Lesson Plan

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Lesson Plan
Grade: Date: 03/03/2026
Subject: Business
Lesson Topic: managing trade receivables and trade payables
Learning Objective/s:
  • Describe the purpose of managing trade receivables and payables in working capital.
  • Calculate and interpret key ratios (ACP, DSO, APP, DPO, CCC).
  • Evaluate credit policies and payment terms to optimise cash flow.
  • Apply strategies such as early‑payment discounts, factoring, and supplier negotiations.
  • Analyse the impact of receivables/payables decisions on profitability.
Materials Needed:
  • Projector and screen
  • Whiteboard and markers
  • Handout with key ratios and formulas
  • Sample financial data sheets for calculations
  • Calculator or spreadsheet software
  • Case‑study cards illustrating credit‑policy scenarios
 Introduction:
Begin with a quick poll: how many students have ever bought something on credit. Discuss how credit affects a business’s cash flow and set today’s success criteria – students will be able to define trade receivables/payables, compute essential ratios, and propose strategies to improve the cash conversion cycle.
Lesson Structure:
  1. Do‑now (5'): Students answer a warm‑up question on credit purchases and share responses.
  2. Mini‑lecture (10'): Define trade receivables/payables and introduce key ratios with formulas on screen.
  3. Guided practice (15'): Calculate ACP, DSO, APP, DPO, and CCC using provided data sheets.
  4. Strategy workshop (15'): In groups, analyse a case study, decide on credit policy, discounts or factoring, and present recommendations.
  5. Whole‑class debrief (10'): Discuss advantages/disadvantages of each strategy and link to cash‑flow impact.
  6. Quick check (5'): Exit ticket – write one action a business could take to shorten its cash conversion cycle.
Conclusion:
Recap how effective management of receivables and payables shortens the cash conversion cycle and supports profitability. Collect the exit tickets and assign homework: complete a worksheet calculating ratios from a new data set and write a brief justification for a chosen credit policy.