The Bottom Line
0425 Marketing Applications
TOPIC OR UNIT OF STUDY
The importance of Financial Analysis
CONTENT STANDARD(S) AND OBJECTIVE(S)

Describe the need for financial information

Describe the nature of budgets

Describe the nature of cash flow statements

Explain the nature of balance sheets

Describe the nature of income statements

Determine the nature of taxes
INTRODUCTION
Remember the Lemonade Stand game from you Marketing Principles class? It was a fun way to learn
about the rewards and consequences of good customer relations. But did you make a profit? What
does it mean to make a profit? How do you use the information provided in the game to create a
financial statement? Was it possible to budget your income and expenses? In this unit we will use the
game again to create some finance statements and learn where to find financial information.
ESSENTIAL QUESTION
Where do we find financial information, and how can we use it to create reports that will help us to
make marketing decisions?
INTEGRATION OF ACADEMICS, TECHNOLOGY, ENTREPRENEURSHIP
To complete this project, students will use basic terms and concepts, to complete the following
academic, technology, and entrepreneurship activities:
1. Academic activities – concept analysis, critical thinking and writing skills, and solving problems;
2. Technology activities – website usage, use of MOS Excel; and Word;
3. Entrepreneurship activities – taking on ownership role with lemonade stand activity and building
statements from information collected.
STUDENT INVOLVEMENT IN PLANNING PROCESS
Students will decide make their own decisions and changes to their lemonade recipe in order to come
up with the results to record in their spreadsheets.
TASK(S)
 Define key financial terms and their purpose from the textbook & discuss
30 min
 Describe basic financial statements on Activity 1 worksheet
60 min
 Identify data on spreadsheet while operating the Lemonade Stand Game, Activity 2 90 min
 Generate financial statements from data collected in Activity 3 game
60 min
 Reflect on financial statements credit with writing Activity 4
30 min
 Review the nature of tax from the text book, complete writing Activity 5
60 min
 Summarize key concepts and wrap up unit with a flashcard/concentration game
30 min
RESOURCES
Websites
http://www.lemonadestandgame.com/
http://www.accounting-basics-for-students.com/cash-flow-statement-example.html
http://www.accounting4management.com/cash_budget.htm
http://simplestudies.com/how-to-prepare-balance-sheet.html/page/6
http://www.computer-accounting-software-elp.com/Example_Income_Statement.html
Armstrong, Gary, and Kotler,Philip, “Marketing, An Introduction” Prentice Hall 2000
TECHNOLOGY USE
Computers, Websites listed above, Microsoft Excel, and Word software.
EVALUATION
#1 – Activity 1 - Describe basic financial statements on worksheet
#2 - Activity 2 – Collect data from playing the game
#3 – Activity 3 – Generate financial statements from spreadsheet
#4 – Activity 4 - Reflection on financial statements credit
#5 – Activity 5 – Writing a review on the nature of tax
Total points for these activities
24 pts
11 pts
24 pts
32 pts
20 pts
111 pts
Authentic assessments will be evaluated with the rubrics that are located on each activity
TIMELINE
Block scheduling-5 days, periods-10 days. This includes time for lecture, textbook readings, and
discussions. Depending on student’s ability, extended time may be needed on some projects.
Day 1 Define key financial terms and their purpose from the textbook & discuss
30 min
Describe basic financial statements on Activity 1 worksheet
60 min
Day 2 Identify data on spreadsheet Activity 2, play Lemonade Stand Game
90 min
Day 3 Generate financial statements from data collected in Activity 3 game
60 min
Reflect on financial statements credit with writing Activity 4
30 min
Day 4 Review the nature of tax from the text book, complete writing Activity 5
60 min
Summarize key concepts & wrap up with a flashcard/concentration game
30 min
CONCLUSION
At the conclusion of this project students will understand how to collect financial data, and begin to
understand how this information helps businesses make decisions. They also will have a basic
understanding of taxes in the business environment.
Written & Visual worksheet
Using the websites provided, the textbook, and any research of you own, describe a budget statement in
3-4 sentences:
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
Create a budget statement that you could use with a simple Kool-Aid stand.
Using the websites provided, the textbook, and any research of you own, describe a cash flow statement
in 3-4 sentences:
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
Create a cash flow statement that you could use with a simple Kool-Aid stand.
Using the websites provided, the textbook, and any research of you own, describe a balance sheet in 3-4
sentences:
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
Create a balance sheet that you could use with a simple Kool-Aid stand.
Using the websites provided, the textbook, and any research of you own, describe an income statement
in 3-4 sentences:
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
Create an income statement that you could use with a simple Kool-Aid stand.
Grading Rubric:
Topic
3 pts
Answered
fully
in 3-4 sentences,
Budget
Cash Flow
Statement
Balance
Sheet
Income
Statement
describing elements & use
Accurate statement created using
necessary elements only
Answered fully in 3-4 sentences,
describing elements & use
Accurate statement created using
necessary elements only
Answered fully in 3-4 sentences,
describing elements & use
Accurate statement created using
necessary elements only
Answered fully in 3-4 sentences,
describing elements & use
Accurate statement created using
necessary elements only
2 pts
1 pt
Used 3 sentences, but not all
elements described or uses given
Statement has some inaccuracies
but necessary elements used
Used 3 sentences, but not all
elements described or uses given
Statement has some inaccuracies
but necessary elements used
Used 3 sentences, but not all
elements described or uses given
Statement has some inaccuracies
but necessary elements used
Used 3 sentences, but not all
elements described or uses given
Statement has some inaccuracies
but necessary elements used
Less than 3 sentences or only
described either elements OR use
Inaccurate and some necessary
element missing
Less than 3 sentences or only
described either elements OR use
Inaccurate and some necessary
element missing
Less than 3 sentences or only
described either elements OR use
Inaccurate and some necessary
element missing
Less than 3 sentences or only
described either elements OR use
Inaccurate and some necessary
element missing
Total Points
_______ of 24 points
Play the Game!
In your Marketing Principles class you played the Lemonade Stand Game to help you understand the
importance of customer relations. Today we are going to play the game again as a way of collecting
financial information that can be used to help the business make future decisions.
Start by opening the website http://www.lemonadestandgame.com/ and review the directions for the
game. Each student will be playing the game independently and making your own decisions, so your
data will NOT be identical to anyone else.
After you have reviewed the directions, open the Lemonade Stand spreadsheet. The data collection tab
is the only section that needs to be filled out for this assignment. Only the white cells need to be
completed. The blue cells have formulas in them to calculate information that you will need to help you
make decisions about changes in recipe and amount of inventory to purchase.
Complete the entire row for the Day before moving on to the next row.
Grading Rubric:
Points
Description
5
Each of 31 rows completed by entering data into the blank cells (5 pts for all,
4 pts for 28-30 rows, 3 pts for 25-27 rows, 2 pts for 22-24 rows, 1 pt for 20-21 rows)
3
Changes in the recipe as needed to accommodate for weather or customer
satisfaction (3 pts if recipe changes show customer satisfaction, 2 pts if changes made
Earned
but appear random, 1 pt if change made once then left)
3
Purchases appropriately to have projected sales close to actual sales without
“sold out’s” (3 pts for 2 or less sold outs & high % of sales, 2 pts for 3-5 sold outs with
more than ½ high % of sales, 1 pt for 6-8 sold outs & 30% or more high % of sales)
11
Total Points Earned ___ of 11
Let’s Find the Bottom Line!
Now that you have created the financial information worksheet it’s time plug in the figures to find our
bottom line! One tip to help you complete the statements: you only need to fill in the yellow cells on
the statement pages.
1. Start with the Cash Flow Statement:
Notice that the green columns marked on the data collection tab is where you will find the numbers
needed for the Cash Flow Statement. The Cash at the Beginning comes from column B; cash
receipts from customer comes from column Z; and cash paid to suppliers from inventory comes
from column B less column O.
Complete Day 1 all from row 3; and Day 1-15 using row 3-17, etc.
2. Move on to Budgeting Statement:
Notice that the yellow column marked on the data collection tab is where you will find the numbers
needed for the Budgeting Statement. Temperature comes from column W; cups estimated comes
from column V; price per cup comes from column P; cost of cups comes from the game and should
be averaged; cost of lemons comes from the game and should be averaged; cost of sugar comes
from the game and should be averaged; and the cost of ice cubes comes from the game and should
be averaged.
Complete Day 1 all from row 3; and Day 1-15 using row 3-17, etc.
3. Now the Balance Sheet:
Notice that the blue columns marked on the data collection tab is where you will find the numbers
needed for the Balance Sheet. Cash balance comes from column O. Inventory balances are after
sales so you will need to go to the starting balance on the next day: cups come from column C;
lemons come from column F; sugar comes from column I; and ice cubes come from column L.
Average price comes from the purchase screen from the game. (Example: 10@ $0.10, 20 @ $0.08,
45 @ $0.06 – Average would be $0.07)
Complete Day 1 all from row 3; and Day 1-15 using row 3-17, etc., except for the Inventory which
should be used as directed in the paragraph above.
4. Finally the Income Statement:
Notice that the red columns marked on the data collection tab is where you will find the numbers
needed for the Income Statement. Cash received from Sales comes from column Z; Beginning Cash
Balance comes from column, and Ending Cash Balance comes from column O.
Complete Day 1 all from row 3; and Day 1-15 using row 3-17, etc.
Grading Rubric:
Topic
1-Accuracy
2-Accuracy
3-Accuracy
4-Accuracy
1-Completeness
2-Completeness
3-Completeness
4-Completeness
3 pts
Correct #s used on all
Correct #s used on all
Correct #s used on all
Correct #s used on all
All blanks filled as directed
All blanks filled as directed
All blanks filled as directed
All blanks filled as directed
2 pts
Some incorrect #s used
Some incorrect #s used
Some incorrect #s used
Some incorrect #s used
One or two blanks left
One or two blanks left
One or two blanks left
One or two blanks left
Total Points
1 pts
Few accurate #s used
Few accurate #s used
Few accurate #s used
Few accurate #s used
More than 2 blanks left
More than 2 blanks left
More than 2 blanks left
More than 2 blanks left
_______ of 24 points
What does the Bottom Line Mean?
So now you have completed the financial statements, but what does it all really mean?
Using the descriptions you created in Activity #1, and the statements you created in Activity #3, write a
description of what EACH of those statements mean to YOU as the business owner of the Lemonade
Stand. What would you do differently based on these statements? How would these statements help
you in continuing this progress and expanding your business?
Write a ½ page reflection for each of those statements, making it a two page paper, in a Word
document. Notice the grading rubric below to help you complete the activity.
Grading Rubric:
Topic
4 points
Well
described
Balance Sheet
meaning, answering
content
3 points
2 points
1 point
questions fully
Described meaning well,
1 question covered fully
but other partially
Well described, but
both questions only
partially covered
Description is minimal,
and both questions are
sparsely answered
Income
Statement
content
Well described
meaning, answering
questions fully
Described meaning well,
1 question covered fully
but other partially
Well described, but
both questions only
partially covered
Description is minimal,
and both questions are
sparsely answered
Cash Flow
content
Well described
meaning, answering
questions fully
Described meaning well,
1 question covered fully
but other partially
Well described, but
both questions only
partially covered
Description is minimal,
and both questions are
sparsely answered
Budget
Statement
content
Well described
meaning, answering
questions fully
Described meaning well,
1 question covered fully
but other partially
Well described, but
both questions only
partially covered
Description is minimal,
and both questions are
sparsely answered
Length of
each section
Full half page, 2-3
paragraphs, written on
each section
Full half page written,
but only one lengthy
paragraph
Less than half page
written on one or two
topics
Most of the topics have
less than half page
written
Spelling &
grammar
Accurate spelling and
grammar usage
1-2 spelling or grammar
errors
3-4 spelling or grammar
errors
5-6 spelling or grammar
errors
Professional
formatting
Meets all requirements:
 1.0” margins,
 Arial 12 pt font
 1.5 line spacing
 Name in heading
 Topic sections labeled
1 of the required
elements was not met
completely
2 of the required
elements was not met
completely
2 of the required
elements was not met
completely
Flow of
content
Topics flow well in each
section, and from
section to section.
Sections flow well.
Sections are connected
but a bit disjointed
Sections have good
content but simply fact
listing
Total points ______ of 32 points
The Taxman Cometh
Taxes are a touchy subject, no matter who you are talking to. There are several different types of tax:
payroll, business, personal, sales, privilege, etc.
Today we are going to look at the nature of tax for businesses. The most common type of taxes that all
businesses deal with is sales tax. Sales taxes are calculated by multiplying the total amount of the sale
by the percentage required by the state.
Complete the following questions using the websites provided:
1. How many states in the US charge sales taxes? _______________________________________
http://money.howstuffworks.com/personal-finance/personal-income-taxes/state-salestaxes.htm
(2pts)
2. What is the purpose of state sales taxes? ____________________________________________
(same website as #1)
(2pts)
3. A sales tax is classified as a ____________________ tax. (same website as #1, next page) (2pts)
4. What is the sales tax called in Europe? _______________________________________________
http://www.ehow.com/how-does_4570057_sales-tax-work.html
(2pts)
5. What major item in the US has inclusive tax? __________________________________________
(same website as #4)
(2pts)
6. Especially high sales taxes are often used as a tool _____________________________________.
_____________________ (same website as #4)
(2pts)
7. Do an Internet search for the “Nature of Taxation”. List the website where found, ___________
______________________________________________________________________________
and write the description here: _____________________________________________________
______________________________________________________________________________
______________________________________________________________________________
__________________________________________________________________________(2pts)
8. What two taxes are combined when calculated for WV? ________________________________
http://www.state.wv.us/taxrev/publications/localSalesAndUseTaxes.pdf
(2pts)
9. Who has to collect WV sales tax? ___________________________________________________
(same website as #8)
(2pts)
10. WV is known to give relief from sales taxes in some instances. Find one on the website given &
list it here: _____________________________________________________________________
http://www.wva.state.wv.us/wvtax/newsReleaseDocuments.aspx
(2pts)
Total points for this worksheet
____ of 20 points