Lesson Plan

• Describe the three main elements of a statement of financial position.
• Explain how capital employed is derived from assets and liabilities.
• Calculate capital employed using both the asset‑side and financing‑side formulas.
• Analyse why capital employed is important for profitability ratios such as ROCE.
• Apply the concept to a set of sample figures and interpret the result.

• Projector and screen
• Whiteboard and markers
• Printed statement of financial position handouts
• Calculator for each student
• Worksheet with capital‑employed problems
• Sticky notes for quick checks

Start with the question, “If you have £500,000 to run a business, how much of it is actually being used to generate profit?” Connect this to students’ prior knowledge of balance sheets. Explain that by the end of the lesson they will be able to identify the key elements of a statement of financial position, compute capital employed, and state why it matters.

1. Do‑now (5') – short quiz on assets, liabilities and equity.
2. Mini‑lecture (10') – overview of the statement of financial position and the two capital‑employed formulas.
3. Guided example (12') – walk through the sample calculation on the projector, highlighting each step.
4. Pair activity (15') – students use a new handout to calculate capital employed using both methods and compare answers.
5. Concept check (5') – exit‑ticket on sticky notes: one reason why capital employed matters.
6. Summary & homework (3') – recap key points and assign the worksheet for further practice.

Review the two formulas and the role of capital employed in assessing business efficiency. Collect exit tickets to gauge understanding, then remind students to complete the worksheet at home, focusing on different numerical scenarios.