Instructions & Guidelines: How to Use This Case Study

• Before Reading Prepare Your Mind & Tools
• Time Allocation Set aside 15 mins

The Case Study: “Yohannes’s Solar Struggle & Victory”

Yohannes used his 10,000 ETB savings and a 5,000 ETB loan to start a solar cooker business in Addis Ababa. He spent 12,000 ETB on tools (assets) and materials, and then sold 15 cookers for 12,000 ETB (revenue). But expenses (8,000 ETB imports + 3,000 ETB rent) left only 1,000 ETB profit – too little to repay his loan (liability). His equity (assets minus liabilities) turned negative when tool values dropped. To survive, he partnered with a local workshop to share tools (cut assets but eliminated debt) and switched to Ethiopian-made parts – making equity positive in 60 days.

Test Your Understanding

1. (Self-Check with Answers Below)
2. “Yohannes’ loan was a ______. His unsold cookers were ______.”
   A) Asset, Liability
   B) Liability, Asset
   C) Revenue, Expense
3. “Yohannes’ partnership solved his crisis by:
   a) Increasing sales
   b) Reducing liabilities
   c) Boosting marketing

Answers

1. B) Liability, Asset!
2. b) Reducing liabilities