Lesson Plan

• Define profitability and explain its significance for business performance.
• Identify and calculate the four key profitability measures: gross profit, net profit, profit margin and ROCE.
• Interpret profitability ratios to assess financial health and compare with industry benchmarks.
• Analyse how internal and external factors influence a company’s profitability.

• Projector and screen
• Whiteboard and markers
• Calculator for each student
• Printed worksheet with profit‑and‑loss data (XYZ Ltd)
• Handout of profitability formulas
• Sample business case (XYZ Ltd) copies

Start with a quick poll: “What makes a business successful?” Connect student ideas to the concept of profit generation. Briefly review previous learning on revenue and costs. State today’s success criteria: students will calculate and interpret key profitability ratios.

1. Do‑now (5'): Students list three ways a business can improve profitability on sticky notes; share briefly.
2. Mini‑lecture (10'): Define profitability, introduce gross profit, net profit, profit margin and ROCE with formulas; display flowchart.
3. Guided practice (15'): Work through the XYZ Ltd example together, calculating each measure step‑by‑step.
4. Independent activity (15'): Students complete the worksheet, calculating profitability ratios for a new case and interpreting the results.
5. Think‑pair‑share (5'): Discuss how pricing, cost control, product mix and external factors affect the ratios.
6. Formative check (5'): Quick quiz (exit ticket) – one ratio calculation and a short interpretation.

Recap the four profitability measures and their role in business decision‑making. Students submit an exit ticket calculating profit margin for a brief scenario. For homework, each learner finds a real company’s profitability ratios and writes a short comparison with industry averages.