Exercise & Practice Tool

Skill: Core concepts~5 minDiscussion

In one sentence each, define "input", "process" and "output" as used in a business. Then give one example of each for a small bakery.

Common mistake: Calling money an "output" — revenue is a result of selling the output, not the output itself.

Self-check: Can I point to one thing that enters and one thing that leaves my example?

Skill: Purpose~10 minLow-resourceDiscussion

On the board or in your notebook, write a one-line purpose statement for each: a repair workshop, a community training center, and a vegetable farm. Read them aloud and explain who each one serves.

Common mistake: Listing activities ("we fix things, we sell things") instead of stating the purpose and who benefits.

Self-check: Does my sentence name both what is delivered and who receives it?

Skill: Value creation~10 minCalculation

A juice stall buys fruit and packaging for 1,200 Credits, then sells the finished juice for 3,500 Credits in a day. Calculate the value added by the stall's process. Then state in one sentence what "value added" means.

Common mistake: Subtracting wages and rent here — those are part of how the value added is shared, not part of the bought-in input figure.

Self-check: Did I subtract only the bought-in materials from the sale value?

Portfolio: Keep your worked calculation as your first "value added" worked example.

Skill: Transformation~15 minPortfolio

Choose a small food-processing business (e.g. a peanut-roasting shop). Build a three-column table listing at least three inputs, the main process step they feed, and the resulting output. Add a final row stating the single most important output.

Common mistake: Mixing functions (e.g. "marketing") into the process column — keep this to the physical transformation steps.

Self-check: Does every row trace one input through to an output?

Portfolio: Save the completed table as evidence of mapping a transformation process.

Skill: Function types~5 minDiscussion

For each function below, label it Core (C), Support (S) or Cross-cutting (X): (a) Production, (b) Accounting, (c) Quality, (d) Sales, (e) Human resources, (f) Information/IT.

Common mistake: Marking accounting as "core" because it handles money — it supports the value-creating functions rather than producing the output.

Self-check: Does this function directly make or sell the output, or does it help others do so?

Skill: Functions~10 minLow-resourceDiscussion

Working in pairs with no materials, one learner names an everyday activity from a restaurant (e.g. "cooking the meal", "paying the supplier", "hiring a waiter", "advertising the menu") and the partner says aloud which function it belongs to. Swap after five activities.

Common mistake: Putting every money-related activity under "accounting" — buying ingredients is purchasing, even though money moves.

Self-check: Could I explain in one sentence why the activity sits in that function?

Skill: Classification~15 minDiscussion

A small minibus transport company has these activities: driving passengers, selling tickets, servicing vehicles, keeping the cash book, training drivers, and checking safety standards. Sort all six into Core, Support and Cross-cutting, and justify any you found difficult in one sentence.

Common mistake: Treating "training drivers" as core because drivers deliver the service — training is an HR support activity.

Self-check: Have I justified every borderline case?

Skill: Hand-offs~5 minDiscussion

Fill in the blanks: "An internal customer is the next ______ or ______ that receives your work inside the same organisation. A hand-off is the moment work ______ from one function to the next."

Common mistake: Thinking "customer" always means the person who pays — internal customers do not pay you but depend on your output.

Self-check: Can I name who receives my work next?

Skill: Risk spotting~15 minPortfolio

In a tailoring workshop, the order desk takes measurements and passes them to the cutting table, which passes cut pieces to the sewing team. List two things that could go wrong at each hand-off (four risks total) and suggest one simple control for each.

Common mistake: Suggesting controls that do not match the risk (e.g. "work faster" for a mislabelling problem).

Self-check: Does each control actually prevent or catch the risk I named?

Portfolio: Keep your risk-and-control list as a sample hand-off review.

Skill: Diagnosis & recommendation~30 minAssessment-style

A busy local restaurant keeps getting complaints. Waiters take orders on scraps of paper; the kitchen often cooks the wrong dish or misses items; finished plates sit because no one tells the waiter they are ready; and at closing the cash counted never matches the order slips. Diagnose where the hand-offs break, explain the effect of each break on the internal customer and the paying customer, and recommend a connected set of fixes. State any assumptions.

Common mistake: Listing fixes ("buy a computer") without first diagnosing which hand-off each fix repairs.

Self-check: Have I linked every recommendation back to a specific broken hand-off?

Portfolio: Keep your diagnosis-and-fix write-up as an assessment-style work sample.

Skill: Diagnosis~25 minLow-resourceDiscussion

With no materials, in a group of three, talk through a motorcycle repair workshop where the front desk, the mechanics, and the parts store keep blaming each other for delays. Out loud, agree (1) the three hand-offs in the chain, (2) the most likely break, and (3) one fix each group member commits to defending. One person summarises the group's conclusion to the class.

Common mistake: Settling on "people should communicate better" instead of naming a concrete record or signal.

Self-check: Did we agree a fix that creates a shared record, not just goodwill?

Skill: Mapping~5 minDiscussion

Mark each statement True or False: (a) A function map shows who does what work in an organisation. (b) In a tiny business, one person can hold several functions. (c) An NGO has no core function because it does not sell goods. (d) Support functions can be shared across several core functions.

Common mistake: Assuming "core function" requires selling a product, which wrongly excludes NGOs and public offices.

Self-check: Can I name the core function even when nothing is sold?

Skill: Mapping~20 minPortfolio

Map a small grocery shop with four staff. Produce a simple table listing each function (core or support), one main activity it performs, and which person (Owner, Cashier, Stock-keeper, Helper) is responsible. Show clearly where one person holds more than one function.

Common mistake: Leaving a core function unassigned because the team is small — every core function still needs an owner, even a shared one.

Self-check: Is every core function assigned to a named person?

Portfolio: Keep your function map as evidence you can map a real small enterprise.

Skill: Value creation~15 minCalculation

A community training center runs a course. It pays an external trainer 4,000 Credits and buys learning materials for 1,500 Credits. It collects 9,000 Credits in course fees. Calculate the value added by the center's own functions (enrolment, scheduling, premises), and explain in one sentence which functions created that added value.

Common mistake: Subtracting only the largest cost and ignoring smaller bought-in inputs.

Self-check: Did I add up every bought-in input before subtracting?

Skill: Mapping & analysis~30 minAssessment-style

A small NGO distributes school supplies to rural schools. It receives donations, buys supplies in bulk, stores them, plans delivery routes, delivers to schools, and reports back to donors. Build a function map (core, support, cross-cutting), identify the two hand-offs most likely to fail, and recommend how mapping the functions helps the NGO use its donated Credits well. State assumptions.

Common mistake: Treating the NGO as having "no core function" because it does not sell — its core is delivering supplies to schools.

Self-check: Does my map name a tracking/reporting function and link it to every step?

Portfolio: Keep your NGO function map and analysis as an assessment-style work sample.

Skill: Integrated analysis~35 minCalculationAssessment-style

A small vegetable farm buys seed and fertiliser for 6,000 Credits and pays a packing service 2,000 Credits. It sells its harvest for 15,000 Credits. (1) Calculate the value added. (2) Map the farm's core, support and cross-cutting functions. (3) The packing service often returns vegetables late, so some spoil before sale — identify this hand-off failure, estimate its effect if 10% of the sale value is lost, and recommend a fix. State assumptions.

Common mistake: Calculating the 10% loss on value added (700 Credits) instead of on the stated sale value (1,500 Credits).

Self-check: Did I subtract every input, and base the 10% on the sale value?

Portfolio: Keep this integrated calculation, map and recommendation as a capstone work sample for Chapter 1.

Skill: functions & hand-offs~25 minDiscussionPortfolio

A small community bakery has four people: an owner (management), one who buys flour and fuel (procurement), one who bakes (production) and one who sells at the counter (sales). To win a new customer, the seller promised 200 loaves for tomorrow morning. The baker was never told, and there is only enough flour for 120 loaves. (a) Draw the functions and the hand-offs between them. (b) Identify exactly where the hand-off failed and who the internal customers are. (c) Recommend two changes so this does not happen again. (d) If each loaf sells for 8 Credits and the bought-in materials per loaf are 3 Credits, calculate the value added on a complete 200-loaf order.

Common mistake: blaming one person instead of fixing the information hand-off between functions.

Self-check: Can I point to the exact hand-off that failed and name both internal customers?

Portfolio: keep your function-and-hand-off diagram with the value-added calculation.

Skill: Definitions~6 min

Write a one-sentence definition for each: (a) business idea, (b) business opportunity, (c) business model.

Common mistake: Treating "idea" and "opportunity" as the same thing — a clever idea with no buyers is still only an idea.

Self-check: Could I explain each term to a friend without using the other two words?

Skill: Classifying~8 minDiscussionLow-resource

On the board, the instructor reads five statements (e.g. "I could bake bread", "Three shops nearby already pay a supplier weekly for bread but want fresher loaves"). For each, say aloud whether it is just an IDEA or a real OPPORTUNITY, and why. No writing needed.

Common mistake: Calling something an opportunity because the speaker is enthusiastic, rather than because buyers are identified.

Self-check: For each "opportunity", can I point to who pays?

Skill: Opportunity test~12 minPortfolio

Take one idea from your own context (a shop, farm, repair workshop, food stall, or training service). In a short paragraph, show what would have to be true for it to become a real opportunity: who pays, roughly how many such buyers exist nearby, and one piece of evidence you could collect this week to test the demand.

Common mistake: Describing the product in more detail instead of describing the buyer and the test.

Self-check: Have I named a buyer and a test I could actually run this week?

Portfolio: Keep this opportunity test; you will reuse the buyer group in Module 2.2.

Skill: Model design~20 minDiscussion

A training center has the idea "teach basic bookkeeping". Design TWO different business models for the same idea (for example: scheduled group classes vs. pay-per-session on-site coaching for shops). For each model, state who pays, how revenue is earned, the main cost driver, and one risk. Then recommend which model you would start with and why.

Common mistake: Producing two descriptions of the same model with only the price changed, rather than two genuinely different ways of earning.

Self-check: Do my two models really differ in HOW money is earned, not just in price?

Skill: Matching~6 min

Match each value proposition (1–3) to the customer segment it best fits (A–C). 1) "Hot meals delivered in 15 minutes" 2) "Lowest bulk price for weekly stock" 3) "Repairs done while you wait". Segments: A) a small shop restocking, B) busy office workers at lunch, C) a commuter with a broken phone.

Common mistake: Matching by product type instead of by the benefit the segment values.

Self-check: Did I match on the benefit, not just the product?

Skill: Identifying demand~5 minLow-resource

In your notebook, write one enterprise you know and then answer in one line each: Who actually pays? Who uses it (if different)? What do they pay for? Board/notebook only.

Common mistake: Assuming the user and the payer are always the same person.

Self-check: Have I separated who pays from who uses?

Skill: Value proposition~12 minPortfolio

Using the buyer group from your Module 2.1 opportunity test, write one value proposition in this shape: "For [segment] who [need], we offer [product/service] that [main benefit], unlike [the usual alternative]." Then list two reasons this segment would choose you over the alternative.

Common mistake: Leaving out the "unlike" clause, so the benefit floats with nothing to compare against.

Self-check: Does my statement name a real alternative the customer has today?

Portfolio: Keep this value proposition next to your opportunity test.

Skill: Business model canvas~22 minPortfolio

For a small enterprise of your choice, complete a six-box mini model in a table: (1) Customer segment, (2) Value proposition, (3) Channels (how you reach them), (4) Revenue (how you earn), (5) Key costs, (6) Key activities. Make the boxes consistent — the value proposition must serve the named segment, and the revenue must come from that segment. Then write two sentences on the weakest box and how you would test it.

Common mistake: Filling boxes that contradict each other — e.g. a premium value proposition with a segment that cannot pay for it.

Self-check: Does every box point at the same customer?

Portfolio: Keep the completed mini model as a one-page summary of your enterprise.

Skill: Cost types~6 min

Label each cost as FIXED or VARIABLE: (a) monthly rent, (b) flour used per loaf, (c) a fixed monthly internet fee, (d) packaging per item sold, (e) the owner's fixed monthly salary.

Common mistake: Calling rent variable because the amount feels large — size does not decide the type; behaviour with output does.

Self-check: If I sold zero units this month, would this cost still appear?

Skill: Formula recall~5 min

Write the formula for (a) contribution per unit and (b) the break-even quantity in units.

Common mistake: Dividing fixed costs by the price instead of by the contribution per unit.

Self-check: Did I use contribution — not price — in the break-even denominator?

Skill: Break-even~12 minCalculation

An enterprise has fixed costs of 12,000 Credits per month. Each unit sells for 20 Credits and costs 8 Credits in variable cost. Calculate (a) the contribution per unit and (b) the break-even quantity in units per month.

Common mistake: Using the selling price of 20 as the denominator instead of the contribution of 12.

Self-check: At 1,000 units, does total contribution (1,000 × 12) equal the fixed cost?

Skill: Mental calculation~10 minCalculationLow-resource

No calculator. Using the same figures (fixed 12,000 Credits, price 20, variable 8), work on the board: if the enterprise sells 1,500 units in a month, what is the monthly profit? Show your steps aloud.

Common mistake: Subtracting fixed costs from revenue but forgetting to first remove the variable costs.

Self-check: Since 1,500 is above the 1,000 break-even, is my profit positive?

Skill: Break-even analysis~22 minCalculation

Start from fixed 12,000 Credits, price 20, variable 8. A supplier raises the variable cost to 10 Credits per unit. (a) Recalculate contribution and break-even. (b) The owner wants a monthly profit of 6,000 Credits at the new variable cost — how many units must be sold? (c) The owner could instead raise the price to 22 to protect contribution; discuss one benefit and one risk of doing so, and give a reasoned recommendation.

Common mistake: Forgetting to add the target profit to fixed costs before dividing, which understates the units needed.

Self-check: Did my break-even rise when contribution fell, as it should?

Skill: True/false~5 min

Mark each statement TRUE or FALSE: (a) A profitable enterprise always has cash in hand. (b) A sale made on credit counts toward profit before the cash arrives. (c) Buying stock uses cash even if it has not yet been sold.

Common mistake: Believing a profit figure guarantees money in the account today.

Self-check: Can I name one way profit and cash can move at different times?

Skill: Profit vs cash~12 minCalculation

An enterprise sells 100 units this month at 20 Credits each, but customers pay next month. Variable cost is 8 Credits per unit, paid now in cash; fixed costs of 600 Credits are also paid now. Build a small two-column table showing PROFIT this month and CASH this month, and write one sentence explaining the difference.

Common mistake: Recording the credit sales as cash received in the same month they were made.

Self-check: Does my cash column include only money that actually moved this month?

Skill: Risk identification~10 minDiscussionLow-resource

As a group, list on the board at least five common start-up risks for a small enterprise (e.g. a food stall or repair shop). For each, say in one phrase how the owner could reduce it. Oral and board only.

Common mistake: Listing only "not enough customers" and stopping there, ignoring cash, supply, and people risks.

Self-check: Does each risk on our list have a realistic action next to it?

Skill: Cash flow diagnosis~25 minPortfolio

A small food-processing enterprise reports a healthy monthly profit of 4,000 Credits and orders are growing. Yet it cannot pay this week's supplier bill of 3,000 Credits and the owner is alarmed. Known facts: large customers pay 30–45 days after delivery; the enterprise pays suppliers and wages within 7 days; to win bigger orders it bought extra stock and raw materials last month. (a) Explain why a profitable enterprise can still face a cash crisis. (b) Diagnose the three specific causes here. (c) Recommend three concrete actions to fix the cash position without harming the business, and note one trade-off of your plan.

Common mistake: Concluding the enterprise is unprofitable or badly run, when the real issue is purely the timing of cash in versus cash out.

Self-check: Did I explain the crisis through timing rather than through profit being wrong?

Portfolio: Keep your diagnosis and three-action plan as a worked example of managing a cash gap.

Skill: model, contribution & break-even~30 minCalculation

A learner can start only one small business. Idea A — a phone-repair stall: price 60 Credits per repair, variable cost 25 Credits, monthly fixed costs 3,500 Credits. Idea B — a snack stall: price 5 Credits per item, variable cost 3 Credits, monthly fixed costs 1,800 Credits. (a) Calculate the contribution per unit and the monthly break-even quantity for each. (b) If the repair stall can realistically do 120 repairs a month and the snack stall can sell 1,200 items a month, what monthly profit does each make at that level? (c) Recommend one idea, considering profit, how hard the break-even is to reach, and cash risk. State one assumption you would test first.

Common mistake: picking the idea with the higher price without checking how hard its break-even is to reach.

Self-check: Did I compare break-even difficulty, not just profit?

Portfolio: keep both break-even calculations and your written recommendation.

Skill: Distinguish roles~5 minDiscussion

In your own words, define "ownership" and "management" of a business, and give one sentence explaining how the two can be held by different people.

Common mistake: Assuming the person in charge each day must also be the owner.

Self-check: Can I name a case where the owner and the manager are different people?

Skill: Define liability~5 minLow-resource

On the board or in your notebook, write one sentence each defining "limited liability" and "unlimited liability". Then mark which one puts the owner's private home at risk.

Common mistake: Swapping the two terms, or thinking "limited" means the business can borrow only a limited amount.

Self-check: Under which type can creditors reach my personal savings?

Skill: Apply ownership concepts~10 minDiscussion

A training center is owned by three founders but run day-to-day by a hired director. A supplier is owed 8,000 Credits and the business cannot pay. Explain (a) who decides whether to take a new loan, and (b) whose money is ultimately at risk, assuming the center is a form with limited liability.

Common mistake: Treating the hired manager as personally liable for ordinary business debts.

Self-check: Did I keep "who decides" separate from "whose money is at risk"?

Skill: Reason about structure~20 minDiscussionPortfolio

A community bakery wants outside investors to put in money but does not want those investors making daily decisions, and the founders want to protect their private assets. Recommend how ownership, management and liability could be arranged, name the trade-offs, and state what must be confirmed locally.

Common mistake: Recommending a form that protects assets but forgetting investors will still want some governance rights.

Self-check: Does my structure let money in without handing over daily control, and does it protect private assets?

Portfolio: Keep your one-page recommendation with the ownership/management/liability split labelled.

Skill: Identify forms~6 min

Match each form (1 sole owner, 2 partnership, 3 limited company, 4 cooperative, 5 joint venture, 6 non-profit) to a description: (A) two firms team up for one project; (B) members jointly own and run it, sharing benefits; (C) one person owns and runs everything; (D) owners hold shares and liability is limited; (E) surplus is reinvested in a mission, not paid to owners; (F) two or more people own and run it together.

Common mistake: Confusing partnership (F) with cooperative (B) — a cooperative is member-based with shared benefits, often one-member-one-vote.

Self-check: Could I explain each match in one short sentence?

Skill: Recall features~5 minLow-resource

Read each statement aloud or in your notebook and mark True or False: (a) A sole owner usually has unlimited liability. (b) A non-profit distributes its surplus to owners. (c) A cooperative is owned by its members. (d) A limited company can have owners who do not manage it.

Common mistake: Marking (b) True because the organization can still earn a surplus — earning is allowed, distributing to owners is not.

Self-check: Do I know where a non-profit's surplus goes?

Skill: Classify forms~12 min

Classify each into the most likely generic form and give a one-line reason: (1) a single tailor working alone; (2) two mechanics who jointly own a repair workshop; (3) 40 farmers who pooled resources to buy a shared mill and vote one-member-one-vote; (4) a school run for a mission, surplus reinvested; (5) two transport firms that combined trucks for a single six-month contract.

Common mistake: Labelling a many-member, one-vote-each group as a partnership.

Self-check: Did my reason mention owners, profit or duration?

Portfolio: Keep your classification table as evidence of form-recognition skill.

Skill: Compare liability~12 minCalculation

A small food-processing business owes 30,000 Credits it cannot pay. The owner invested 10,000 Credits. Build a mini table showing, for (a) sole owner with unlimited liability, (b) general partner, and (c) shareholder in a limited company, how much of the owner's private assets is exposed beyond the 10,000 Credits invested.

Common mistake: Forgetting that partners can be liable jointly, so one partner may be pursued for the whole amount.

Self-check: For each form, did I separate "money already invested" from "extra private exposure"?

Skill: Recommend a form~25 minDiscussionPortfolio

Twelve smallholder farmers want to jointly buy a shared processing mill, sell together to get better prices, and keep decisions fair so no single farmer dominates. They worry about protecting their farms if the venture takes on debt. Recommend a generic form, justify it against their goals, note risks, and list what they must confirm locally.

Common mistake: Recommending a share-based company without noting it lets a big shareholder dominate, which breaks the fairness goal.

Self-check: Does my form deliver both fair voting and farm protection?

Portfolio: Keep your recommendation memo, including the fairness and liability points.

Skill: Reason & argue~20 minDiscussionLow-resourceInstructor-assigned

No materials except speaking. A family restaurant is currently a sole owner business run by a parent. Two adult children will join. In pairs, argue out loud whether to stay a sole owner, become a partnership, or form a limited company, considering control, liability and bringing in the children fairly. Then present your group's recommendation to the class.

Common mistake: Keeping the sole-owner form while claiming all three are "co-owners" — a sole-owner form has exactly one owner.

Self-check: Did our argument cover control, liability and fairness for all three?

Skill: Define informality~5 min

Define an "informal" (unregistered) business in one sentence, and list two risks of operating informally.

Common mistake: Thinking informal just means "small" — size and registration are different things.

Self-check: Could I name two concrete disadvantages of staying unregistered?

Skill: Plan registration check~10 minPortfolio

An informal street-food vendor wants to formalise. Write a checklist of at least five questions they must confirm with a local authority or adviser before choosing and registering a form.

Common mistake: Giving generic answers instead of questions the vendor can actually take to a local office.

Self-check: Is every item phrased as a question I could ask an official?

Portfolio: Keep your local-law checklist; reuse it whenever you advise a business on formalising.

Skill: Calculate exposure~12 minCalculation

An informal repair workshop run by one person has business equipment worth 6,000 Credits but owes a supplier 15,000 Credits after a bad season. Calculate how much must come from the owner's private assets, and explain how registering a limited-liability form could have changed the outcome.

Common mistake: Forgetting to subtract the value of business assets before charging the rest to private wealth.

Self-check: Did I use business assets first, then put only the remainder on private assets?

Skill: Recall criteria~5 min

Fill in the blanks. When choosing a form, the main factors are: number of ______; how much ______ protection is wanted (limited vs unlimited liability); how ______ should be shared among owners; the ______ and ongoing duties of setting it up; and whether the business has a ______ rather than profit aim.

Common mistake: Naming only liability and forgetting control and cost also matter.

Self-check: Can I recall all five factors without looking?

Skill: Recommend a form~12 minLow-resourceDiscussion

Using only the board or your notebook, recommend a generic form for one person opening a small shop alone with little money, who wants the simplest possible start but is aware of liability. Give two reasons and one caution.

Common mistake: Ignoring the liability caution when recommending the simplest form.

Self-check: Did I give the simplest form and still warn about liability?

Skill: Full recommendation~25 minDiscussionPortfolioInstructor-assigned

An informal repair workshop, owned and run by one person, has grown. An outside investor will put in 40,000 Credits in exchange for a stake, but wants the business formal, with clear ownership records and protected private assets. The current owner wants to keep day-to-day control. Recommend how to formalise: which form, how ownership and management are arranged, how liability is handled, and what to confirm locally. Then state the private-asset exposure if the formalised business later owes 50,000 Credits with 20,000 Credits of business assets.

Common mistake: Saying the owner still loses 30,000 Credits privately after forming a limited-liability company.

Self-check: Does my structure give the investor a recorded stake, keep founder control, and show 0 private exposure under limited liability?

Portfolio: Keep your formalisation plan and the exposure calculation as an assessment-style work sample.

Skill: form choice & liability~25 minDiscussion

Three drivers want to run a shared transport service. They will pool three vehicles and split income. One driver owns a house and is worried about losing it if the business cannot pay a debt. They cannot agree who makes decisions. Using only generic categories (sole-owner, partnership, limited liability company, cooperative, joint venture): (a) explain how ownership and management could be separated; (b) explain the liability difference between an informal partnership and a limited liability company for the house-owning driver; (c) recommend a generic form and justify it; (d) list three questions they must confirm under their own local rules before deciding.

Common mistake: assuming a company name automatically protects private assets in every situation — always confirm local rules.

Self-check: Did I keep it generic and tell them to confirm local rules?

Portfolio: keep your recommendation and the local-law question list.

Skill: Vocabulary~5 minDiscussion

In one short sentence each, define "asset", "liability" and "equity" as they are used in accounting.

Common mistake: Calling a bank loan an "asset" because it brings in money — a loan that must be repaid is a liability.

Self-check: Can I give a fresh example of each from a shop I know?

Skill: Classifying~10 minLow-resource

On the board or in your notebook, write three columns: Asset, Liability, Equity. Place each item in the correct column: (1) Delivery van, (2) Cash in the till, (3) Money owed to a flour supplier, (4) Owner's capital invested at start, (5) Bank loan still to repay, (6) Stock of spare parts, (7) Amount a customer still owes you, (8) Retained profit kept in the business.

Common mistake: Putting "amount a customer owes you" under liabilities — money coming to you is an asset (a receivable), not a debt you carry.

Self-check: Did I keep receivables (owed to me) apart from payables (owed by me)?

Skill: Classifying~15 minCalculation

A repair workshop lists: tools 4,000 Credits; cash 1,200 Credits; stock of parts 1,800 Credits; supplier debt 1,500 Credits; bank loan 2,500 Credits. Sort these into assets and liabilities, total each, then state the equity figure using equity = assets − liabilities.

Common mistake: Adding liabilities to assets; liabilities reduce the owner's share, they do not add to it.

Self-check: Does my equity figure equal assets minus liabilities exactly?

Skill: Judgement~25 minDiscussionPortfolio

A community training centre hands you an unsorted list: building 30,000 Credits; cash 800 Credits; unpaid electricity bill 400 Credits; minibus bought on a 3-year loan, loan balance 9,000 Credits, minibus value 12,000 Credits; fees students still owe 2,200 Credits; a grant received in advance for next term 3,000 Credits (service not yet delivered); owner's capital. Build a clean classification (assets / liabilities / equity), explain any item that is tricky, and compute equity. Treat the grant received in advance as a liability and explain why.

Common mistake: Netting the minibus against its loan into one line, or counting the advance grant as income already earned.

Self-check: Have I shown each asset and its related debt as separate lines?

Portfolio: Keep your sorted table and the short note explaining the grant and the minibus.

Skill: Formula recall~3 min

Write the accounting equation in full, then write the version that solves for equity.

Common mistake: Writing Assets + Liabilities = Equity, which mixes up the sides.

Self-check: Does my equation balance for a worked example I already know?

Skill: Equation~8 minCalculationLow-resource

Using only the board or your notebook, fill in the missing figure in each line so the equation Assets = Liabilities + Equity holds: (a) 10,000 = 3,000 + ___ ; (b) ___ = 5,000 + 9,000 ; (c) 18,000 = ___ + 11,000 ; (d) 6,500 = 2,000 + ___.

Common mistake: Adding when you should subtract in (a), (c) and (d).

Self-check: If I add my right-hand figures, do I get the left-hand figure?

Skill: Equation~15 minCalculation

A small bakery starts with Assets 10,000, Liabilities 3,000, Equity 7,000 Credits. Show the new totals after each separate event (each starts from the original figures): (1) buys an oven for 2,000 cash; (2) takes a bank loan of 4,000 cash; (3) the owner withdraws 1,000 cash for personal use. State whether the equation still balances each time.

Common mistake: Recording an owner's drawing as an expense instead of a reduction in equity.

Self-check: After each event, do both sides still total the same?

Skill: Balance sheet~20 minCalculationPortfolio

From these figures for a small grocery, build a simple balance sheet with an Assets section, a Liabilities section, and an Equity line, and show that the two sides balance: equipment 5,000; stock 3,500; cash 1,500; receivables 1,000; supplier payables 2,000; bank loan 3,000; owner's equity to be found.

Common mistake: Leaving the two totals unequal and not checking the balance before finishing.

Self-check: Do my two column totals match exactly?

Portfolio: Keep the finished balance sheet as a worked sample.

Skill: Reasoning~25 minLow-resourceDiscussion

Using only the board or notebook, reconstruct a transport business's balance sheet from these clues and state every figure: total assets are 40,000 Credits; the bank loan is twice the supplier payables; supplier payables are 4,000 Credits; the only other liability is wages owed of 1,000 Credits; equity is the balancing figure. Then explain in two sentences what the equity figure tells the owner.

Common mistake: Forgetting the wages owed of 1,000 and so overstating equity by 1,000.

Self-check: Did I include every liability before subtracting?

Skill: Concepts~6 min

Mark each statement true or false: (1) Revenue is recorded only when cash is received. (2) A sale on credit creates revenue now and a receivable. (3) Receiving a customer's cash always increases revenue. (4) An expense can be recorded before it is paid.

Common mistake: Counting cash collected from last month's sale as new revenue this month.

Self-check: Can I name the moment revenue is earned, separate from when cash arrives?

Skill: Distinguishing~15 minCalculation

In June a tailoring shop: delivers orders worth 9,000 Credits, of which 6,000 is paid in cash and 3,000 is on credit; also collects 2,000 Credits cash from May's credit sales. Calculate (a) June revenue and (b) June cash received from customers, and explain why they differ.

Common mistake: Adding the 2,000 from May into June revenue — it was earned in May.

Self-check: Did I base revenue on delivery and cash on money received?

Skill: Distinguishing~15 minCalculation

In one month a food stall: uses 4,000 Credits of ingredients (3,000 paid in cash, 1,000 still owed to the supplier); pays 1,500 Credits cash for last month's gas bill; pays 2,000 Credits cash rent for this month. Calculate (a) this month's expenses and (b) this month's cash paid, and explain the gap.

Common mistake: Treating the gas payment as this month's expense — it belongs to the month the gas was used.

Self-check: Did I match each cost to the month it was used, not paid?

Skill: Interpretation~25 minDiscussionPortfolio

A furniture workshop reports a healthy profit of 8,000 Credits for the quarter, yet its cash balance fell over the same quarter. From the records: revenue 40,000 (of which 15,000 is still unpaid by customers); expenses 32,000 (of which only 2,000 is still unpaid to suppliers); the owner also repaid 6,000 of a loan and bought a 5,000 machine, both in cash. Explain in a reasoned answer how profit can be positive while cash falls, and recommend two practical steps the owner could take.

Common mistake: Treating the loan repayment or the machine purchase as expenses that reduce profit.

Self-check: Have I shown clearly which items hit profit, which hit cash, and which hit both?

Portfolio: Keep your written explanation and recommendations as an assessment-style sample.

Skill: Vocabulary~5 min

Fill the gaps: A ______ is a physical count of goods on hand. Goods held for sale or use are called ______. When the counted quantity is less than the records show, the difference is a stock ______.

Common mistake: Confusing inventory (the goods) with the stocktake (the act of counting them).

Self-check: Can I say each term in my own words?

Skill: Stocktake~12 minCalculation

A hardware shop's records show 500 units of a part valued at 20 Credits each. A stocktake counts only 480 units. Calculate (a) the recorded value, (b) the counted value, and (c) the value of the stock difference, and say which way the records must be adjusted.

Common mistake: Reporting the counted value as the loss instead of the gap between recorded and counted.

Self-check: Is my loss figure the difference between two values, not one of them?

Skill: Assessment~30 minDiscussionPortfolioInstructor-assigned

A farm-supply business worries it is "going broke": its cash balance is only 600 Credits and it struggles to pay this week's wages. Yet its records show: inventory (seed, feed, tools) 22,000 Credits; a delivery truck 14,000 Credits; receivables from farmers 9,000 Credits; supplier payables 4,000 Credits; a bank loan 7,000 Credits. A stocktake then finds 1,500 Credits of feed has spoiled and must be written off. Assess the true position: build the corrected balance sheet, compute equity before and after the write-off, judge whether the business is genuinely failing or merely short of cash, and recommend a realistic plan.

Common mistake: Concluding the business is bankrupt from the low cash alone, ignoring its large positive equity.

Self-check: Did I separate "short of cash" (liquidity) from "owing more than owned" (solvency)?

Portfolio: Keep the corrected balance sheet, the equity calculation and your written judgement as a flagship assessment sample.

Skill: Reasoning~6 minLow-resourceDiscussion

Working orally in pairs with no materials, each learner gives two reasons a shop should physically count its stock instead of trusting the records alone. Share the best reasons with the group.

Common mistake: Assuming the records are always right, so a count is unnecessary.

Self-check: Did I give a reason records alone could miss?

Skill: revenue/cash, expense/payment, profit~30 minCalculation

A small print shop had this month: services delivered worth 9,000 Credits (of which 2,000 Credits has not yet been paid by customers); materials used worth 3,500 Credits (of which 1,000 Credits is still owed to the supplier); rent of 1,500 Credits paid; and the owner also bought a new machine for 4,000 Credits paid from the bank. One owner says “We only received 7,000 and paid 5,500 plus 4,000 for the machine, so we lost money.” (a) Explain why cash movement is not the same as profit. (b) Calculate the month’s profit correctly. (c) Explain how the unpaid customer amount, the unpaid supplier amount and the machine purchase each affect profit versus cash.

Common mistake: treating a machine purchase as an expense and counting only cash received as revenue.

Self-check: Did I separate “earned/used up” from “cash moved”?

Portfolio: keep your profit calculation and the profit-vs-cash explanation.

Skill: Identify documents~6 minDiscussion

For each situation, name the source document a bookkeeper would file: (a) a customer buys bread and is given proof of payment; (b) the workshop orders parts and is asked to pay within 30 days; (c) the business pays staff at month end; (d) money moves through the business account.

Common mistake: Calling every document an "invoice." A receipt proves payment already happened; an invoice requests future payment.

Self-check: Can I tell from the document whether money has already moved or is still owed?

Skill: Identify documents~5 minLow-resourceDiscussion

No paper needed. The instructor reads short lines aloud ("Please pay within 14 days", "Paid in full — thank you", "Amount deducted: wages", "Closing balance this month"). Learners call out: invoice, receipt, payslip, or bank statement.

Common mistake: Confusing a payslip with a receipt because both mention amounts paid; a payslip relates specifically to staff earnings and deductions.

Self-check: Did I react to the time cue rather than just the word "pay"?

Skill: Match evidence~10 minDiscussion

A small repair workshop lists four events. Match each to the correct source document and say what the document proves. Events: (1) sold a repaired fan for 300 Credits, cash; (2) bought a workbench for 4,000 Credits on 30-day terms; (3) paid the helper 1,200 Credits for the month; (4) noticed a 50 Credits bank charge appeared this month.

Common mistake: Treating a credit purchase as if it were a cash purchase, so no record of the amount owed is kept.

Self-check: For each event, does my document match whether cash actually moved?

Portfolio: Keep your matching table as a one-page "document map" reference.

Skill: Verify documents~8 minPortfolio

A training center receives a supplier invoice for 4,000 Credits of chairs. List the minimum details a usable invoice should contain before you file and pay it, then state two things you would do if a detail is missing.

Common mistake: Paying against an invoice with no reference number, making it hard to trace later.

Self-check: Could a stranger reading this invoice in a year know exactly what was bought and from whom?

Portfolio: Keep your invoice checklist as a reusable checklist for the workplace.

Skill: Recall rule~5 min

Complete the sentences: "Every transaction has at least ___ entries." "The total of debits must equal the total of ___." "An increase in cash is recorded on the ___ side of the cash account."

Common mistake: Thinking "debit" always means money going out. For an asset like cash, a debit means an increase.

Self-check: Can I state the rule without using the words "good" or "bad"?

Skill: Recall rule~6 minLow-resource

On the board or in a notebook, draw a large T. Label the left side "Debit" and the right side "Credit." Then write where each increase goes: cash, equipment, wages expense, sales income. Use only the board — no calculator.

Common mistake: Putting sales income on the left because money "came in." Income is credited; the matching cash debit is the entry that records the money coming in.

Self-check: Did I separate "where the cash goes" from "where the income goes"?

Skill: Post entries~12 minCalculation

Record the debit and credit for each, with amounts: (1) cash sale of 300 Credits; (2) bought equipment for 4,000 Credits, paid from the bank; (3) paid wages of 1,200 Credits in cash. Write each as "Debit ___ , Credit ___".

Common mistake: Reversing debit and credit on the equipment purchase, which would make the bank look like it grew.

Self-check: In each entry, does one account go up and one go down (or an expense rise against cash)?

Portfolio: Keep your three posted entries as your first worked double-entry sample.

Skill: Post & reason~20 minCalculation

A community bakery records one day: cash sales 300 Credits; bought an oven 4,000 Credits on 30-day credit from a supplier; paid casual wages 1,200 Credits cash; received a receipt for a 50 Credits bank charge. Post all four as debit/credit pairs, then explain in two or three sentences why the books still balance even though one purchase was on credit.

Common mistake: Crediting Cash for the oven even though no cash moved, which understates the bank or cash balance.

Self-check: Do my total debits exactly equal my total credits for the day?

Portfolio: Keep this worked day as evidence you can post mixed cash and credit transactions.

Skill: Read T-accounts~5 min

A cash T-account is shown empty. State which side records money received and which side records money paid out, and where the balance is written if cash is left over.

Common mistake: Writing payments on the left because they are "important." Side is decided by increase/decrease, not importance.

Self-check: If I add up both sides, can I find the closing balance?

Skill: Build T-accounts~12 minCalculation

Open a cash account with 2,000 Credits. During the week: cash sale 300 Credits received; paid wages 1,200 Credits; received 500 Credits from a customer. Build the cash T-account and find the closing balance.

Common mistake: Leaving the opening balance out of the debit side, which understates closing cash.

Self-check: Does my closing balance make sense — more cash in than out should give a debit balance?

Portfolio: Keep your completed T-account as a worked example.

Skill: Trial-balance logic~12 minLow-resourceCalculation

Using only a notebook, list these balances in two columns (Debit or Credit) and total each column: Cash 1,600; Equipment 4,000; Supplier payable 4,000; Sales 800; Wages 1,200; Capital 2,000. Decide whether the trial balance agrees.

Common mistake: Putting a liability such as Supplier payable on the debit side because it feels like money "owed out."

Self-check: Do both column totals match exactly?

Skill: Error finding~18 minCalculation

A shop's trial balance does not agree: debits total 7,100 Credits, credits total 6,800 Credits. The bookkeeper posted a cash sale of 300 Credits by debiting Cash but forgetting to credit Sales. Explain how this one-sided entry caused the 300 Credits gap, state which side is too high, and write the correcting entry.

Common mistake: "Fixing" the gap by changing the cash figure instead of adding the missing credit, which corrupts a correct balance.

Self-check: Does the difference between my columns equal the amount of the missing entry?

Portfolio: Keep your correcting entry and reasoning as evidence of error-checking skill.

Skill: Multi-step transfer~30 minCalculationInstructor-assigned

A small training center kept rough notes for one month: opening cash 2,000 Credits; course fees received 300 Credits cash, then another 500 Credits cash; bought 8 chairs for 4,000 Credits on 30-day credit; paid one trainer 1,200 Credits cash; a 50 Credits bank charge appeared on the bank statement; and the owner once took 200 Credits from the cash box "for the bus" with no note. Some events have no document at all. Your task: (a) list which source document should support each event and flag any missing; (b) post the proper double-entry for each business event; (c) build the cash T-account and find closing cash; (d) recommend two simple controls so next month's records are clean.

Common mistake: Recording the owner's 200 Credits as an expense or ignoring it, instead of treating it as drawings (personal withdrawal).

Self-check: Did I keep non-cash events (chairs on credit, bank charge) out of the cash T-account?

Portfolio: Keep your full worked case — documents, entries, T-account and controls — as a flagship bookkeeping sample.

Skill: Classify cash~6 min

Mark each as Business (B) or Personal (P): (a) buying flour for the shop; (b) the owner buying a birthday gift for a friend; (c) paying the shop's electricity; (d) the owner taking cash from the till for groceries at home.

Common mistake: Calling the owner's home groceries a business cost because they were paid from the till.

Self-check: Would this cost still exist if the business closed tomorrow?

Skill: Post drawings~8 minCalculation

The owner of a food stall takes 200 Credits from the business cash box for personal use. Write the double-entry, name the account used instead of an expense, and say how this differs from paying a 200 Credits business bill.

Common mistake: Posting drawings as an ordinary expense, which makes the business look less profitable than it is.

Self-check: Did I keep the owner's private spending out of the profit calculation?

Portfolio: Keep this entry and explanation as your drawings reference note.

Skill: Reasoned advice~20 minLow-resourceDiscussion

No computer needed — discuss and note on the board. A market trader keeps one pocket for everything: shop takings, home money, and the children's school costs all flow through it. Sales seem fine but she never knows if the stall is really making money. In a short spoken or written response, explain three concrete problems this causes and recommend a simple separation routine she could run with just a cash box and a notebook.

Common mistake: Recommending "just work harder" instead of a concrete separation-and-check routine.

Self-check: Does my routine let her prove the cash on hand matches what the notebook says?

Portfolio: Keep your problem list and routine as a one-page advice sheet.

Skill: documents, debit/credit, double-entry~30 minPortfolio

A small shop owner keeps no records and mixes shop money with home money in one pocket. This week: sold goods for 1,200 Credits cash; bought stock for 700 Credits on credit from a supplier; took 300 Credits from the shop for personal shopping; paid 200 Credits cash for electricity. (a) Explain two risks of mixing personal and business cash and of keeping no documents. (b) For each of the four events, state the two accounts affected and which is debited and which is credited. (c) Identify which event is NOT a business expense and explain why. (d) Suggest the simplest record system the owner could start on Monday.

Common mistake: recording the owner's personal withdrawal as a business expense.

Self-check: Did I give both sides for every event and spot the drawing?

Portfolio: keep your four postings and the proposed record system.

Skill: Reading statements~5 minDiscussion

In one sentence each, state what an income statement shows and what a balance sheet shows. Then say which one covers a period of time and which one shows a single moment.

Common mistake: Thinking the balance sheet "adds up the year" — it is a snapshot, not a running total of activity.

Self-check: Can I name one figure that only appears on each statement?

Skill: Classifying~5 min

Label each item as an Asset, a Liability, or Equity: (a) delivery van, (b) bank loan to be repaid next year, (c) cash in the till, (d) owner's capital, (e) unpaid supplier invoice, (f) stock of spare parts.

Common mistake: Calling owner's capital a liability — it is equity, the owner's own claim, not a debt to an outsider.

Self-check: For each item, did I ask "do we own it, owe it, or is it the owner's stake?"

Skill: Reading statements~10 minCalculation

A repair workshop reports for the year: Revenue 240,000 Credits; Cost of materials 90,000 Credits; Wages 70,000 Credits; Rent and other expenses 50,000 Credits. Calculate the profit for the year. Then say what would happen to profit if revenue fell to 200,000 Credits with all expenses unchanged.

Common mistake: Forgetting one expense line, which overstates profit.

Self-check: Did I subtract every expense line before reading off the profit?

Portfolio: Keep your worked income statement as a model layout to reuse for your own project business.

Skill: Reading statements~10 minLow-resource

Using only the board or your notebook, arrange these figures into a two-column balance sheet (Assets on the left; Equity and Liabilities on the right) and check that both sides are equal: Equipment 60,000; Stock 20,000; Cash 10,000; Owner's equity 50,000; Bank loan 40,000. Write the total of each side.

Common mistake: Sides that do not match because an item was placed on the wrong side.

Self-check: Do my two totals match exactly?

Skill: Reading statements~15 minCalculation

A community bakery gives you a partial balance sheet: Assets total 150,000 Credits; Bank loan 60,000 Credits; Unpaid supplier invoices 15,000 Credits. Owner's equity is missing. (a) Work out the owner's equity. (b) Explain in two or three sentences how the accounting equation let you find it, and what the figure tells the owner about how the business is financed.

Common mistake: Adding equity to liabilities instead of subtracting liabilities from assets.

Self-check: Does my equity figure make Assets = Equity + Liabilities hold true?

Portfolio: Keep this reconstruction as evidence you can apply the accounting equation to find a missing figure.

Skill: Vocabulary~5 min

Match each term to its meaning: (1) Profit, (2) Liquidity, (3) Solvency — to (a) able to pay bills as they fall due, (b) revenue exceeds expenses over the period, (c) total assets are enough to cover total debts over the long run.

Common mistake: Treating profit and liquidity as the same thing — a business can be profitable yet short of cash.

Self-check: Can I give a one-line example of each?

Skill: Concepts~5 minLow-resource

Answer True or False, out loud or in your notebook: (a) A profitable business always has cash in the bank. (b) A business can make a loss but still pay its bills this month. (c) Solvency is only about the next seven days.

Common mistake: Assuming "profitable" guarantees "has cash."

Self-check: Did I keep the period view (profit) separate from the cash view (liquidity)?

Skill: Classifying~10 minDiscussion

For each situation, classify the core problem as a profit, liquidity, or solvency problem: (a) A transport firm earns more than it spends each year but cannot pay this week's fuel bill because customers pay late. (b) A shop sells goods below cost to attract customers and loses money every month. (c) A workshop's total debts now exceed everything it owns.

Common mistake: Confusing "no cash today" (liquidity) with "losing money" (profit).

Self-check: Did I name the exact dimension, not just "money trouble"?

Portfolio: Keep your classification table as a reference card for diagnosing real cases.

Skill: Diagnosis & recommendation~20 minCalculation

A food-processing business had a good year: Revenue 400,000 Credits and Profit 48,000 Credits. Yet at year-end it cannot pay a 25,000 Credit supplier invoice due next week. The balance sheet shows: Cash 5,000; Customer invoices unpaid (receivables) 90,000; Stock of finished goods 80,000; Short-term bills due 25,000 Credits. (a) Diagnose the problem. (b) Calculate the current ratio. (c) Recommend at least three concrete actions, in priority order, to get through next week and to prevent a repeat. (d) Explain why a profitable business can still fail here.

Common mistake: Concluding the business is "unprofitable" or "insolvent" — it is profitable and well-covered on paper; the fault is timing of cash.

Self-check: Did I separate the year's profit from the cash available on the bill's due date?

Portfolio: Keep your diagnosis, current-ratio calculation and action plan as a worked case of a profitable-but-illiquid business.

Skill: Formulas~5 min

Reproduce the formula for each KPI: (a) Profit margin, (b) Current ratio, (c) Equity ratio.

Common mistake: Dividing by the wrong base — margin uses revenue, equity ratio uses total assets.

Self-check: For each formula, do I know what the denominator is?

Portfolio: Keep this formula card for use in later calculation tasks.

Skill: KPI calculation~10 minCalculation

A training center reports Revenue 120,000 Credits and Profit 42,000 Credits. Calculate the profit margin as a percentage, then state in one sentence what it means.

Common mistake: Inverting the fraction (revenue ÷ profit).

Self-check: Is my answer between 0% and 100% and does it match "profit per 100 Credits of sales"?

Skill: KPI calculation~10 minCalculation

A farm's balance sheet shows Total assets 200,000 Credits, financed by Equity 140,000 Credits and Liabilities 60,000 Credits. Calculate the equity ratio as a percentage and say in one sentence whether the financing looks strong.

Common mistake: Using liabilities instead of total assets as the denominator.

Self-check: Does equity ÷ total assets give a percentage at or below 100%?

Portfolio: Keep this calculation as a worked example of the equity ratio.

Skill: KPI calculation~10 minCalculation

A restaurant has Current assets of 36,000 Credits (cash, receivables, stock) and Short-term bills due of 24,000 Credits. (a) Calculate the current ratio. (b) State whether short-term bills are comfortably covered and what a ratio below 1.0 would mean.

Common mistake: Expressing the current ratio as a percentage instead of a multiple.

Self-check: Is my answer a multiple like 1.5, and is bigger here better?

Skill: KPI calculation~20 minCalculation

A small NGO-run print shop reports: Revenue 300,000 Credits; Profit 30,000 Credits; Total assets 250,000 Credits; Equity 100,000 Credits; Current assets 60,000 Credits; Short-term bills due 50,000 Credits. (a) Calculate all three KPIs: profit margin, equity ratio, current ratio. (b) Comment on each KPI in one short sentence. (c) Give an overall judgement: which area is the weakest and what is the one priority?

Common mistake: Mixing up the denominators — using assets for the margin or revenue for the equity ratio.

Self-check: Did I use revenue for margin, total assets for equity ratio, and short-term bills for current ratio?

Portfolio: Keep this three-KPI dashboard as a template for analysing any business in later chapters.

Skill: Interpreting~5 min

For each KPI, fill in "higher" or "lower" to complete the healthy direction: (a) Profit margin — generally ___ is healthier. (b) Equity ratio — generally ___ is healthier. (c) Current ratio — being below 1.0 is ___ healthy.

Common mistake: Assuming "higher is always better" without limit — very high current ratios can mean cash sitting idle.

Self-check: Can I say why each direction is healthier, not just which way?

Skill: Interpreting~10 minLow-resourceDiscussion

Using only the board or notebook, give a one-word verdict (Healthy / Risky) and one reason for each business: (a) Margin 25%, equity ratio 65%, current ratio 1.8. (b) Margin 2%, equity ratio 15%, current ratio 0.7. (c) Margin 12%, equity ratio 50%, current ratio 0.9.

Common mistake: Judging only on profit margin and ignoring liquidity and financing.

Self-check: Did I check all three KPIs before giving my verdict?

Skill: Assessment & recommendation~20 minCalculationInstructor-assigned

You advise a community transport cooperative. Year figures: Revenue 500,000 Credits; Profit 15,000 Credits; Total assets 400,000 Credits; Equity 80,000 Credits; Current assets 70,000 Credits; Short-term bills due 95,000 Credits. (a) Calculate the three KPIs. (b) Write a short board report (4–6 sentences) judging whether the cooperative is healthy or at risk across profitability, financing and liquidity. (c) Recommend a prioritised action plan and note one limitation of judging by ratios alone.

Common mistake: Declaring the business "healthy" because it made a profit, while ignoring the sub-1.0 current ratio and 20% equity ratio.

Self-check: Did my report judge profitability, financing and liquidity, not just profit?

Portfolio: Keep your board report as evidence you can turn KPIs into a reasoned, prioritised recommendation.

Skill: KPI interpretation~30 minCalculation

Business X: revenue 20,000 Credits, costs 19,000 Credits, current assets 6,000 Credits, current liabilities 3,000 Credits, equity 8,000 Credits, total assets 16,000 Credits. Business Y: revenue 20,000 Credits, costs 13,000 Credits, current assets 2,500 Credits, current liabilities 5,000 Credits, equity 2,000 Credits, total assets 20,000 Credits. (a) For each, calculate profit margin, current ratio and equity ratio. (b) Decide whether each business mainly has a profitability, a liquidity or a solvency problem. (c) Recommend one priority action for each. Use Credits.

Common mistake: assuming the profitable business (Y) is the safer one — high margin can hide a cash and debt problem.

Self-check: Did I read each ratio against a healthy range before judging?

Portfolio: keep your KPI table and the “healthy or risky?” diagnosis for both businesses.

Skill: Terminology~5 minDiscussion

In your own words, write one sentence defining a "cost" and one sentence defining an "expense" as used in cost and performance accounting. Then state the key difference in a single line.

Common mistake: Treating the two words as identical synonyms.

Self-check: Could I give one example of an expense that is not a cost?

Skill: Classification~5 min

For a small bakery making bread, label each item as a direct cost (D) or an indirect cost (I): (a) flour, (b) the baker's hourly wage for mixing dough, (c) electricity for the whole shop, (d) the manager's salary, (e) packaging for each loaf.

Common mistake: Calling all wages direct — supervisory and admin labour is usually indirect.

Self-check: Can I trace this item to one loaf without guessing?

Skill: Cost behaviour~10 minLow-resource

No materials needed beyond a board or your voice. The instructor reads a list aloud; for each item the class calls out "fixed" or "variable": monthly shop rent, raw material per item, fuel per delivery trip, annual insurance premium, hourly piece-rate wages, fixed manager salary. Explain one answer.

Common mistake: Assuming all wages are variable — a fixed monthly salary is a fixed cost.

Self-check: If volume doubled, would this number double too?

Skill: Classification~12 minPortfolio

A bicycle repair workshop lists these monthly items (Credits): spare parts used 4,200; mechanic piece-rate pay 3,000; workshop rent 1,500; owner's fixed salary 1,800; cleaning supplies 200; electricity 600 (half runs the tools, half lights the office). Build a small table with columns Direct/Indirect and Fixed/Variable, and place each item.

Common mistake: Forcing every item into "direct and variable" or "indirect and fixed" as if the two pairs always move together.

Self-check: Did I decide traceability and behaviour as two separate questions?

Portfolio: Keep your finished classification table as evidence of cost-analysis skill.

Skill: Expense vs cost~10 min

A transport business records these period outflows (Credits): fuel 5,000; driver wages 4,000; a one-time charitable donation 1,000; a loss when an old van was scrapped 800; vehicle maintenance 1,200. Which outflows are operating costs of the transport service, and which are expenses that are NOT costs of providing transport? Total each group.

Common mistake: Counting every cash outflow as a product cost.

Self-check: Is this outflow needed to produce the core output?

Skill: Cost structure~25 minPortfolio

A street food stall sells one product. Monthly figures (Credits): ingredients 6,000; cook wage paid per portion 3,600; stall licence 400; gas cylinder 500; owner's fixed wage 2,000; phone for orders 150; a fine paid once for late paperwork 300. Output was 1,200 portions. (1) Classify each item as direct/indirect and fixed/variable. (2) Separate any expense that is not a product cost. (3) Compute total variable cost per portion and total fixed cost per month. (4) Recommend one figure the owner should watch most closely and say why.

Common mistake: Including the late fine in product cost and inflating the per-portion figure.

Self-check: Did I keep traceability and behaviour as two independent judgements?

Portfolio: Keep your cost map and per-portion calculation as a worked exhibit.

Skill: Terminology~5 min

Fill in the blanks: A ____ is a place or function where costs are collected (for example the kitchen). A ____ is the single thing whose cost we want to know (for example one meal). Then give one more example of each from a repair workshop.

Common mistake: Swapping the two terms.

Self-check: Is this a place that collects cost, or the item I am pricing?

Skill: Overhead~10 minLow-resource

On the board or out loud, each learner names one overhead (indirect cost) found in a training center that is NOT a teacher's contact hour. Collect at least six different answers without repeating.

Common mistake: Naming a direct cost (the teacher's paid lesson hour) as overhead.

Self-check: Could I bill this to one single class without estimating?

Skill: Overhead allocation~12 minCalculation

A furniture workshop has total overhead of 12,000 Credits per month and expects 600 direct labour hours. (1) Compute the overhead rate per labour hour. (2) A chair takes 4 direct labour hours; how much overhead is charged to one chair? (3) If direct cost of the chair is 50 Credits, what is its full cost?

Common mistake: Adding the whole monthly overhead to one unit.

Self-check: Did I apply the rate per hour, then add direct cost?

Skill: Overhead~12 min

A small printing shop says each printed flyer "only costs" the paper and ink at 0.30 Credits. But the monthly accounts also show: rent 1,000, machine depreciation 400, shop electricity 300, owner admin time 800. The shop prints 5,000 flyers a month. Identify the hidden overhead the 0.30 figure ignores, and compute the true overhead cost per flyer.

Common mistake: Treating direct material cost as if it were full cost.

Self-check: Have I spread every indirect cost over the units?

Skill: Cost center allocation~25 minCalculation

A repair business has two cost centers. The Diagnostics center has monthly overhead 6,000 Credits and 300 expected hours. The Repair center has monthly overhead 9,000 Credits and 450 expected hours. A customer job needs 2 hours in Diagnostics and 5 hours in Repair, plus 90 Credits of parts. (1) Find each center's hourly overhead rate. (2) Compute the overhead charged to this job. (3) Compute the job's full cost. (4) The owner wants a 20% margin on full cost — what price should be quoted, and what is one risk of a single blended rate instead?

Common mistake: Mixing the two centers' hours into one pool before applying a rate.

Self-check: Did I keep each center's rate and hours separate before summing?

Skill: Formula recall~4 min

Reproduce the formula for unit contribution margin, then state in one line what it tells the business.

Common mistake: Subtracting total cost instead of only variable cost.

Self-check: Did I subtract only the variable cost?

Skill: Contribution margin~8 minCalculation

A product sells for 50 Credits and has a variable cost of 30 Credits per unit. (1) Compute the unit contribution margin. (2) Compute the contribution margin ratio (as a percentage of price). (3) If 200 units are sold, what is the total contribution?

Common mistake: Computing the ratio against variable cost instead of against price.

Self-check: Is my ratio a share of the selling price?

Skill: Break-even~10 minCalculation

Using the product above (price 50, variable 30, so contribution 20 per unit), fixed costs are 8,000 Credits per month. (1) Compute the break-even point in units. (2) Compute the break-even in sales Credits. (3) If the business sells 500 units, what is its profit?

Common mistake: Dividing fixed costs by price instead of by unit contribution.

Self-check: Did I divide fixed costs by the contribution per unit?

Portfolio: Keep this worked break-even calculation as a reusable template.

Skill: Break-even concept~6 minLow-resource

No paper required. In one spoken sentence each, explain to a partner: (a) what "break-even" means, and (b) what happens to profit for every unit sold above the break-even point.

Common mistake: Saying break-even is where revenue equals variable cost (it is where contribution equals fixed cost).

Self-check: Can I say it without using the word "formula"?

Skill: Break-even & target profit~22 minCalculation

A community bakery sells loaves at 50 Credits, variable cost 30, fixed costs 8,000 per month. (1) How many loaves give a target profit of 4,000 Credits? (2) A supplier raises flour, pushing variable cost to 34. With the same price, recompute the new break-even units. (3) The owner instead raises the price to 54 (variable still 34). Recompute break-even units. (4) Advise the owner: which response protects break-even better, and name one non-price option.

Common mistake: Reusing the old contribution of 20 after variable cost changes to 34.

Self-check: Did I recompute unit contribution every time a number moved?

Portfolio: Keep your scenario table showing break-even under each option.

Skill: Decision basics~5 min

True or false, and correct any false statement: (a) For a one-off special order with spare capacity, fixed costs are usually relevant. (b) A special order is worth taking if its price exceeds the variable cost per unit and there is spare capacity. (c) Sunk costs already spent should change the decision.

Common mistake: Rejecting an order because its price is below full cost even when capacity is spare.

Self-check: Which costs actually change if I accept?

Skill: Special-order decision~12 minCalculation

A workshop normally sells an item for 50 Credits; variable cost is 30; full cost (with allocated overhead) is 42. A school offers a one-time order of 100 units at 38 Credits each. The workshop has spare capacity and no other use for it. (1) Compare the offer price to the relevant cost. (2) Compute the extra contribution from accepting. (3) Accept or reject, with reason.

Common mistake: Comparing the offer to full cost (42) instead of variable cost (30).

Self-check: Did I use variable cost, not full cost, as the benchmark?

Skill: Special-order with constraint~22 minCalculation

A bottling workshop sells at 50 Credits, variable cost 30, contribution 20. A bulk buyer offers 600 units at 40 Credits. But the workshop is already at full capacity selling 600 regular units; accepting the order means dropping 600 regular sales. (1) Compute contribution per unit on the special order. (2) Compute the opportunity cost of the displaced regular sales. (3) Decide accept or reject with numbers. (4) State one non-financial factor and how it could change the decision.

Common mistake: Ignoring the lost contribution from displaced regular sales at full capacity.

Self-check: Did I include the opportunity cost of giving up regular sales?

Portfolio: Keep your accept/reject working showing the opportunity-cost comparison.

Skill: Diagnose a loss-making business~30 minDiscussionPortfolio

A small restaurant is full every night yet loses money. Monthly figures (Credits): revenue 60,000; food and drink ingredients 33,000; hourly kitchen and waiting wages 15,000; rent 6,000; manager salary 4,000; electricity and gas 3,000; equipment depreciation 1,500; a one-off repair 2,000. It served 6,000 meals at an average price of 10 Credits. Diagnose why a busy business loses money. (1) Split costs into variable and fixed (treat the one-off repair separately). (2) Compute total and per-meal contribution. (3) Compute the break-even number of meals and compare to 6,000. (4) Recommend at least three concrete actions, each tied to a number, to reach a small profit.

Common mistake: Assuming "busy" means "profitable" and never computing contribution per meal.

Self-check: Did I show why full capacity still falls below break-even in numbers?

Portfolio: Keep your full diagnosis and action plan as a flagship problem-solving exhibit.

Skill: Vocabulary~6 min

In one sentence each, define: (a) wish, (b) goal, (c) plan, (d) budget. Then add one short example of each from a small business of your choice.

Common mistake: Writing a "goal" with no number or date, which leaves it as a wish.

Self-check: Could someone else tell whether my goal was met?

Skill: Classify~5 min

Label each statement as Wish, Goal, or Plan: (1) "I hope more people come to the training center." (2) "Enrol 40 new learners by the end of next term." (3) "Print 200 flyers, visit 5 schools, run one open day in week 3." (4) "It would be nice to have a second classroom." (5) "Cut electricity cost by 10% within three months."

Common mistake: Calling statement 3 a goal — it is the set of steps, so it is a plan.

Self-check: Does the statement contain a number and a date, an action list, or neither?

Skill: Distinguish~5 minDiscussionLow-resource

Working from the board or aloud only, decide for each: is it a budget (a plan/target we commit to) or a forecast (our best guess of what will actually happen)? (a) "We will spend no more than 800 Credits on supplies this month." (b) "Sales will probably be around 3,200 Credits given the rains." (c) "Allocate 1,500 Credits to repairs this quarter." (d) "We expect about 90 customers next week."

Common mistake: Treating a forecast as a promise — a forecast may change as conditions change without anyone "breaking" it.

Self-check: Is this number something I decide, or something I predict?

Skill: Goal-setting~10 minPortfolio

Take the wish "Our repair workshop should make more money." Rewrite it as one measurable, dated goal, then list three plan steps (each with a rough Credits figure) that would move toward it.

Common mistake: Listing steps with no Credits figures, so the plan cannot be budgeted.

Self-check: Does my goal have a starting point, a target, and a date?

Portfolio: Keep your wish→goal→plan sheet as evidence of planning skill.

Skill: Budgeting~12 minCalculationPortfolio

A small food stall expects income of 4,800 Credits next month. Planned costs: ingredients 2,100; gas 300; rent 700; helper wage 600; packaging 250. Build a budget table showing each line, total costs, and planned surplus (income minus costs).

Common mistake: Adding income into the cost total by accident.

Self-check: Do my cost lines add up to exactly the total I subtracted?

Portfolio: Keep this budget table; you will compare it with actuals in Module 8.2.

Skill: Planning under uncertainty~20 minDiscussion

A community transport service runs a route that is busy in the dry season and quiet in the wet season. The manager must produce both a budget (a commitment) and a forecast (an honest prediction) for the coming quarter, which straddles both seasons. Explain how the two documents should differ, what each is used for, and how the manager should handle the risk that the wet season arrives early. Recommend one concrete safeguard.

Common mistake: Setting the budget on optimistic income, leaving no cushion when the season turns.

Self-check: Have I said clearly which document is a promise and which is a guess?

Skill: Formula recall~4 min

Write the formula for a variance between plan and actual, and state what a variance of zero means.

Common mistake: Reversing the subtraction without saying so, which flips the sign of every result.

Self-check: Am I consistent about which number I subtract from which?

Skill: Compare~5 minLow-resource

On the board or in your notebook, fill the variance column. Planned vs Actual (Credits): Sales 3,000 / 2,700; Rent 600 / 600; Supplies 900 / 1,050. Use Variance = Actual − Plan.

Common mistake: Writing all variances as positive numbers and losing the direction of the gap.

Self-check: Did I keep the minus signs where the actual was below plan?

Skill: Variance calculation~12 minCalculation

A tailoring shop planned and then recorded the month. Compute each variance and the total variance. Plan / Actual (Credits): Sales 5,000 / 5,400; Fabric 1,800 / 2,000; Wages 1,200 / 1,200; Power 250 / 300; Other 300 / 200.

Common mistake: Treating a higher cost variance as if it improved the result.

Self-check: Does a rise in a cost line make my surplus go up or down?

Skill: Percentage variance~10 minCalculation

An NGO project planned 8,000 Credits for travel and actually spent 9,200. Calculate the variance in Credits and as a percentage of plan, and state in one sentence whether this needs attention.

Common mistake: Using the actual figure as the denominator.

Self-check: Did I divide the gap by the planned figure?

Skill: Variance interpretation~22 minCalculationPortfolio

A small restaurant's month closed as follows (Plan / Actual, Credits): Sales 12,000 / 10,800; Food cost 4,800 / 4,600; Staff 3,000 / 3,200; Rent 1,500 / 1,500; Energy 600 / 780; Marketing 400 / 250. Calculate every line variance, the change in surplus, and write a short brief (4–6 sentences) telling the owner which two variances matter most and what you would investigate first.

Common mistake: Praising the lower food cost without noticing it is caused by weaker sales, not better buying.

Self-check: Have I separated variances the owner controls from those driven by demand?

Portfolio: Keep your variance table and owner brief as an assessment-style work sample.

Skill: Classify~5 min

For each, say whether the variance is favourable (helps surplus) or adverse (hurts surplus): (a) sales above plan, (b) sales below plan, (c) a cost above plan, (d) a cost below plan.

Common mistake: Assuming a positive number is always favourable — a positive cost variance is adverse.

Self-check: Did this variance make my surplus better or worse?

Skill: Concept~5 min

True or false, with one reason each: (1) "If a sale is recorded, the cash is already in hand." (2) "A profitable month can still run short of cash." (3) "Paying a supplier early uses cash sooner than the cost was earned."

Common mistake: Believing a profitable business can never have a cash shortage.

Self-check: Am I talking about earning the money or actually holding it?

Skill: Favourable/adverse~10 minCalculation

A repair workshop reports (Plan / Actual, Credits): Sales 6,000 / 6,300; Parts 2,400 / 2,650; Wages 1,500 / 1,400; Rent 800 / 800. For each line give the variance, label it favourable or adverse, and state the net effect on surplus.

Common mistake: Judging favourable/adverse by the sign of the number instead of the effect on surplus.

Self-check: For each line, did surplus go up or down versus plan?

Skill: Cash flow timing~12 minCalculationLow-resource

Using only the board or your notebook, track running cash for a market trader starting with 500 Credits. Week 1: buy stock 600 (out), no sales yet. Week 2: sell for 900 (in), pay helper 100 (out). Week 3: buy stock 400 (out), sell 300 (in). Show the cash balance at the end of each week and say in which week cash is tightest.

Common mistake: Judging cash health by the closing balance only and missing a mid-period dip.

Self-check: Did the running balance ever fall below zero?

Skill: Profit vs cash analysis~22 minCalculation

A small farm sells produce to two buyers. Both deals earn the same planned profit of 1,000 Credits this month. Buyer A pays cash on delivery; Buyer B pays 60 days after delivery, but the farm must buy seed and pay labour now (1,400 Credits up front). The farm holds 800 Credits cash. Explain why the two equally-profitable deals create very different cash situations, calculate the cash gap under Buyer B, and recommend what the farm should do.

Common mistake: Concluding both deals are equally safe because the profit is the same.

Self-check: Did I check whether cash held covers the up-front spend?

Skill: Vocabulary~4 minDiscussionLow-resource

Aloud or on the board, name and describe in one phrase each the three common planning scenarios used to test a plan against uncertainty.

Common mistake: Only ever planning the best case and being unprepared when reality is worse.

Self-check: Can I state what each scenario assumes?

Skill: Option comparison~12 minCalculation

A school print room can buy Machine X (cost 2,000 Credits, prints 500 jobs/month, upkeep 100/month) or Machine Y (cost 3,200 Credits, prints 900 jobs/month, upkeep 120/month). The school needs about 800 jobs/month. With a budget cap of 3,500 Credits, recommend one machine and justify it in two sentences.

Common mistake: Picking the lowest price without checking it meets the need.

Self-check: Does my chosen option meet both the budget and the requirement?

Skill: Scenario building~12 minCalculation

A bakery's base-case sales are 4,000 Credits/month. Build best (+20%), base, and worst (−25%) cases, and for each subtract fixed costs of 2,800 Credits to show the surplus in every scenario.

Common mistake: Forgetting that fixed costs stay the same across all three scenarios.

Self-check: Even in the worst case, is the surplus still positive?

Skill: Decision under constraint~28 minCalculationDiscussionPortfolio

A community training center planned the term on 60 enrolled learners paying 200 Credits each (income 12,000). Planned costs: two trainers 6,000; rent 2,400; materials 1,800; electricity 600; admin 400 — total 11,200, planned surplus 800. Two weeks in, only 42 learners have enrolled and one trainer has resigned. The center holds 700 Credits cash and must not run a deficit for the term. (1) Recompute the income at 42 learners and the resulting surplus/deficit if costs were unchanged but only one trainer is now paid (3,000). (2) Identify the constraints. (3) Propose a revised plan that keeps the term viable, with at least two concrete actions and their Credits effect. (4) State one risk of your plan and how you would monitor it.

Common mistake: Solving only the money gap and ignoring that one trainer cannot teach the full programme.

Self-check: Does my revised plan stay non-negative AND keep the teaching deliverable within the 700-Credit cash limit?

Portfolio: Keep your recalculation, revised plan and monitoring trigger as a capstone decision-making work sample.

Skill: Prioritisation under constraint~22 minCalculationDiscussionLow-resource

A public office receives a one-off grant of 5,000 Credits and four requests: roof repair 2,800 (prevents further damage), new chairs 1,500 (comfort), staff training 1,200 (improves service), backup power 2,000 (avoids work stoppages). Only 5,000 Credits is available. Choose what to fund, justify the trade-offs, and explain how you would handle the request you cannot fully meet.

Common mistake: Funding the easiest or most popular requests first and leaving no room for the safety-critical roof.

Self-check: Did I rank by what happens if each item is NOT funded?

Skill: Vocabulary~5 minDiscussion

In one sentence each, define the following: (a) organizational chart, (b) line of reporting, (c) span of control, (d) hierarchy level.

Common mistake: Confusing span of control (how wide) with hierarchy level (how deep).

Self-check: Can I point to each of these four things on a real chart?

Skill: Concept check~4 min

Mark each statement True or False: (1) A flat structure has few hierarchy levels. (2) A wide span of control means one manager supervises many people. (3) An org chart shows daily task instructions. (4) The owner is usually placed at the top of the chart.

Common mistake: Expecting the org chart to also act as a task list or schedule.

Self-check: Do I know the difference between structure and process?

Skill: Org charting~15 minPortfolio

A bakery has: 1 Owner-Manager; reporting to the owner are a Head Baker and a Shop Supervisor; under the Head Baker are 2 Bakers; under the Shop Supervisor are 2 Sales Assistants and 1 Cleaner. Draw the org chart with boxes and connecting lines. Then state the span of control of the Owner-Manager and of the Shop Supervisor.

Common mistake: Counting every employee as a direct report instead of only those one line below.

Self-check: Does each box have exactly one line going up to one manager?

Portfolio: Keep your finished chart as evidence you can model a reporting structure.

Skill: Org charting~12 minLow-resourceDiscussion

Using only the board or a notebook, draw the org chart of a training center with: 1 Director; a Finance Officer and an Academic Coordinator reporting to the Director; 3 Trainers reporting to the Academic Coordinator. Then explain aloud one risk if the Finance Officer also reported to the Academic Coordinator instead of the Director.

Common mistake: Letting reporting lines cross so a person appears to have two bosses without saying why.

Self-check: Does my chart keep finance independent of the budget holder?

Skill: Structure design~30 minPortfolio

A motorbike repair workshop grew from 4 to 14 staff. The Owner currently has all 13 others reporting directly to her: 6 mechanics, 2 parts clerks, 2 cashiers, 1 cleaner, 1 driver, 1 receptionist. She is overwhelmed and decisions are slow. Propose a revised structure (draw the new chart in words), choose sensible team leads, state the Owner's new span of control, and justify your design in terms of span of control and decision speed.

Common mistake: Adding leads but still leaving many staff reporting straight to the Owner, so the span barely changes.

Self-check: Is every one of the 14 people placed exactly once, with one clear boss?

Portfolio: Keep the before/after charts and your justification as a structure-design sample.

Skill: Process reading~6 min

A small shop fills a customer order like this, but the steps are scrambled. Put them in the correct order: (A) Pack the goods; (B) Receive the order; (C) Hand to the delivery driver; (D) Pick items from the shelf; (E) Check the order against stock.

Common mistake: Packing before picking, or handing to the driver before the goods are packed.

Self-check: Does each step have a clear input from the step before it?

Skill: Vocabulary~4 minLow-resourceDiscussion

Orally or in your notebook: define a "handover" in a workflow and give one example from a restaurant. Then say in one line why handovers are often where errors happen.

Common mistake: Describing the whole process instead of the single pass-the-work moment.

Self-check: Can I name the two parties involved in a handover?

Skill: Bottleneck analysis~15 minCalculation

A food-processing line has four stages and each works in sequence. Per hour: Stage 1 Wash handles 200 units; Stage 2 Cut handles 120 units; Stage 3 Pack handles 180 units; Stage 4 Label handles 220 units. (a) Which stage is the bottleneck? (b) What is the maximum output of the whole line per hour? (c) Name one practical fix.

Common mistake: Averaging the stage rates instead of taking the minimum.

Self-check: Did I take the lowest stage rate, not the average?

Skill: Process mapping~18 minPortfolio

Map the workflow for processing a delivery note at a wholesaler: a goods receiver checks the delivery, a storekeeper shelves the items, and a clerk records them in the stock book. Draw the steps as a simple flow (boxes and arrows), mark the two handover points, and note next to each handover one thing that could go wrong.

Common mistake: Forgetting that the number of handovers is one less than the number of roles in a simple chain.

Self-check: Did I mark a risk at every point where work changes hands?

Portfolio: Keep the flow diagram as a process-mapping example.

Skill: Bottleneck redesign~30 minCalculation

A community clinic processes patients in sequence per hour: Registration 40, Nurse screening 25, Doctor consult 15, Pharmacy 30. Patients complain about long waits. (a) Identify the bottleneck and the line's hourly throughput. (b) The clinic can hire one extra person for one stage. Show how throughput changes if they add a second doctor (consult capacity doubles to 30). (c) Recommend whether to add the doctor or do something else, with reasoning.

Common mistake: Assuming throughput jumps to 30 after adding a doctor, forgetting that the next-slowest stage (Nurse, 25) now limits the line.

Self-check: After my fix, did I re-check which stage is now slowest?

Skill: Vocabulary~6 min

Match each internal control (1–4) to its purpose (a–d). Controls: (1) Two signatures on large payments; (2) Pre-numbered receipts; (3) Monthly cash count; (4) Password on the accounting file. Purposes: (a) Detect missing money; (b) Prevent unauthorized access; (c) Stop one person approving alone; (d) Make missing documents obvious.

Common mistake: Mixing up detective controls (find a problem after) with preventive controls (stop it before).

Self-check: For each control, is it preventing or detecting?

Skill: Concept check~4 min

Fill in the blanks: "Segregation of duties means no single person should both ______ a transaction and ______ the same transaction, because that removes the natural ______ that one person's work places on another."

Common mistake: Thinking segregation is only about honesty; it also catches honest mistakes.

Self-check: Can I name the three duties that should be split?

Skill: Control review~14 min

At a small NGO, the same volunteer receives cash donations, writes the receipt, and updates the donation register. Nobody else checks. (a) Name the control weakness. (b) Explain in two sentences why it is risky. (c) Propose one simple fix that keeps within a small team.

Common mistake: Suggesting a physical fix (safe, lock) when the gap is about oversight, not storage.

Self-check: Does my fix bring a second pair of eyes to the same transaction?

Skill: Control review~12 minLow-resourceDiscussion

Read aloud and discuss: in a school canteen, the cook orders supplies, receives them, approves the supplier invoice for payment, and the cashier pays whatever the cook approves without checking the goods arrived. On the board, list each control weakness you can spot and write one fix beside each. No computer needed.

Common mistake: Stopping at one weakness when several incompatible duties are combined.

Self-check: Did I check all four steps: order, receive, approve, pay?

Skill: Control redesign~35 minPortfolio

In a small transport business, the office manager single-handedly approves supplier invoices, makes the payments, and records every payment in the books. The owner trusts him completely and there is no other check. (a) Explain the risks this creates, for both fraud and honest error. (b) Redesign the process so duties are properly segregated, given there are only the owner, the office manager, and one assistant. (c) List the specific controls you would add and who does what.

Common mistake: Saying "just trust a good person" — trust is not a control, and the design must work even if staff change.

Self-check: In my redesign, are approve, pay, and record held by three different people?

Portfolio: Keep your redesigned process and control list as evidence of segregation-of-duties skill.

Skill: Matrix reading~6 min

A responsibility matrix uses R = Responsible (does the work), A = Accountable (answers for it), C = Consulted, I = Informed. In the row below, who actually performs the task and who is ultimately answerable for it? Task "Prepare payroll": Assistant = R, Owner = A, Accountant = C, Staff = I.

Common mistake: Assuming the Responsible and Accountable person are always the same.

Self-check: Can I tell R from A in this row?

Skill: Matrix building~18 minPortfolio

A small farm shop has four tasks (receive stock, set prices, record sales, bank the cash) and three people (Owner, Shopkeeper, Helper). Build a responsibility matrix using R, A, C, I. Use the table structure below and fill every cell so each task has exactly one A and at least one R.

Common mistake: Giving a task two Accountable (A) people.

Self-check: Does every row have exactly one A?

Portfolio: Keep your completed matrix as a sample of role-clarity work.

Skill: Process improvement~15 minDiscussion

At a repair workshop, customers wait while a job ticket is filled by hand, then re-typed into a logbook, then copied again onto the invoice — the same details written three times. Identify the type of waste, then propose one improvement and state one benefit and one risk of your change.

Common mistake: Adding people or speed instead of removing the unnecessary step.

Self-check: Does my fix remove a step rather than just doing it faster?

Skill: Integrated redesign~35 minPortfolio

A community shop discovered that stock kept disappearing and cash never matched the till. Investigation showed: no org chart, one clerk did all ordering, receiving, selling, recording and cash banking, and there was no responsibility matrix. As the new coordinator, produce an improvement plan that (a) defines a clear structure, (b) builds a responsibility matrix for the five tasks above, (c) names the internal controls that close the gaps, and (d) identifies the likely bottleneck your new process could create and how to manage it.

Common mistake: Adding controls but still leaving one clerk doing selling, recording and banking together.

Self-check: Have I used all four ideas — structure, matrix, controls, and bottleneck?

Portfolio: Keep the full improvement plan as a capstone sample for this chapter.

Skill: roles, workflow & controls~30 minPortfolio

A growing tailoring workshop has two supervisors. Both accept customer orders, both tell the cutters what to do, and both sometimes take cash. Orders are getting lost, cutters receive conflicting instructions, and one day cash did not match the order book. (a) Identify the structural problem (role clarity) and the process problem (workflow / bottleneck). (b) Identify the internal-control weakness in how cash and orders are handled. (c) Draw a simple responsibility matrix for four steps — take order, instruct cutting, take payment, record payment — assigning a clear owner to each. (d) Redesign the order-to-payment workflow so instructions are consistent and cash cannot be handled and recorded by the same person.

Common mistake: adding more rules instead of giving each task one clear owner and separating handling from recording.

Self-check: Does each step have exactly one owner, and is cash handling separated from recording?

Portfolio: keep your responsibility matrix and redesigned workflow.

Skill: Concepts~5 min

In your own words, write one sentence defining "management" and one sentence defining "leadership". Then underline the key difference between the two.

Common mistake: Treating the two words as identical, or assuming only senior people "lead".

Self-check: Could I explain the difference to a colleague in 20 seconds?

Skill: Classification~5 minLow-resource

On a board or in your notebook, draw two columns headed "More management" and "More leadership". Place each activity in a column: (a) building a weekly staff rota, (b) inspiring the team with a vision for next year, (c) checking the cash count matches the sales report, (d) coaching a discouraged worker, (e) approving an expense form, (f) deciding to enter a new market.

Common mistake: Putting everything "important" under leadership; routine control work is real management, not a lesser activity.

Self-check: For each item, did I ask "is this about order or about direction"?

Skill: Analysis~10 minDiscussion

A bakery supervisor must get a new hygiene routine adopted within one week. Describe how a more directive (telling) style and a more participative (involving) style would each handle this. State which you would choose and one reason why.

Common mistake: Saying one style is "always best". Style should fit the task, the time and the team.

Self-check: Did I link my chosen style to the actual constraints (time, safety, experience)?

Skill: Role transition~20 minDiscussion

A skilled repair technician has just been promoted to team lead of six technicians. After two months, output has fallen: the new lead still does most repairs personally and rarely delegates. Diagnose what is going wrong in terms of management and leadership, and recommend three concrete changes the new lead should make.

Common mistake: Recommending the lead "work harder" — the problem is role, not effort.

Self-check: Do my recommendations move the lead from doing the work to enabling others?

Portfolio: Keep your diagnosis and three actions as a worked example of leading a team transition.

Skill: Process~5 min

Put these HR lifecycle steps in the correct order: onboarding, job analysis, selection, advertising the vacancy, development, receiving applications.

Common mistake: Advertising before analysing the job, which leads to a vague vacancy notice.

Self-check: Does each step logically need the one before it?

Skill: Concepts~5 min

Match each item to either "Job description" or "Person specification": (a) duties and tasks, (b) required skills and qualities of the person, (c) reporting line, (d) experience needed, (e) main responsibilities.

Common mistake: Mixing personal qualities into the job description instead of the person specification.

Self-check: Is this about the job, or about the person?

Skill: Planning~15 minPortfolio

A small training center needs to hire one part-time administrator within six weeks. Create a recruitment plan as a mini table with at least five steps, showing for each step the activity, who is responsible, and the target week.

Common mistake: No named owner or no dates, so the plan cannot be tracked.

Self-check: Could someone else run my plan using only the table?

Portfolio: Keep your recruitment plan table as evidence of a structured hiring process.

Skill: Onboarding~12 minLow-resourcePortfolio

Using only a notebook or board, design an onboarding checklist of at least eight items for a new shop assistant's first day and first week. Group them into "Before arrival", "First day" and "First week".

Common mistake: Treating onboarding as a one-hour welcome instead of a planned first week.

Self-check: Would a nervous newcomer feel oriented and safe using my checklist?

Portfolio: Keep the onboarding checklist as a reusable template.

Skill: Selection~20 minDiscussion

A community NGO advertised for a project coordinator and received only four applicants, none of whom perfectly match the person specification. The board wants to hire quickly. Recommend how to run a fair, defensible selection, decide whether to appoint from this pool or re-advertise, and justify your reasoning.

Common mistake: Hiring the "least-bad" applicant under time pressure without checking the essential criteria.

Self-check: Could I defend each scoring decision to an outside observer?

Portfolio: Keep your scoring approach as a model of fair, transparent selection.

Skill: Concepts~5 min

Label each as intrinsic or extrinsic motivation: (a) bonus pay, (b) pride in doing good work, (c) public recognition, (d) interest in the task itself, (e) a pay rise.

Common mistake: Assuming only money motivates; intrinsic factors are often stronger and cheaper.

Self-check: Does this reward come from inside the person or from outside?

Skill: Compensation~10 minCalculation

A workshop pays a base salary of 2,000 Credits per month plus a performance bonus of up to 400 Credits. The bonus is paid in proportion to a performance score out of 100. Calculate the total monthly pay for a worker scoring (a) 100, (b) 75, and (c) 50.

Common mistake: Scaling the base salary by the score instead of only the bonus.

Self-check: Did I scale only the 400 Credit bonus, not the base?

Skill: Conflict~15 minDiscussion

Two cooks in a restaurant kitchen repeatedly argue over who controls the prep schedule, slowing service. As their supervisor, outline the steps you would take to resolve the conflict and reach a workable agreement.

Common mistake: Taking sides or only ordering the conflict to stop, which lets it return.

Self-check: Did I address the cause and agree a clear, checkable arrangement?

Skill: Compensation~25 minCalculationDiscussion

A delivery business has six riders on a base of 2,000 Credits plus a bonus of up to 400 Credits. Riders complain the current bonus rewards only speed, encouraging unsafe riding. Redesign the bonus so it balances safety, reliability and customer satisfaction, show how it would be calculated for one rider, and explain how you would keep riders motivated beyond pay.

Common mistake: Letting the weighted parts add up to more than the 400 Credit cap, or rewarding speed by another name.

Self-check: Does my scheme cap at 400 Credits and reward safety as much as speed?

Portfolio: Keep your bonus design and worked calculation as evidence of fair compensation design.

Skill: Feedback~5 minLow-resource

Orally or in your notebook, mark each statement true or false: (a) Good feedback is specific and based on observed behaviour. (b) Feedback should only ever be negative. (c) Feedback works best soon after the event. (d) "You are lazy" is useful feedback. (e) Feedback should suggest what to do differently.

Common mistake: Confusing judging the person ("you are lazy") with describing behaviour.

Self-check: Does my feedback describe behaviour and point forward?

Skill: Development~15 minPortfolio

A junior accounts clerk is good with numbers but unsure when handling customer queries. Create a simple six-month development plan as a mini table with at least three goals, showing for each: the goal, the action/support, and how success is measured.

Common mistake: Goals with no measurable success criterion or no timeframe.

Self-check: Could I tell at month six whether each goal was met?

Portfolio: Keep your development plan as a reusable template for coaching staff.

Skill: Performance~20 minDiscussion

A normally reliable transport dispatcher has missed three handovers in a month, causing late departures. As supervisor, plan and outline the performance conversation you would hold: how you prepare, how you open, what you say, and how you agree next steps fairly.

Common mistake: Opening with blame or assuming the cause before listening.

Self-check: Is my conversation factual, two-way, and aimed at improvement with support?

Portfolio: Keep your conversation plan as a model for fair performance discussions.

Skill: Integrated case~30 minDiscussionInstructor-assigned

A food-processing workshop has grown from 4 to 22 staff in a year. The founder still makes every decision, there is no recruitment or onboarding process, pay is set ad hoc (base around 2,000 Credits with informal bonuses up to 400), new hires leave within weeks, two teams are in open conflict, and no one receives feedback or development. The founder asks you to diagnose the problems and propose a 90-day plan to fix the people side of the business. Cover leadership, recruitment, onboarding, compensation, conflict and development, and prioritise what to do first.

Common mistake: Listing fixes with no priority or sequence, or ignoring that the founder's refusal to delegate is the root cause.

Self-check: Does my plan name a root cause, cover all six areas, and say clearly what comes first and why?

Portfolio: Keep your diagnosis and 90-day plan as a capstone piece on managing people in a growing organization.