Lesson Plan: Developing a Cash Flow Forecast

Subject: Business Studies

Year Level: Year 9 and Year 10

Duration: 46 Minutes

Class Size: 40 Students

Lesson Objectives:

1. Students will understand the key components and terms related to a cash flow forecast.
2. Students will create a basic cash flow forecast using a spreadsheet.
3. Students will analyse the impact of a negative closing bank balance and explore strategies to manage it.

Key Competencies:

• Thinking: Students will engage in problem-solving and decision-making when they analyse and adjust the cash flow to manage a negative balance.
• Using language, symbols, and texts: Students will learn and use specific financial terminology and spreadsheet symbols to effectively communicate and interpret cash flow information.
• Managing self: This lesson encourages students to take initiative and be responsible for their learning through interactive and practical financial management tasks.

Curriculum Principle:

• The Treaty of Waitangi Principle: Teaching and learning will acknowledge the importance of partnerships and equity, promoting financial competence and independence among all students, essential for future readiness in diverse economic contexts.

Curriculum Links:

• Social Sciences: Business Studies
  • Level 5: "Understand how producers make goods and services, that consumers use."
  • The New Zealand Curriculum Online - Social Sciences

Resources:

• Computers with spreadsheet software (e.g., Microsoft Excel, Google Sheets)
• Projector and screen for demonstrations
• Handouts with vocabulary and examples of cash flow forecasts
• Link to online resources and tutorials on using spreadsheet functions (Excel Easy)

Lesson Outline:

Introduction (10 minutes)

1. Presentation: Brief introduction to the importance of cash flow management in businesses using a simple example related to a familiar business (e.g., a local café).
2. Discussion: What is cash flow? Introduction to key terms: Revenue, Expenses, Net Cash Flow, Opening/Closing Balance.

Activity Part 1: Creating a Cash Flow Forecast (15 minutes)

1. Demonstration: Teacher shows how to set up a basic cash flow forecast in a spreadsheet.
2. Student Activity: Students create their own cash flow forecasts based on provided example scenarios.

Activity Part 2: Managing a Negative Closing Balance (10 minutes)

1. Scenario Analysis: Students identify any negative balances in their forecasts.
2. Group Brainstorming: In small groups, students discuss potential strategies to alter a negative closing bank balance (increasing income, reducing expenses, delay payments, etc.).
3. Sharing Solutions: Groups share their strategies and discuss the consequences of these decisions, promoting an understanding of financial decision-making impacts.

Conclusion and Reflection (11 minutes)

1. Group Discussion: How do the changes made to the cash flow forecast reflect responsible financial management?
2. Reflection: Students reflect on how this exercise might apply to personal financial decisions in the future.
3. Homework/Extension: Students tasked to modify an existing business idea’s cash flow forecast for improvements and prepare a brief explanation of their changes.

Evaluation:

• Student Reflections: Gather insights from students on what they learned and how they plan to apply this knowledge.
• Cash Flow Forecast Review: Assess students’ ability to accurately create and modify cash flow forecasts.

Supporting the Development of Curriculum Principle:

The chosen curriculum principle, The Treaty of Waitangi, is addressed as the lesson promotes equitable financial education, ensuring all students understand and are able to manage finances, a skill critical in upholding the principle of equity in educational outcomes and future economic participation. This lesson plan supports foundational skills in finance, facilitating learners’ capabilities to operate in New Zealand’s economic environments, respecting the diverse backgrounds and future opportunities of all students.