FINANCIAL ANALYST: MAKING BUSINESS DECISIONS
LESSON PLAN OVERVIEW
Career: Financial analysts provide guidance to businesses and individuals when making investment decisions. They assess the performance of stocks, bonds, and other types of investments.
Lesson: This lesson plan includes ways to introduce students to the career of a Financial Analyst through understanding money and investing. Students will role play being the boss and employee to make financial decisions. Students will then role play being a Financial Analyst and an individual to help them understand personal finances through buying items with credit.
Grade Level: Elementary Grades
Learning Objectives: 〉
career of a Financial Analysts and how they advise companies and individuals on money. 〉 Students will role play the boss/employee
TEACHER GUIDE
Lesson Instructions: This lesson plan will help you demonstrate to students common skills and procedures used by Financial Analysts. Begin the lesson by reading the Class Message below to your students, then have them watch the recommended Video Introduction. Afterwards, facilitate discussion with the Class Questions listed.
After the discussion, students will work on the included activities. Each activity has a printable worksheet with student instructions and areas to record their work. Have students read their worksheets before beginning each activity.
You should also familiarize yourself with the student worksheets to help demonstrate any procedures and help facilitate the ending activity discussion .
Class Message: Today we are going to explore the career of a Financial Analyst. Does anyone know what the word finance means? How about analyst? Finance is having to do with money. An Analyst is someone who analyzes something, in this case, they look at data. We will discuss common tasks Financial Analysts do like adding up large numbers, using rounding skills, and writing financial reports.
A Financial Analyst provides detailed financial reports including monthly statements on profit and loss to help assess the condition of their company or client. They use math skills along with attention to detail to help guide their company to making wise financial decisions.
This lesson will introduce you to the career of a Financial Analyst through understanding money and investing. You will role play being the boss and employee to make financial decisions. You will then role play being a Financial Analyst and an individual to help you understand personal finances through buying items with credit.
Let’s watch this brief video to better understand the role of a Financial Analyst and how their work impacts the business they work for.
Class Discussion Questions:
〉 Think about your future, what big purchases would you like to make in your lifetime? Before you make them, would you like the advice of a trained financial professional? Why or why not? - Possible responses: go to college, buy a car, buy a house. Allow students to answer questions and provide responses.
〉 Why would a business or family want to seek advice from a Financial Analyst prior to making life changing large purchases? - Possible responses: to ensure it is a smart investment, to ensure they can afford the purchase.
〉 In your experience what is a purchase you want to make with your own money? Are you saving up for your purchase? Will you do extra chores? - Possible responses: Allow students to answer questions and provide responses.
〉 Before we begin the activity, would you like a job helping companies or individuals using your math skills to prepare financial reports to help them make good decisions? - Possible responses: Allow students to answer questions and provide responses.
Activities Overview: This lesson plan includes two student activities. Activity #1 demonstrates how financial analysts calculate monthly statements and prepare monthly reports. In Activity #2, students will understand personal finances through buying on credit.
Read and familiarize yourself with the student worksheet for each activity
Activity #1: Monthly Financial Meeting
This activity challenges students to calculate and report on their companies’ monthly financial statement
Activity Instructions:
〉 Hand out the student worksheet.
〉 Facilitate introduction of activity.
〉 Walk students through the process of rounding numbers in the tens, hundreds, and thousands place.
〉 After completion, facilitate the discussion questions for this activity.
Activity Discussion:
〉 Why would the boss want to look at rounded numbers? - Possible responses: it is easier to read, focus attention on the bottom-line number.
〉 Why is it important to look at all the departments separately to better understand the health of a company? - Possible responses: can see which department is productive and which department is not, can focus on how to increase sales in each department.
〉 Would you like to be a financial analyst? Why or why not? - Allow students to answer questions and provide responses.
Activity #2: Buying on Credit
In this activity, students will learn about personal finances through buying using credit.
Activity Instructions:
〉 Hand out Student Worksheet: Activity #2: Creating a Safe Environment for Electricians
〉 Facilitate introduction of activity
〉 Assign students into pairs.
〉 Give each group the activity cards.
〉 After completion, facilitate the discussion questions for this activity.
Activity Discussion:
〉 Why do you think the Financial Analyst cares whether or not the individual can afford to make the purchase? - Possible responses: the Financial Analyst does not want the family to default on the loan, to lose the item they purchased (house, car, boat, etc.), wants family to be able to meet their financial obligations.
〉 Why do you think there are standards for credit approval? - Possible responses: to prevent individuals from overspending and being unable to pay their monthly bills.
〉 What do you think would happen if the individual cannot make the monthly payments? - Possible responses: the item purchased would be taken away, the individual would have to return the item, the individual’s credit rating would suffer, the individual would not be able to make future purchases.
CAREER INSIGHT
Career Highlight: This lesson plan highlights some of the skills a financial analyst uses on a daily basis to advise companies and individuals on making financial decisions. See the Employers in My Area section to contact businesses and organizations in your area about classroom demonstrations, on-site visits, or other additional career exposure opportunities
Featured Career: Financial Analyst
Career Descriptions: Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.
Financial analysts typically do the following.
〉 Recommend individual investments and collections of investments, which are known as portfolios
〉 Evaluate current and historical financial data
〉 Study economic and business trends
〉 Examine a company’s financial statements to determine its value
〉 Meet with company officials to gain better insight into the company’s prospects
〉 Assess the strength of the management team
〉 Prepare written reports
Other Names for this Career: Securities Analyst, Trust Officer, Equity Research Analyst, Financial Analyst, Portfolio Manager, Investment Analyst, Real Estate Analyst, Credit Products Officer, Planning Analyst, Analyst
STANDARDS ALIGNMENT
Activities #1 and #2:
Cornerstone: Demonstrate command of the conventions of standard English grammar and usage when speaking and conventions of standard English grammar and usage, including capitalization and punctuation, when writing.
〉 Describe how a narrator’s or speaker’s point of view influences how events are described.
Activity #1:
Monthly Financial Meeting
Mathematics Standards:
〉 Round whole numbers to the nearest 10 or 100 using understanding of place value.
〉 Recognize that in a multi-digit whole number digit in one place represents 10 times as much as it represents in the place to its right. For example, recognize that 7 in 700 is 10 times bigger than the 7 in 70 because 700 ÷ 70 = 10 and 70 x 10 = 700.
〉 Round multi-digit whole numbers to any place (up to and including the hundredthousand place) using understanding of place value.
〉 Fluently add and subtract within 1,000,000 using appropriate strategies and algorithms.
〉 Recognize that in a multi-digit number, a digit in one place represents 10 times as much as it represents in the place to its right and 1/10 of what it represents in the place to its left.
〉 Round decimals to the nearest hundredth, tenth, or whole number using understanding of place value.
Activity #2: Buying on Credit
Mathematics Standards:
〉 Solve two-step contextual problems using the four operations. Represent these problems using equations with a letter standing for the unknown quantity. Assess the reasonableness of answers estimation strategies including rounding
〉 Solve multi-step contextual problems posed with whole numbers and having wholenumber answers using the four operations, including problems in which remainders must be interpreted. Represent these problems using equations with a letter standing for the unknown quantity. Assess the reasonableness of answers using estimation strategies including rounding.
〉 Explain equivalence of fractions and compare fractions by reasoning about their size.
〉 Solve contextual problems involving addition and subtraction of fractions referring to the same whole and having like denominators
〉 Solve one- or two-step real-world problems involving whole number measurements with all four operations within a single system of measurement including problems involving simple fractions.
〉 Use parentheses and/or brackets in numerical expressions and evaluate expressions having these symbols using the conventional order (Order of Operations).
EDUCATOR RUBRIC
ITEM
Following Instructions
Does Not Meet Expectations
Student could not or would not follow along with the instructions, thereby influencing their partner and not finishing the activity.
Completing Math Computations
Student did not fully understand the different process steps needed to complete the math equations when playing the role of Financial Advisor
Written Responses
The written response lacked explanation.
Meets Expectations Exceeds Expectations
Student followed instructions and completed the activity in the stated timeline.
Student followed instructions, completed the activity in the stated timeline and exhibited. Student was attentive during all parts of the activity including the discussion sessions.
Student roll playing as the Financial Advisor was able to properly and accurately provide advice to their “client” and their
The written response included detailed explanation.
Student roll playing as the Financial Advisor was able to properly and accurately provide advice to their “client”
The written responses included detailed explanations. Written response is error free in punctuation, capitalization and use of grammar.
Team Work
The student did not work well with teammate
The student worked well with teammate
The student worked well with teammate and exhibited leadership.
ACTIVITY #1: MONTHLY FINANCIAL MEETING
Introduction: Financial Analysts gather important information about the health of a company and provide that information to the decision makers so they can make more informed decisions. Part of this information involves using math to add, subtract, and round large numbers in order to understand how the company performed monthly.
Financial Analysts look at each part of the company and get information on its performance. Often in business, the different divisions of a company have sales goals. The financial analyst is the person who knows best if those goals are met or not.
Activity Description: In today’s activity, we will look at the rounded sales numbers for the three branches of an automotive company and calculate the overall performance. In this activity, you’ll be adding with large numbers and rounding to the tens and hundreds place to make the numbers easier for the boss to see. You will need to calculate the total sales for all three branches of the company and the overall health of the entire company
〉 Car Sales: this is the largest branch of the company.
〉 Motorcycle Sales: this is a new branch of the company
〉 Maintenance Contract: this is often the most stable part of the company
〉 Overall Company Performance: this is the total overall sales and health of the company.
NOTE: The Motorcycle department numbers need to be rounded to the tens place. The Car and Maintenance sales need to be rounded to the hundreds place and the overall performance needs to be rounded to the thousands place.
Activity Procedure:
〉 First add all the numbers for each department.
〉 Then round to the proper place setting.
〉 Add all the departments to get the overall health of the company.
〉 Compare this month to last month and then write a letter to your boss on the health of the company for the month of July.
Maintenance Contracts: $755 $619 $454
Total Company Sales July 2019
Round to the tens
Round to the hundreds
Round to the hundreds
Round to the thousands
Writing Your Monthly Report:
In the month of June, the company sold $17,000 worth of motorcycles, $57,600 worth of cars, and did $1,200 worth of maintenance contracts. Write a report to the company president on the total performance in the month of July compared to June.
Activity Discussion:
〉 Why would the boss want to look at rounded numbers?
〉 Why is it important to look at all the departments separately to better understand the health of a company?
〉 What would be exciting about being a financial analyst?
ACTIVITY #2: BUYING ON CREDIT
Introduction: Financial Analysts also work with individuals and families to help them make informed choices based on family finances. Often growing families consider making life-changing large financial decisions such as:
〉 Buying a new home
〉 Buying a bigger car
〉 Buying a new toy (boat or camper) for the family to enjoy
〉 Buying an existing business
〉 Earning a higher level of education like a Doctorate (Ph.D.).
In order for the financial analyst to help the family make good financial decisions, they need certain information such as:
〉 Their weekly salary
〉 Their monthly salary
〉 Their annual salary
〉 The cost of the desired purchase
〉 And the monthly payment of the new purchase
There are certain criteria or factors a Financial Analyst considers when they provide advice on a particular large purchase. In particular, they use a formula to determine if the purchasing family can actually afford to make the purchase based on the following industry standards.
〉 When purchasing a home, the monthly cost of the home should not exceed 1/3 (33.3%) of the family’s monthly income.
〉 When purchasing a car, the monthly cost of the car should not exceed 1/3 (33.3) of the family’s monthly income
〉 When purchasing a toy for family pleasure, the cost should not exceed 1/10 (10%) of the family’s monthly income
〉 When pursuing an advanced degree, the cost should not exceed 2/5 (40%) the family’s monthly income.
〉 When purchasing an existing business, the cost should not exceed 1/2 (50%) the family’s monthly income.
Activity Description: Today, we are going to role-play being both a family in search of a major purchase (Player 1) and a Financial Analyst (Player 2). Each will have a role to play and each will write a paragraph statement of position
Player 1: Family Purchasing
〉 Choose at random a weekly salary card.
〉 Choose one or two large purchases based on your personal preference.
〉 Calculate your own monthly income by using this formula: Weekly income X 52 (weeks in a year) divided by 12 = Monthly Salary
〉 Determine what fraction of your monthly salary is your chosen purchase by doing the following: Divide monthly purchase price by monthly salary to gain a fraction.
〉 Write a paragraph statement supporting your interest in purchasing the item you chose.
〉 Present your choice and your financials to your Financial Analyst for their review.
Player 2: Financial Analyst
〉 Study the criteria for making a good choice on big purchases.
〉 Wait for Player #1 to present their case.
〉 Once they present their choice, ask them for the following Weekly income, monthly income, annual income The monthly cost to purchase their chosen item
〉 Check Player #1’s math on the weekly and monthly income.
〉 Calculate on your own if they meet the criteria to proceed with the purchase or purchases.
〉 Write an answer to the player telling them if they should be able to make the purchase or purchases. Put it in a short paragraph.
〉 Share your answer with your client and explain your reason.
Player 1 Cards: Cut out each card separately keep them in stacks by rows.
WEEKLY SALARY $340
WEEKLY SALARY $520
WEEKLY SALARY $775
WEEKLY SALARY $1,312
HOUSE: TOTAL PURCHASE PRICE $300,000 AMOUNT DUE MONTHLY FOR 30 YEARS: $1,300/MONTH
CAR: TOTAL PURCHASE PRICE $25,000 AMOUNT DUE MONTHLY FOR 5 YEARS: $550/MONTH
BOAT: TOTAL PURCHASE PRICE $30,000 AMOUNT DUE MONTHLY FOR 10 YEARS: $330/MONTH
BUSINESS: TOTAL PURCHASE PRICE $775,000 AMOUNT DUE MONTHLY FOR 20 YEARS: $3,300/MONTH WEEKLY SALARY $1,950
EDUCATION (PHD): TOTAL PURCHASE PRICE $140,000 AMOUNT DUE MONTHLY FOR 15 YEARS: $1,200/MONTH
Player 1’s written reasoning for wanting object and rationale for if they afford it:
Player 2 - Financial Analyst Worksheet
Client salary weekly
Client salary weekly x 52 = Annual salary
Show work:
Client Annual Salary
Client salary annually /12 = monthly salary
Show work:
Client Monthly Salary
Solve for Percent
MONTHLY COST OF PURCHASE
DIVIDED BY MONTHLY INCOME
MULTIPLIED BY 100 = PERCENT
FINANCIAL ANALYST DECISION POINTS
HOUSE MUST BE <1/3 (33.3%) OF MONTHLY INCOME
CAR MUST BE <1/3 (33.3%) OF MONTHLY INCOME
BOAT MUST BE <1/10 (10%) OF MONTHLY INCOME
BUSINESS MUST BE <1/2 (50%) OF MONTHLY INCOME
EDUCATION MUST BE <2/5 (40%) OF MONTHLY INCOME
Player 2’s written answer to player 1 on why or why not they can or cannot afford the choice they are wanting to make:
Activity Discussion
:
〉 Why does the Financial Analyst care whether or not the individual can afford to make the purchase?
〉 Why do you think there are standards for credit approval?
〉 What do you think would happen if the individual cannot make the monthly payments?
