Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

• Class : Y11

• Lesson Topic: Finance

• Scheme of Work: Working Capital

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Lesson Objectives

ALL (KNOWLEDGE)Define and describe working capital .

MOST (ANALYSIS) Examine and Analyse the working capital cycle.

SOME (EVALUATION ) Evaluate the pros and cons & Justify your views on methods to improve the working capital.

P&DPlanning and

Data

Higher thinking

Skills

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Planning ToolsP&DPlanning and

Data

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Keyword Definition

Working capital

Working capital cycle

Current assets

Current liabilities

CONNECTIVES

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

CONNECTIVES for AnalysisCONNECTIVES for ApplicationCONNECTIVES for Evaluation

COMPARINGEqually…As with…Like…In the same way…Similarly…Even so…Likewise…CAUSE & EFFECT

Consequently… Due to…As a result… Therefore..Because of… Because…

CONCLUDINGFirstly… After…Secondly… Before…Overall… I believe…Finally… I think …In conclusion… it depends…To conclude… short term…Meanwhile… Long term…

CONTRASTINGAlthough… Except…Moreover… If…However… Yet…Apart from… Unless…Despite… As long as…

EMPHASISINGMost importantly…Significantly…Notably…Especially…Above all…In particular…Indeed…

QUALIFYINGDespite… Yet…As long as… Unless…Apart from… If…Moreover… Except…However… Although…

ADDINGIn addition… And…Too… Also…Additionally… As well as…Furthermore…

ILLUSTRATINGFor instance… Such as…In the case of… So…For example…As revealed by…As illustrated by…

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Climb the LadderA-A*

1. To what extent 2. Do you think3. Evaluate whether (8-10m) 10+ connectives & key words

C-B

1. Explain 2. Compare3. Analyse (5-8m) 5+ connectives & key words

E-D

1. Define 2. Describe3. Identify (2-4m) 2 + connectives & key words

ATDApply to

demonstrate

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Videos

• http://www.investopedia.com/video/play/working-capital/

• https://www.youtube.com/watch?v=7JBwhhrwUCk

• What is working capital ?

• How does the Duck Shop manage working capital?

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Having sufficient funds at the right time to be able to meet liabilities

Amount of money for day to day trading.

Working capital =current assets - current liabilities

2- 1 (ideal)

Working Capital

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Working Capital Cycle

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Working Capital Problems

PROBLEMS…

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

WC Problems• Demand changes / Seasonal • External changes – interest rate rise.• Poor credit control – not getting the money in!• Internal problems – Extra costs, lower revenues• Financial Mismanagement

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Implication of poor WC• Weakened Market Position

• Difficulties with creditors

• Liquidity issues.

• Damage corporate image

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Managing Working Capital • To improve your working capital (cash flow)

– Delay payments to suppliers.– Quickening production time.– Quicken payments from customers.

– Source of Finance (LT or ST)

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Plenary • What happens if a company has a large surplus of WC?

• The major cause of liquidity problems is poor management of working capital. To what extent do you agree with this statement?

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Lesson Objectives

ALL (KNOWLEDGE)Define and describe working capital .

MOST (ANALYSIS) Examine and Analyse the working capital cycle.

SOME (EVALUATION ) Evaluate the pros and cons & Justify your views on methods to improve the working capital.

P&DPlanning and

Data

Higher thinking

Skills

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Climb the LadderA-A*

1. To what extent 2. Do you think3. Evaluate whether (8-10m) 10+ connectives & key words

C-B

1. Explain 2. Compare3. Analyse (5-8m) 5+ connectives & key words

E-D

1. Define 2. Describe3. Identify (2-4m) 2 + connectives & key words

ATDApply to

demonstrate

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Pass the ParcelAdd as much information you can remember from today’s lesson

When the horn blows – pass your sheet to the next table!

RReview the

Learning

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Neighbours

2 things your neighbour has learnt today

1 question your neighbour wants

to ask

RReview the

Learning

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

Summarise your learning today into a single tweet

140 characters

Keep all of the information

Tweet Tweet

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RReview the

Learning

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

1 questionyou need to ask

2 new things you learnt

3 pieces of information

RReview the

Learning

Business Section: Finance Further Reading C.27

Keywords – Working capital , working capital cycle, current assets, current liabilities.

5 minutes. . . GO

STOP