Grade 11 Commerce: Business studies

In this unit, 'Nature, forms and purposes of business', you learn to compare forms of business ownership. You work with exam-style questions and written reasoning. You see it, say it, then do it alone.

• Read the idea in 'Nature, forms and purposes of business' and tie it to a small real business, such as a school shop or a family stall.
• Write the rule or format in your own words and keep one clean example.
• Use it: compare forms of business ownership. Work from source papers or a short story of transactions.
• Check it: totals agree, each entry has a reason, and every figure can be traced.

Step by step.

1. Step 1, Compare business with other activities. Business is an economic activity done regularly to earn profit by producing or exchanging goods and services. A tailor selling shirts is business; a teacher volunteering for free is not. Business aims at profit, but also survival, growth and a good name with customers.
2. Step 2, Compare the sole proprietorship. One person owns, manages and takes all profit, and has unlimited liability. Example: a shop owner has business debts of Rs 200,000 but business assets of only Rs 150,000. The remaining Rs 50,000 can be recovered from the owner's personal property. Advantages are quick decisions and full control; the drawback is limited capital.
3. Step 3, Compare the partnership. Two or more persons agree to share profit, usually with unlimited liability. Capital of 60,000 from partner A and 40,000 from partner B is in the ratio 3 : 2. A profit of Rs 50,000 is shared as 30,000 and 20,000. More partners bring more money and skill, but disagreements can slow decisions.
4. Step 4, Compare the company. A company is a separate legal person, with owners called shareholders and limited liability. A shareholder who paid Rs 10,000 for shares can lose at most that Rs 10,000, even if the company owes millions. Under Indian company law a private company needs at least 2 members and a public company at least 7, and a cooperative society usually at least 10; check the current figure.
5. Step 5, Compare in a table by liability, ownership, life and capital. Sole trader: unlimited, one owner, ends with owner, small capital. Partnership: usually unlimited, 2 or more owners, may end if a partner leaves, medium capital. Company: limited, many shareholders, continues despite changes of owners, large capital. Match each form with its advantages and limits.
6. Step 6, Your turn: three friends put in Rs 100,000 each to open a tailoring shop and earn Rs 90,000 profit. Name a suitable form and share the profit. Answer: a partnership, because three persons pool money and skill. Equal shares give 90,000 / 3 = Rs 30,000 each. Their liability is unlimited unless they register a limited form.

Activity. About 40 to 50 minutes of class work, then one short practice task for home. Keep evidence: a timed paper and an error log.

Standard to meet. Compare forms of business ownership: at least 70 percent on an exam-style task, with the method shown.

In this unit, 'Public, private and global enterprises', you learn to compare enterprise types and their roles. You work with exam-style questions and written reasoning. You see it, say it, then do it alone.

• Read the idea in 'Public, private and global enterprises' and tie it to a small real business, such as a school shop or a family stall.
• Write the rule or format in your own words and keep one clean example.
• Use it: compare enterprise types and their roles. Work from source papers or a short story of transactions.
• Check it: totals agree, each entry has a reason, and every figure can be traced.

Step by step.

1. Step 1, Compare the three types. The public sector is owned by the government, the private sector by individuals or companies, and global enterprises operate in many countries. A state bus service is public, a local bakery is private, and a firm with factories in ten countries is a global enterprise.
2. Step 2, Compare public enterprises. A departmental undertaking is part of a ministry, such as the railways. A statutory corporation is created by a special law of the legislature and has its own powers. A government company is registered under the company law and the government holds at least 51 percent of the shares. The government may hold all of the shares.
3. Step 3, Compare their roles. Public enterprises build infrastructure such as roads and power, provide services where profit is low, create jobs and help balanced regional growth. Private enterprises respond fast to demand, bring innovation and efficiency, and generate most employment in trade. Both pay taxes that support public services.
4. Step 4, Compare global enterprises. They have large capital, advanced technology, a wide network of branches, and a global marketing approach. They create jobs, bring investment, and widen consumer choice, but can strain local small businesses. A joint venture shares ownership and risk between a foreign firm and a local firm.
5. Step 5, Calculate a public private partnership. In a build-operate-transfer road, a private firm spends Rs 400 crore and collects tolls of Rs 30 crore a year. Payback = 400 / 30 = about 13.3 years. After the contract period, the road is handed to the government. The public gains the road without paying the cost, the firm earns a return.
6. Step 6, Your turn: the government holds 5,100 of a company's 10,000 shares. Is it a government company? Name one role of a public enterprise. Answer: yes, 5,100 / 10,000 = 51 percent, which meets the minimum. One role is providing essential services, such as electricity, at reasonable prices where private firms may not.

Activity. About 40 to 50 minutes of class work, then one short practice task for home. Keep evidence: a timed paper and an error log.

Standard to meet. Compare enterprise types and their roles: at least 70 percent on an exam-style task, with the method shown.

In this unit, 'Business services', you learn to describe banking, insurance, transport and communication services. You work with exam-style questions and written reasoning. You see it, say it, then do it alone.

• Read the idea in 'Business services' and tie it to a small real business, such as a school shop or a family stall.
• Write the rule or format in your own words and keep one clean example.
• Use it: describe banking, insurance, transport and communication services. Work from source papers or a short story of transactions.
• Check it: totals agree, each entry has a reason, and every figure can be traced.

Step by step.

1. Step 1, Describe banking services. Banks accept deposits in savings, current, fixed and recurring accounts, give loans, keep valuables, transfer money and offer cards and mobile payments. Savings accounts suit individuals and pay low interest. Current accounts suit traders with many daily payments. Fixed deposits lock money for a fixed term at a higher interest rate.
2. Step 2, Describe the fixed deposit with numbers. Rs 50,000 at 6 percent per year for 2 years: simple interest = 50,000 x 6 / 100 x 2 = Rs 6,000. If interest is added each year (compound), year 1 gives 53,000 and year 2 gives 56,180, so the interest is Rs 6,180. Compounding earns interest on interest.
3. Step 3, Describe insurance and its principles. Insurance spreads risk: many people pay small premiums and the insurer pays the few who suffer loss. Principles: utmost good faith (tell all facts), insurable interest (you must lose if the thing is lost), indemnity (you are paid the actual loss, not more), and contribution when two insurers cover one risk.
4. Step 4, Describe a fire insurance claim. A shop is insured for Rs 500,000 and pays a premium of Rs 2,000 a year. A fire causes Rs 120,000 of damage. Under indemnity the insurer pays the actual loss of Rs 120,000, not the full Rs 500,000. The owner is back where they were, with no profit from the loss.
5. Step 5, Describe transport and communication. Road gives door-to-door service for short distances, rail suits bulk goods over long distances, water carries very heavy cargo cheaply, and air is fastest for urgent or perishable goods. Communication includes post, email, telephone and the internet, which let buyers and sellers agree prices and orders quickly.
6. Step 6, Your turn: find the amount from Rs 20,000 in a fixed deposit at 5 percent compounded yearly for 3 years, and name the best transport for fresh flowers sent overseas. Answer: 20,000 x 1.05^3 = Rs 23,152.50. Air transport is best because flowers are perishable and need speed.

Activity. About 40 to 50 minutes of class work, then one short practice task for home. Keep evidence: a timed paper and an error log.

Standard to meet. Describe banking, insurance, transport and communication services: at least 70 percent on an exam-style task, with the method shown.

In this unit, 'Emerging modes and social responsibility of business', you learn to explain e-business and ethics. You work with exam-style questions and written reasoning. You see it, say it, then do it alone.

• Read the idea in 'Emerging modes and social responsibility of business' and tie it to a small real business, such as a school shop or a family stall.
• Write the rule or format in your own words and keep one clean example.
• Use it: explain e-business and ethics. Work from source papers or a short story of transactions.
• Check it: totals agree, each entry has a reason, and every figure can be traced.

Step by step.

1. Step 1, Explain e-business. It means doing business activities through electronic networks: online selling, banking, ticket booking and bill payment. Compared with a shop, it works day and night, reaches distant buyers, and cuts rent costs. Its limits include no touch-and-feel of goods, delivery delay and security risks.
2. Step 2, Explain how an online order works. The buyer chooses an item, places the order, pays by card or bank transfer, and the seller packs and delivers it and issues an invoice. Safe habits: use secure sites, never share a one-time password or card PIN, and be wary of messages asking you to click unknown links.
3. Step 3, Explain outsourcing. A business hands a task such as customer calls, payroll or accounting to an outside firm. Example: handling the calls in-house needs 10 staff x Rs 30,000 = Rs 300,000 a month, but an outside provider charges Rs 240,000. The saving is 60,000, or 20 percent, and the firm focuses on its main work.
4. Step 4, Explain business ethics. These are moral rules about right and wrong: honest advertising, fair prices, correct weights, paying taxes and treating workers properly. Ethical firms win trust and loyal customers; a firm that hides a product defect may gain this month but loses its reputation and may face legal penalties.
5. Step 5, Explain social responsibility with a rule of thumb. Responsibility means a business acts for the good of society too, for example by cutting pollution or supporting schools. In India, companies above set size limits must spend about 2 percent of their average net profit of the last three years on social causes; check the current figure. Profits of 6, 8 and 10 crore average 8 crore, and 2 percent of it is 0.16 crore, which is Rs 16 lakh.
6. Step 6, Your turn: a firm's net profits over three years are 9, 12 and 15 crore. Find the 2 percent social spending and name one ethical practice. Answer: average = (9 + 12 + 15) / 3 = 12 crore; 2 percent of 12 crore = 0.24 crore, which is Rs 24 lakh. Practice: give honest product information in advertisements.

Activity. About 40 to 50 minutes of class work, then one short practice task for home. Keep evidence: a timed paper and an error log.

Standard to meet. Explain e-business and ethics: at least 70 percent on an exam-style task, with the method shown.

In this unit, 'Sources of business finance and small business', you learn to compare sources of finance and support for small business. You work with exam-style questions and written reasoning. You see it, say it, then do it alone.

• Read the idea in 'Sources of business finance and small business' and tie it to a small real business, such as a school shop or a family stall.
• Write the rule or format in your own words and keep one clean example.
• Use it: compare sources of finance and support for small business. Work from source papers or a short story of transactions.
• Check it: totals agree, each entry has a reason, and every figure can be traced.

Step by step.

1. Step 1, Compare finance by period. Short-term finance is repaid within a year and funds working capital, such as stock; examples are trade credit and bank overdraft. Long-term finance is held for more than five years and buys machines or buildings, such as shares and debentures. Medium term lies in between.
2. Step 2, Compare owner's funds. These are money put in by owners: equity shares and retained earnings. Retained earnings are profit kept in the business. If profit is Rs 50,000 and 30 percent is retained, Rs 15,000 is reinvested. Owner's funds carry no fixed repayment, but dividends depend on profit.
3. Step 3, Compare borrowed funds. Loans and debentures must be repaid with interest, and trade credit lets a firm pay a supplier after 30 days. Borrowing Rs 100,000 at 12 percent costs Rs 12,000 interest a year whether or not the firm earns profit. Interest on debt is paid before profit is shared.
4. Step 4, Compare by cost and risk. To raise Rs 500,000, a 10 percent loan costs Rs 50,000 each year and must be repaid, giving risk if sales fall. New equity needs no fixed payment, but shares ownership and later dividends. A sensible firm mixes both, choosing by cost, risk, control and repayment time.
5. Step 5, Compare small business support. In India, micro, small and medium enterprises are grouped by limits on investment and turnover, with micro the lowest and small above it; the government revises these limits from time to time, so check the current figure. Support includes easier loans, skill training, raw material help and marketing assistance, since small firms struggle with credit and competition.
6. Step 6, Your turn: a shop needs Rs 300,000. It can keep Rs 30,000 of retained profit and borrow the rest at 10 percent. Find the loan and yearly interest. Answer: the loan is 300,000 - 30,000 = Rs 270,000; yearly interest = 270,000 x 10 / 100 = Rs 27,000. The retained profit carries no interest.

Activity. About 40 to 50 minutes of class work, then one short practice task for home. Keep evidence: a timed paper and an error log.

Standard to meet. Compare sources of finance and support for small business: at least 70 percent on an exam-style task, with the method shown.

In this unit, 'Internal and international trade', you learn to describe domestic and international trade. You work with exam-style questions and written reasoning. You see it, say it, then do it alone.

• Read the idea in 'Internal and international trade' and tie it to a small real business, such as a school shop or a family stall.
• Write the rule or format in your own words and keep one clean example.
• Use it: describe domestic and international trade. Work from source papers or a short story of transactions.
• Check it: totals agree, each entry has a reason, and every figure can be traced.

Step by step.

1. Step 1, Describe internal trade. It is buying and selling inside one country. Wholesale trade sells in large lots to retailers; retail trade sells small quantities to the final consumer. Example: a wholesaler buys goods at Rs 100 and sells to a retailer at Rs 120, then the retailer sells to a customer at Rs 150. Margins are 20 and 30.
2. Step 2, Describe retail types. Itinerant traders such as street hawkers carry goods to buyers. Fixed shops include small general stores, department stores with many sections, supermarkets with self-service, and chain stores with branches. Online retail sells through websites. Choose by place, range and service.
3. Step 3, Describe why countries trade. Resources, climate and skills differ, so one country may grow tea cheaply while another makes machines cheaply. Trade lets each sell what it produces best and buy the rest. Export means selling abroad, import means buying from abroad, and entrepot trade means importing goods only to export them again.
4. Step 4, Describe the export steps. The exporter receives an enquiry, sends a quotation, gets an order and a payment guarantee, produces and packs the goods, obtains clearance, ships them and presents documents. Key documents are the invoice, the bill of lading (receipt for goods on a ship) and, at the importing end, the bill of entry.
5. Step 5, Describe the trade balance. Balance of trade = value of exports minus value of imports. If a country exports goods worth 500 and imports 650 (in billions), the balance is 500 - 650 = minus 150, a trade deficit. If exports exceed imports, it is a surplus. This counts goods only, not services.
6. Step 6, Your turn: a country exports goods worth 820 and imports 760. Find the balance and say whether it is a surplus or deficit. Answer: 820 - 760 = 60, a trade surplus of 60. Name one document used when goods go by sea: the bill of lading.

Activity. About 40 to 50 minutes of class work, then one short practice task for home. Keep evidence: a timed paper and an error log.

Standard to meet. Describe domestic and international trade: at least 70 percent on an exam-style task, with the method shown.

On the slide: L1 Basic · What a business does

Notes: Name what a business makes or sells, who buys it and what it needs to start. Notes: pick a local bakery; learners list its inputs, its customers and one risk, using no formal terms yet.

On the slide: L2 Awareness · Ownership and aims

Notes: Explain sole trader, partnership and company forms and the idea of limited liability. Notes: an owner invests 10,000 and the business fails owing 40,000; a sole trader may owe the rest personally, a company shareholder loses at most 10,000.

On the slide: L3 Foundation · Marketing mix and break-even

Notes: Apply product, price, place and promotion to a case and calculate break-even. Notes: fixed costs 6,000, price 20 and variable cost 8 give contribution 12 per unit, so break-even is 500 units; learners test a price of 22.

On the slide: L4 Practitioner · People and labour turnover

Notes: Compare leadership styles and calculate labour turnover with a view on cause. Notes: 6 leavers from an average of 120 staff is 5 per cent; learners suggest two causes, one pay related and one not, and say what evidence would separate them.

On the slide: L5 Specialist · Investment appraisal

Notes: Calculate payback and average return and recommend whether to invest. Notes: an outlay of 50,000 with cash inflows of 20,000 a year pays back in 2.5 years; learners say what the method ignores, such as cash after year 3.

This course: Grade 11 Commerce Business studies is at this level. Its units include Nature, forms and purposes of business; Public, private and global enterprises; Business services; Emerging modes and social responsibility of business and more.

On the slide: L6 Advanced · Discounted cash flow and strategy

Notes: Evaluate a project using net present value and link it to strategic fit. Notes: an outlay of 100,000 and inflows of 40,000 for three years at 10 per cent give a present value of about 99,474, so NPV is about minus 526; test sensitivity to the rate.

On the slide: L7 Super expert · Cost of capital and governance

Notes: Create a recommendation on a merger using weighted cost of capital, synergy and board oversight. Notes: 60 per cent equity at 10 per cent and 40 per cent debt at 5 per cent after tax gives 8 per cent; accept only if risk-adjusted synergies beat it.