Lesson Plan

• Define working capital and calculate it using current assets and liabilities.
• Explain why working capital is essential for liquidity, operational continuity, and risk mitigation.
• Analyse the components of working capital and evaluate strategies to manage cash, receivables, inventory, and payables.
• Apply the cash‑conversion‑cycle concept to improve working‑capital efficiency.

• Projector and screen
• PowerPoint slides summarising key concepts
• Printed worksheet with the example calculation
• Calculator for each student
• Handout of the cash‑conversion‑cycle diagram
• Whiteboard and markers

Start with a quick scenario: “A small manufacturer can’t pay its suppliers at month‑end – what happens?” Ask students to recall any real‑world examples where cash shortages halted operations. Explain that today’s success criteria are to describe working capital, list its components, and show how effective management supports business stability.

1. Do‑Now (5’) – Students write a one‑sentence definition of working capital on a sticky note; teacher collects for quick check.
2. Mini‑lecture (10’) – Present the formula Working Capital = Current Assets – Current Liabilities and walk through the component table.
3. Guided calculation (12’) – Using the printed worksheet, students compute working capital for the given manufacturing firm; teacher circulates to verify steps.
4. Interactive discussion (8’) – Explore why working capital matters (liquidity, flexibility, creditworthiness) using the bullet list from the source.
5. Cash‑Conversion‑Cycle activity (10’) – In pairs, students label a provided diagram and identify where cash is tied up.
6. Check for understanding (5’) – Quick quiz via Kahoot/hand‑raise: three multiple‑choice questions on components and management strategies.

Summarise that working capital is the lifeblood of daily business activity and that balancing its elements improves profitability and reduces risk. Ask each student to write one actionable tip for managing working capital on an exit ticket. Assign homework: complete a short case study calculating working capital for a different company and suggest two improvement measures.