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
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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:
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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
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•
•
•
•
•
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
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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
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?
Notes to Instructor
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.
Explain why it is
important for a
business or
individual to have
more assets than
liabilities. Explain
.
IV. Financial Records and Financial Statements
A. Recognize and analyze the financial
performance of a business
1. asset
2. depreciation
3. inventory
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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
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company.
Copy and paste Multiple Intelligences Graphic in appropriate place in left column.
Verbal
Linguistic
Logical
Mathematical
Visual
Spatial
Musical
Rhythmic
Bodily
Kinesthetic
Intrapersonal
Interpersonal
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 probusiness.
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?
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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
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incorporating the terms must demonstrate the student’s understanding of the
terms.
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9
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.
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Financial Planning
Budget for a Franchise Assignment #1 Rubric
Student Name:
_____________________________________________________
20
15
10
5 or less
Content
Covers topic indepth 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, Delivery not smooth
but able to maintain and audience
interest of the
attention often lost
audience most of the
time.
CATEGORY
Total Score _______
Maximum 100 Points
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Financial Planning
Design an Informative Brochure Assignment #2 Rubric
Student Name:
_____________________________________________________
CATEGORY
Content Accuracy
20
15
10
5 or less
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 & The brochure has
exceptionally
Organization
attractive formatting
and well-organized
information.
The brochure has
The brochure has
attractive formatting well-organized
and well-organized information.
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 9485% 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
Total Score _______
Maximum 100 Points
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12
Financial Planning
Income Statement Game Assignment #3 Rubric
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 12 facts about the
topic used for the
game without looking
at the game.
Most students in the
group could easily
and correctly state 12 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 All but one of the
made for the game
information cards
are correct.
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, The rules were not
but people had some written.
difficulty figuring out
the game.
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
CATEGORY
Total Score _______
Maximum 100 Points
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13
DIRECT DEPOSIT
Financial Planning
DIRECT DEPOSIT Rubric
Student Name:
_____________________________________________________
20
15
10
5 or less
Content
Covers topic indepth 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, Delivery not smooth
but able to maintain and audience
interest of the
attention often lost
audience most of the
time.
CATEGORY
Total Score _______
Maximum 100 Points
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14