Lesson Plan

• Interpret a simple statement of financial position and classify items as current/non‑current assets, liabilities or equity.
• Calculate the current ratio and equity ratio to assess solvency and liquidity.
• Use the calculated ratios to recommend one short‑term and one long‑term business decision.

• Projector and screen
• Printed handout of a simple statement of financial position
• Worksheets with the practice data set
• Calculators
• Whiteboard and markers
• Laptop with spreadsheet software (optional)

Begin with the question, “If a business has £300,000 in assets and £120,000 in liabilities, what does that indicate?” Recall the definitions of assets, liabilities and equity. Explain that today’s success criteria are to complete a balance‑sheet, compute key ratios and use them to justify business decisions.

1. Do‑now (5’) – Students answer the opening question individually and share quick thoughts.
2. Mini‑lecture (10’) – Review the three sections of a statement of financial position using a projected example.
3. Guided classification (15’) – Whole‑class activity to place each item from the worksheet into current/non‑current assets, liabilities or equity, filling a template on the board.
4. Ratio calculations (10’) – Students compute the current ratio and equity ratio with calculators and record results.
5. Decision‑making discussion (15’) – In pairs, analyse the ratios and propose one short‑term and one long‑term decision; pairs present their suggestions.
6. Exit ticket (5’) – Write one key insight learned and one remaining question on a sticky note.

Summarise how the balance sheet, ratios and the equity‑to‑asset relationship inform business choices. Collect exit tickets as a quick retrieval check. For homework, students will complete a new statement of financial position using a different data set and write a brief justification for a recommended investment.