BTEC INTERNATIONAL BUSINESS

UNIT 3: BUSINESS FINANCE

Unit title Business Finance Key to learning opportunities

Guided learning AW Assignment RS Revision session

90
hours writing
GS Guest speaker V Visit
Number of lessons 45

Duration of IS Independent WE Work experience

2 hours
lessons study

Links to other units GW Group work

● Unit 1: Exploring Business

Lesson Classroom
Lesson Topic Suggested activities
type resources

Learning aim A: Explore types of business finance available at different stages in the growth of a business
1–2 Topic A1: Sources of GW  Tutor-led discussion: Introduce the topic of business finance and  Tutor
income what will be covered by the unit. Introduce the session with a brief presentation and
Advantages, discussion considering why businesses may need to find sources notes
disadvantages, short- of finance.  PCs, laptops or
term and long-term:  Small group work: Ask learners to come up with a list of sources tablets with
 internal: from which a business can obtain finance (they could use the internet
internet to help). connection for
o retained profit
 Tutor-led activity: Ask group members to feed back their findings research
o net current assets
and write these down on the whiteboard.  Whiteboard
o sale of assets
 Small group work: Ask learners to work in their small groups
 external: again and to divide the sources of finance that they identified in
o owner’s capital the previous exercise into internal and external sources and short-
term, medium-term and long-term sources.
o loans
 Group discussion: Discuss the learners’ classifications from the

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 BTEC INTERNATIONAL BUSINESS
UNIT 3: BUSINESS FINANCE

Lesson Classroom
Lesson Topic Suggested activities
type resources

o crowd-funding previous activity as a group and ensure learners’ understanding.

o mortgages  Plenary session: Recap the main learning points covered in the
o venture capital lesson.

o debt factoring
o hire purchase
o leasing
o trade credit
o grants
o donations
o peer to peer
lending
o invoice discounting
3–5 Topic A2: Sources of GW  Tutor presentation: The advantages and disadvantages of  Tutor
revenue different sources of finance. presentation and
 Revenue income from  Small-group discussion: Ask learners to list the different types of notes
selling activities: income a business could have.  PCs, laptops or
o cash sales  Tutor presentation/individual activity: Explain the difference tablets with
between revenue income from selling activities and revenue internet
o credit sales
income from supplementary income. connection for
 Revenue income from research
supplementary  Small group activity: Assign each group a different source of
revenue. They are to research all elements of this source and  Whiteboard
income:
present their findings back to the group.
o rent received
 Plenary session: Recap the main learning points covered in the
o commission
lesson.
received

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BTEC INTERNATIONAL BUSINESS
UNIT 3: BUSINESS FINANCE

Lesson Classroom
Lesson Topic Suggested activities
type resources

o interest received
o discount received
6–7 Topic A3: Business GW  Tutor-led discussion: Discuss learners’ understanding of the  PCs, laptops or
finance and types of differences between start-up and developing businesses. tablets with
business  Small group activity: Learners identify a list of start-up internet
 Start-up and businesses in the local area. Each group could prepare a short connection for
developing presentation on one of the businesses and explain their thoughts research
businesses on reasons why the business was formed, how it was financed and  Whiteboard
whether or not it is likely to succeed. Learners should incorporate
an identification of current trends and competitors into their
analysis of whether the business will succeed or not.
 Learners’ presentations: Groups present their findings to the
rest of the class.
 Small group activity: Each group chooses a developing business
to research. They should consider how the business is funded.
They then evaluate whether the business is successful and
whether it will continue to be successful in the future.
 Group discussion: Discuss the main differences learners have
found between finance for start-up businesses and finance for
developing companies.
 Plenary session: Recap the main learning points covered in the
lesson.
8–10 Topic A3: Business GW  Lead-in activity: Ask learners to draw up a list of objectives, aims  PCs, laptops or
finance and types of or targets that would be relevant to a business. Classify the tablets with
business objectives in terms of financial and non-financial (qualitative) internet
connection for
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 BTEC INTERNATIONAL BUSINESS
UNIT 3: BUSINESS FINANCE

Lesson Classroom
Lesson Topic Suggested activities
type resources

 The relationship objectives. researching

between business  Tutor presentation: Give a presentation on types of business individual
finance and the organisation, their features and characteristics, the concepts of businesses
characteristics of a limited and unlimited liability and their implications for business
business, its owners.
objectives and the
 Paired activity: In pairs, learners undertake research on different
stage in its
types of business to identify their different objectives.
development
 Class discussion: How do the objectives of a business change
 Types of business
over time as it grows and develops? What are the implications for
and the stages in
the level of business risks faced by businesses at different stages
their development,
in their development?
including start-up,
sole trader,  Plenary session: Recap the main learning points covered in the
partnerships, private lesson.
and public limited
companies
 Business objectives,
including expansion
and product
development
 Market development
and relocation

11–13 Topic A3: Business GS  Tutor-led discussion: Consider the relationship between business  Tutor
finance and types of finance and the characteristics of a business (e.g. its aims and presentation and
business objectives, stage of development). notes

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BTEC INTERNATIONAL BUSINESS
UNIT 3: BUSINESS FINANCE

Lesson Classroom
Lesson Topic Suggested activities
type resources

 The relationship  Group discussion: Give learners time to ask their pre-prepared  PCs, laptops or
between business questions. tablets with
finance and the internet
characteristics of a connection for
 Plenary session: Recap the main learning points covered in the
business, its research
lesson.
objectives and the Whiteboard
stage in its
development
14–16  Assignment 1 AW/IS  Tutor presentation: Distribute Assignment 1 and explain the  Assignment 1
requirements of each task. Respond to any queries raised by the
learners.
 Individual activity: Learners complete Assignment 1.
 Tutor feedback: Tutor provides feedback on the work produced
by the learners; identify good practice points and address any
issues that need to be addressed or learning points that need to
be reinforced.
 Tutor presentation: Review the main themes covered in learning
aim A and their inter-relationships.

Learning aim B: Understand how financial planning tools can be used to analyse financial data and assess business risks
17–20 Topic B1: Cash flow GW  Lead-in activity: Ask learners to draw up a list of a business’s  Tutor
forecasts and cash inflows and cash outflows. presentation and
statements  Tutor presentation: Go through the main components and notes
 Inflows/receipts: cash layout of a cash flow forecast – inflows, outflows, net cash flow,  PCs, laptops or a
sales; credit sales; opening balance and closing balance. Explain the difference tablet with
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Lesson Topic
loans; capital
introduced; sale of
assets; bank interest
received
 Outflows/payments:
cash purchases;
credit purchases;
rent; rates; salaries;
wages; utilities;
purchase of assets;
Value Added Tax
(VAT); bank interest
paid
 Prepare, complete,
analyse, revise and
evaluate cash flow
 Use of cash flow
forecasts for
planning, monitoring,
control, target setting
 Benefits and
limitations of cash
flow forecasts
21–24 Topic B2: Break-even
analysis
 Costs: variable; semi-
variable; fixed; total
Pearson BTEC International Level 3 Qualifications in Business – Scheme of Work
Issue 1 – February 2020 © Pearson Education Limited 2020
BTEC INTERNATIONAL BUSINESS
UNIT 3: BUSINESS FINANCE
Lesson Classroom
Suggested activities
type resources
between a cash flow forecast and a statement of cash flow. internet
 Tutor presentation: Go through the ways in which a business can connection
improve its cash flow position.  Whiteboard
 Individual activity: A case study which requires the learner to  Template of a
produce a commentary on a cash flow forecast of a sole trader, cash flow
identifying potential cash flow problems and how they may be forecast
addressed.  Case studies of
 Group discussion: On how businesses use cash flow forecasts for cash flow
planning and monitoring their activities and for setting targets. position
 Paired activity: Learners should consider the benefits and
limitations of cash flow forecasts.
 Group discussion: Ask learners to share their ideas from the
previous activity.
 Plenary session: Recap the main learning points covered in the
lesson.
GW  Tutor
 Paired activity: Learners identify the costs associated with the presentation and
manufacture of a simple object – for example, a wooden crate. notes
 Tutor-led discussion: Ask learners to classify the costs in terms of  PCs, laptops or a
tablet with
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BTEC INTERNATIONAL BUSINESS
UNIT 3: BUSINESS FINANCE

Lesson Classroom
Lesson Topic Suggested activities
type resources

 Sales: total revenue; their behaviour; determine fixed costs, variable costs, semi- internet
total sales; selling variable costs and total costs. connection
price per unit; sales in  Individual learner activity: Learners use a given set of data to  Whiteboard
value and/or units calculate fixed, variable, semi-variable and total costs.
 Calculation using/  Tutor presentation: Cover the calculation of total sales revenue
manipulating, break- based on selling price per unit, and the difference between sales
even formula (units value and sales volume.
and/or sales value),
 Individual learner activity: Use a given data set to calculate sales
completion of break-
revenue and sales volume.
even chart, break-
even point  Tutor presentation: Go through the main components of the
break-even chart and show the learners how to calculate total
 Identification of area
revenue, variable cost and fixed costs. Show the learners how to
of profit, area of loss
draw and fully label a break-even chart. Explain the concept of the
 Identify and calculate margin of safety.
margin of safety
 Individual activity: Learners prepare a break-even chart from a
(units and value)
given data set to determine the break-even point.
 Calculation of total
 Tutor presentation: Explain the application of the break-even
contribution,
formula, the importance of contribution and how contribution
contribution per unit
could impact on the choices available to businesses.
benefits and
limitations  Small group activity: Provide learners with some real or imagined
data for a range of businesses. Ask them to calculate total
 Use of break-even for
contribution and contribution per unit. Learners should consider
planning, monitoring,
the benefits and limitations of contribution calculations.
control, target setting
 Plenary session: Recap the main learning points covered in the
 Prepare, complete,
lesson.
analyse, revise and
evaluate break-even

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UNIT 3: BUSINESS FINANCE

Lesson Classroom
Lesson Topic Suggested activities
type resources
25–26 Topic B3: Business risks GS  Guest speaker: Enlist the help of a guest speaker (e.g. someone  Tutor
 Risks related to costs from a local business, preferably with an international presence) presentations
to explain financial risks using cash flow and break-even analysis. and notes
 Risks related to cash
inflows and revenue  Group discussion: Learners discuss findings from the speaker’s  Whiteboard
streams visit.  PCs, laptops or
 Paired activity: Learners research the importance of using cash tablets with
flow and break-even analysis, using a local business of their choice internet
as their case study. connection for
 Paired practical activity: Learners prepare and deliver a short research and
presentation, using slides and speaker notes to share their presentation
findings with the group. The slides and presentation should be of  Online articles or
a professional standard. case studies
 Tutor presentation: Review the main themes covered in learning about risks and
aim A and their inter-relationships. benefits of
enterprise and
innovation
Learning aim C: Understand how financial statements for a sole trader are prepared and used to analyse and evaluate
business performance
27–29 Topic C1: Statement of GW  Lead-in activity: A basic case study which requires the learners to  Tutor
comprehensive income calculate profit from sales revenue, cost of sales and a list of presentation and
 Purpose and use business expenses. notes

 Completion,  Tutor presentation: Explain the main components of the  Templates of

calculation and statement of comprehensive income, including its purpose and its statement of
amendment to use. comprehensive
include gross profit  Individual learner activity: Provide learners with a template of income
(revenue, opening the statement of comprehensive income on which they can record  PCs, laptops or
inventories, business data relating to sales and costs. tablets with

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BTEC INTERNATIONAL BUSINESS
UNIT 3: BUSINESS FINANCE
Lesson Topic
purchases, closing
inventories, cost of
goods sold), and
calculation of
profit/loss for the
year (expenses, other
income)
 Adjustments for
depreciation
(straight-line and
reducing balance)
 Adjustments for
prepayments,
accruals
 Interpretation,
analysis and
evaluation of
statements
30–31 Topic C2: Statement of
financial position
 Methods and
processes used to
prepare, complete,
revise and analyse a
statement of financial
position for a sole
trader
Pearson BTEC International Level 3 Qualifications in Business – Scheme of Work
Issue 1 – February 2020 © Pearson Education Limited 2020
Lesson Classroom
Suggested activities
type resources
 Tutor presentation: Explain the impact of adjustments on the internet
statement of comprehensive income (prepayments and accruals). connection
 Individual learner activity: Ask the learners to work through  Whiteboard
some prepayments and accrual adjustments calculations (give
them a worksheet).
 Tutor presentation: Cover the concept of depreciation, how it is
calculated and its impact on the statement of comprehensive
income.
 Individual learner activity: Ask learners to work through some
calculations using the two methods of depreciation (provide a
worksheet).
 Formative assessment: Learners prepare a statement of
comprehensive income for a sole trader, taking into account
prepayments, accruals and depreciation.
GW  Lead-in activity: Learners list the items that a business may own  Tutor
and those which it may owe. presentation and
 Tutor presentation: Explain the main components of a simple notes
statement of financial position, highlighting the difference  PCs, laptops or
between assets, equity (capital) and liabilities, including its tablets with
purpose and use. Give the learners a template of the statement of internet
financial position and go through how to complete one. connection
 Individual learner activity: Learners complete a simple template  Whiteboard
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 BTEC INTERNATIONAL BUSINESS
UNIT 3: BUSINESS FINANCE

Lesson Classroom
Lesson Topic Suggested activities
type resources

 Purpose and use of of the statement of financial position for a sole trader.  Template/
statement of financial  Tutor presentation: Explain the main components of current and examples of the
position non-current assets, current liabilities and non-current liabilities. statement of
 Completion, financial position
 Individual activity: Prepare a statement of financial position for a
calculation and sole trader that includes a full list of items, differentiated between
amendment of non-current and current assets, and current and non-current
statement using liabilities
vertical presentation,
 Plenary session: Confirm the main learning points of the lesson.
including:
o non-current assets
(tangible and
intangible, cost,
depreciation and
amortisation, net
book value)
o current assets
(inventories, trade
receivables,
prepayments,
bank, cash)
o current liabilities
(bank overdraft,
accruals, trade
payables)
o net current
assets/liabilities
o non-current
liabilities (bank
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UNIT 3: BUSINESS FINANCE

Lesson Classroom
Lesson Topic Suggested activities
type resources

loan and
mortgage)
o net assets
o capital (opening
capital, transfer of
profit or loss,
drawings, closing
capital)
 Adjustments for
straight line (cost x
%), depreciation,
reducing balance
(cost – depreciation
to date x %)
 Adjustments for
prepayments,
accruals
 Interpretation,
analysis and
evaluation of
statements
32–33 Topic C3: Measuring IS/GW  Lead-in activity: Hold a quiz to test knowledge of the terms used  Formulae to
performance using in the financial statements. calculate
financial ratios  Class discussion: Review the outcome of the private study profitability
 Calculation, exercise started at the end of the last lesson. Tutor confirms the  Practice
interpretation, answers. exercises and

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 BTEC INTERNATIONAL BUSINESS
UNIT 3: BUSINESS FINANCE

Lesson Classroom
Lesson Topic Suggested activities
type resources

analysis and  Tutor presentation: Introduce the concept of profit margins and case studies
evaluation of: the difference between profit and profitability. Explain the  Visit the
o gross profit purpose and usefulness of ratio analysis when analysing business ‘beta.tutor2u.net’
margin: (gross performance. Distinguish between gross profit margin and net website and
profit/ revenue) × profit margin, and how they are calculated. search for
100  Individual learner activity: Learners calculate gross and net ‘business/topics/r
profit margins from a given set of data. atio-analysis’.
o mark-up: (gross  Class discussion: Encourage learners to think of the different
profit/cost of sales) ways that a business could improve its profitability, and how this
× 100 may impact on the success of the business.
o profit margin:  Formative Assessment: Learners calculate gross profit margin
(profit/revenue) × and net profit margin, and analyse the implications for a sole
100 trader seeking to improve profit margins.
o return on capital  Tutor presentation: Explain the concept of the rate of return and
employed (ROCE): how it is calculated.
(profit/capital
 Individual learner activity: Learners calculate ROCE from given
employed) × 100
data.
 Plenary session: Confirm the main learning points of the lesson.
34–35 Topic C3 Measuring IS/GW  Lead-in: Recap the calculations involving gross and net profit  Formulae for
performance using margins and hold a Q&A session on the usefulness of financial liquidity and
financial ratios ratios. practice case
 Calculation,  Tutor presentation: Introduce the concept of liquidity and how it study material
interpretation, is measured, with reference to the statement of financial position.
analysis and  Individual learner activity: Use the previously prepared financial
evaluation of: statements to calculate net current assets (working capital).
o current ratio:  Tutor presentation: Explain how to calculate liquidity ratios and
current
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BTEC INTERNATIONAL BUSINESS
UNIT 3: BUSINESS FINANCE

Lesson Classroom
Lesson Topic Suggested activities
type resources

assets/current their interpretation.

liabilities  Individual learner activity: Learners calculate liquidity ratios
o liquid capital ratio: from a set of given data.
(current assets –  Class discussion: Get the learners to think of the different ways
inventory)/current that a business could improve its liquidity, and how this may
liabilities impact on the success of the business.

 Individual work: Learners complete case studies to calculate

liquidity ratio and analyse the impact on the business.
 Plenary session: Confirm the main learning points of the lesson.
36–37 Topic C3: Measuring GS/GW  Lead-in: Recap the calculations involving liquidity ratios.  Tutor
performance using  Tutor presentation: Introduce the concept of efficiency and the presentation and
financial ratios implications for business. notes
 Calculation,  Individual learner activity: A case study of poor business  Whiteboard
interpretation, practices relating to inventory management and credit control.  Formula for
analysis and efficiency/case
 Class discussion: Suggestions regarding how business efficiency
evaluation of: studies and
can be improved.
o trade receivable examples for
 Tutor presentation: Explain how to calculate efficiency ratios and
days: (trade learners to
their interpretation.
receivable/credit practise and
sales) × 365  Individual learner activity: Learners calculate efficiency ratios refer to
from a set of given data.
o trade payable
days: (trade  Individual work: Learners complete case studies to calculate
payables/credit efficiency ratios and analyse the impact on the business.
purchases) × 365  Guest speaker: Enlist the help of a guest speaker (e.g. someone
o inventory turnover: from a local business, preferably with an international presence)

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 BTEC INTERNATIONAL BUSINESS
UNIT 3: BUSINESS FINANCE

Lesson Classroom
Lesson Topic Suggested activities
type resources

(average to explain link the comprehensive income statement and the

inventory/cost of financial position statement with the ratio analysis.
sales) × 365  Plenary session: Confirm the main learning points of the lesson.

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BTEC INTERNATIONAL BUSINESS
UNIT 3: BUSINESS FINANCE

Lesson Classroom
Lesson Topic Suggested activities
type resources
38–39 Topic C4: Preparation of GW  Tutor presentation: On the use of software (e.g. PowerPoint) to  Tutor
financial performance produce a presentation. Feedback should include a combination presentation and
reports of peer-to-peer and tutor feedback. notes
 Format, layout: title &  Tutor presentation: On the use of software to generate a
details of report, business report, including software packages for production and
introduction, manipulation of financial information, graphs (e.g. Excel) and ‘what
calculations, risks, if’ scenarios.
analysis of  Assignment writing/tutor-led practical demonstration: Give
performance, clear assessment feedback on completed formative assessments.
conclusions, Highlight areas where individual learners’ knowledge needs
recommendations further development and give overall class feedback on areas of
 Appropriate software weakness.
for the production of
a formal business
report/executive
summary
 Appropriate software
for the production of
a presentation
 Programmes/
software packages for
production and
manipulation of
financial information,
generation of graphs
and ‘what if’ scenarios

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 BTEC INTERNATIONAL BUSINESS
UNIT 3: BUSINESS FINANCE

Lesson Classroom
Lesson Topic Suggested activities
type resources
40–43  Assignment 2 AW  Tutor presentation: Distribute Assignment 2 and explain the  Assignment 2
requirements of each task. Respond to any queries raised by the
learners.
 Individual activity: Learners complete Assignment 2.
 Tutor presentation: Review the main themes covered in learning
aims B and C and their inter-relationships.
44–45  Feedback and RS  Tutor feedback: Tutor provides feedback on the work produced
course review by the learners; identify good practice points and address any
issues or learning points that need to be reinforced.
 Tutor presentation: Tutor presents the correct responses to the
tasks set in the assignment.
 Class discussion: Learners raise any issues on the course that
they found difficult to understand; tutor sets remedial exercises to
reinforce knowledge and understanding.
 Quiz: A knowledge-based quiz testing the understanding of the
course content.
 Tutor presentation: How the unit links with other units on the
programme.

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