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Profit, Loss and Value Added - Lesson Plan: 2 x 1 hour lessons
A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal with Profit, Loss and Value Added and are relevant to the following specifications:
- AQA: Module 3, 10.2; Module 3, 12.5
- Edexcel: Unit 1, Sections 2 and 3
- OCR: Module 2871
Aim:
These lessons seek to cover some very basic issues, issues that are often assumed to be clear but which, if the evidence of many hundreds of exam papers is anything to go by, are not understood particularly well. Many students see business activity in black and white - businesses make a profit; if they don't, they go bust, and that's it! This Activity is meant to highlight how very well-known companies, which many students may assume are profitable, in fact can make awesome losses but stay in business and still seemingly prosper. It is hoped that the Activity will help students to appreciate that the situation is a little more complex and that many factors come in to play. The Activity is also designed to try to capture something of the dynamic nature of markets. Part of the Activity asks students to use supply and demand to help with their answer. Some of the specifications point out that detailed knowledge of theory is not required - the demands on your students therefore can be left to the individual in this respect.
Learning Objectives:
At the end of the lessons, students should understand the following:
- The meaning of the term 'profit' and be able to distinguish between various types of profit
- The functions of profit and the meaning of profit margin as distinct to total profit
- The causes of losses and how businesses can sustain losses for a period
- The basic forces behind the market system
- The meaning of the term 'value added' and be able to apply it to specific examples
Resources:
Lesson Structure:
Lesson 1
- Begin by posing the following questions:
What is profit?
Is profit essential for a business to survive?
How much profit is acceptable?
What happens if a business makes a loss?
Why do companies post 'profits warnings'?
The intention is for open-ended questions to facilitate thinking and discussion. These can be put on the white/chalk board or given out on slips of paper and can be done in groups or individually. Discuss the students' responses - highlight and note down the key points to arise from the discussion. (15 minutes)
- Use the Presentation to cover the key points in the lesson - note the slide notes that give guides about occasions when a timer mode has been included to facilitate question and answer sessions. These can be amended on downloading the Presentation. (20 minutes)
- Introduce the Activity - this can be pursued as a group task or individually. The research can be done in groups with the actual report being demanded as a written piece from each student, or it can be presented by groups to the rest of the class. (20 minutes)
- Review of the main points of the lesson and identify the task for the next lesson - to carry out further research and write up the report. (5 minutes)
Lesson 2
- Review learning from the last lesson - use the learning objectives as the main source of questioning here. (10 minutes)
- Finish the report, presenting it in the format decided. Remind students of the assessment objectives as outlined in the Activity. (50 minutes)
- Students should be encouraged to spend some time after the Activity discussing the outcome of their investigations with their peers or working on their 'learning journal'.
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