Lesson Plan

• Calculate gross profit margin using sales and COGS.
• Calculate net profit margin using sales and total expenses.
• Interpret profit‑margin percentages to evaluate business efficiency.
• Identify common mistakes when computing profit margins.
• Apply profit‑margin analysis to compare two companies.

• Projector and screen
• Whiteboard and markers
• Scientific calculators
• Printed worksheet with income‑statement data (ABC Ltd.)
• Practice question handout
• Answer key / teacher guide
• Spreadsheet template for margin calculations (optional)

Begin with a quick poll: “If a company sells £1, how much profit do you think it keeps?” Connect this to students’ prior knowledge of revenue and expenses. Explain that today they will learn how to express that profit as a percentage – the profit margin – and how to use it to judge business performance. Success will be measured by accurate calculations and clear interpretation of the results.

1. Do‑Now (5′): Students list the formulas they recall for gross and net profit margin on a sticky note.
2. Mini‑lecture (10′): Present the profit‑margin concept, formulas, and the difference between gross and net margins using the projector.
3. Guided Practice (15′): Walk through the ABC Ltd. example step‑by‑step, filling in calculations on the board.
4. Partner Activity (12′): Students use the worksheet to compute gross and net margins for a new set of figures, checking each other’s work.
5. Common Pitfalls Discussion (5′): Highlight typical errors (wrong profit figure, missing percentage conversion, mismatched periods) and have students correct a deliberately flawed example.
6. Exit Ticket (3′): Each student writes one correct margin calculation and one interpretation sentence on a slip of paper.

Recap the steps for calculating both gross and net profit margins and why percentages matter for business decisions. Collect exit tickets to gauge understanding, then assign homework: complete the four practice questions from the handout and bring a real‑world example of a company’s profit margin for the next class.