Lesson Plan

• Define working capital and calculate it using the formula (Current Assets – Current Liabilities).
• Explain why adequate working capital is essential for liquidity, solvency, profitability and growth.
• Identify the main components of current assets and current liabilities.
• Analyse internal and external factors that influence a firm’s working‑capital requirements.
• Apply basic techniques to improve cash flow, manage receivables, control inventory and negotiate payables.

• Projector and screen
• Whiteboard and markers
• Printed worksheet with the sample balance‑sheet data
• Calculator for each student
• Handout of the working‑capital cycle diagram
• Laptop with spreadsheet software (demonstration)

Begin with a quick question: “If a shop runs out of cash before it receives payment from customers, what happens?” Connect this to prior knowledge of assets and liabilities. Explain that today’s success criteria are to define, calculate, and evaluate the importance of working capital and to suggest ways to manage it effectively.

1. Do‑now (5') – short quiz on distinguishing current assets vs. current liabilities.
2. Mini‑lecture (10') – definition of working capital, formula, and key components.
3. Guided calculation (10') – students use the printed worksheet to compute working capital from the sample data.
4. Group activity (15') – analyse factors influencing working‑capital needs and propose one management technique for each factor.
5. Class discussion (10') – share group ideas, link to liquidity, solvency and profitability.
6. Exit ticket (5') – each student writes one actionable step a business could take to improve its working capital.

Recap the definition, formula, and why working capital matters for a firm’s health. Collect the exit tickets to gauge understanding, and assign homework: locate a real company’s current assets and liabilities from its latest annual report and calculate its working capital.