Lesson Plan

• Describe the key components of a simple profit or loss statement.
• Calculate gross profit, operating profit and net profit from given data.
• Analyse a profit or loss statement to identify the main cost drivers affecting profitability.
• Apply basic margin ratios to evaluate business performance.
• Make a basic managerial decision (e.g., pricing or cost control) based on the statement’s results.

• Projector and screen
• Whiteboard and markers
• Printed worksheet with profit‑and‑loss statement template
• Calculator for each student
• Handout of example financial data
• Laptop with spreadsheet software (optional)

Begin with a quick question: “If a business’s revenue is £120,000 but its costs total £130,000, what does that tell us?” Use this to recall prior knowledge of revenue and costs, then outline that today’s success criteria are to construct a profit‑or‑loss statement and use it to suggest a simple business decision.

1. Do‑now (5’) – Short quiz on revenue vs. costs to activate prior learning.
2. Mini‑lecture (10’) – Explain each component of a profit or loss statement using slides and the standard layout.
3. Guided practice (15’) – Walk through the worked example, filling in the table together and calculating each profit level.
4. Pair activity (15’) – Students complete the XYZ Ltd. exercise, calculate margins and record their results on the worksheet.
5. Class discussion (10’) – Groups share findings; teacher facilitates a discussion on what decisions (pricing, cost control, investment) the statement suggests.
6. Exit ticket (5’) – Each student writes one specific decision they could make based on the statement.

Recap the steps for building a profit or loss statement and how the figures inform managerial choices. Collect the exit tickets as a quick retrieval check, and assign homework: students create a profit‑and‑loss statement for a product of their choice and propose one improvement based on their analysis.