Lesson Plan

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Lesson Plan
Grade: Date: 25/02/2026
Subject: Accounting
Lesson Topic: explain the relationship of gross profit and profit for the year to the valuation of inventory, rate of inventory turnover, revenue, expenses, and equity
Learning Objective/s:
  • Describe how gross profit and profit for the year relate to inventory valuation and turnover.
  • Calculate gross profit, profit for the year, inventory turnover and related profitability ratios.
  • Analyse the impact of changes in revenue, COGS and expenses on profit margins and equity.
  • Apply these relationships to solve typical IGCSE accounting exam questions.
Materials Needed:
  • Projector or interactive whiteboard
  • Printed worksheet with sample income statements and balance sheets
  • Calculator or spreadsheet software
  • Formula sheet handout (gross profit, profit for year, inventory turnover, ROE)
  • Markers and whiteboard
 Introduction:
Begin with a quick poll: “If a business sells more but its stock stays the same, what happens to profit?” Review the previous lesson on revenue and COGS. Explain that today’s success criteria are to compute key ratios and explain how profit figures influence inventory and equity.
Lesson Structure:
  1. Do‑now (5’) – Short quiz on revenue, COGS and gross profit formulas.
  2. Mini‑lecture (10’) – Review formulas for gross profit, profit for the year and inventory calculations using the projector.
  3. Guided practice (12’) – Work through a sample income statement to compute gross profit, profit for the year and then calculate inventory turnover and margins; teacher circulates.
  4. Concept‑mapping activity (8’) – In pairs, create a flowchart linking revenue → COGS → gross profit → expenses → profit for the year → equity and indicate effects on inventory valuation.
  5. Application task (10’) – Solve an IGCSE‑style question on how a change in gross profit alters inventory turnover and equity; peer‑check answers.
  6. Check for understanding (5’) – Exit ticket: write one sentence describing the relationship between profit for the year and retained earnings.
Conclusion:
Summarise that higher gross profit can raise inventory values but lower turnover, while profit for the year directly boosts equity. Collect exit tickets and remind students to complete the revision checklist for homework. Assign a worksheet to practice ratio calculations.