Lesson Plan

• Describe the purpose of the inventory turnover ratio and identify its components (COGS and average inventory).
• Calculate average inventory and the inventory turnover ratio from given financial data.
• Interpret turnover results to assess inventory efficiency and suggest improvements.
• Compare a calculated turnover ratio with industry benchmarks and explain its significance.

• Projector or interactive whiteboard
• Slide deck with formulas and examples
• Printed worksheet containing practice questions
• Calculators or spreadsheet software
• Sample financial statements (income statement & balance sheet)
• Whiteboard and markers

Begin with a quick question: “What happens to a business if it holds too much stock?” Connect this to students’ prior knowledge of Cost of Goods Sold. Explain that today they will learn how to measure inventory efficiency and what the results mean for decision‑making.

1. Do‑now (5') – short quiz on the definition of COGS and its role in profitability.
2. Mini‑lecture (10') – introduce the inventory turnover formula and how to compute average inventory.
3. Guided example (12') – work through the ABC Ltd. calculation on the board, highlighting each step.
4. Pair activity (10') – students calculate turnover for Practice Question 1 and discuss possible interpretations.
5. Concept check (8') – think‑pair‑share on why an excessively high turnover might be risky.
6. Exit ticket (5') – each student writes one real‑world implication of the inventory turnover ratio.

Recap the four‑step process: obtain COGS, find opening/closing inventory, compute average inventory, then divide. Collect exit tickets to gauge understanding, and assign the remaining practice questions as homework for further mastery.