentation.

Makes good use of font, color, graphics, effects, etc. to enhance to presentation.

Makes use of font, color, graphics, effects, etc. but occasionally these detract from the presentation content.

Use of font, color, graphics, effects etc. but these often distract from the presentaion content.

Originality Product shows a large amount of original thought. Ideas are creative and inventive.

Product shows some original thought. Work shows new ideas and insights.

Uses other people's ideas (giving them credit), but there is little evidence of original thinking.

Uses other people's ideas, but does not give them credit.

Presentation Well-rehearsed with smooth delivery that holds audience attention.

Rehearsed with fairly smooth delivery that holds audience attention most of the time.

Delivery not smooth, but able to maintain interest of the audience most of the time.

Delivery not smooth and audience attention often lost



Documents

Lesson Plan —Unit One International and Domestic Businessdata.cteunt.org/content/files/business/principles-business... · Lesson Plan —Unit One International and Domestic Business