Lesson Plan

Resources → Subject Notes → Business → Notes
Lesson Plan
Grade: Date: 17/01/2026
Subject: Business
Lesson Topic: gross profit margin: calculation and interpretation
Learning Objective/s:
  • Describe the purpose and interpretation of the gross profit margin.
  • Calculate the gross profit margin using the standard formula from income‑statement data.
  • Analyse GPM results by comparing them with industry averages and previous periods.
  • Evaluate the limitations of the GPM and explain why additional ratios are needed.
  • Apply exam techniques to present GPM calculations and interpretations clearly.
Materials Needed:
  • Projector or interactive whiteboard
  • Printed income‑statement excerpts (e.g., XYZ Ltd data)
  • Calculator or spreadsheet software
  • Worksheet with practice calculations
  • Whiteboard markers and erasers
  • Revision checklist handout
 Introduction:

Begin with a quick poll: “What does a high profit margin tell you about a business?” Review that students already know basic profit concepts. Explain that today they will master calculating and interpreting the gross profit margin, and success will be demonstrated by accurately completing a worked example and explaining its significance.
Lesson Structure:
  1. Do‑now (5’) – students calculate a simple profit margin from a given figure to activate prior knowledge.
  2. Mini‑lecture (10’) – define GPM, present the formula, and discuss each component.
  3. Guided calculation (12’) – using XYZ Ltd data, walk through each step on the board while students follow on worksheets.
  4. Interpretation activity (10’) – small groups compare the 40% GPM with an industry average and list possible reasons for differences.
  5. Limitations discussion (8’) – whole‑class brainstorm on factors that can distort GPM.
  6. Exam‑tip practice (10’) – students write a short answer showing formula, calculations, and a concise interpretation; peer‑check.
  7. Quick revision quiz (5’) – exit ticket: one numeric problem and one interpretation question.
Conclusion:

Summarise that the gross profit margin shows how much of each sales pound remains after direct costs and that it must be interpreted alongside industry benchmarks and its limitations. For the exit ticket, students submit one calculation and one brief interpretation. Assign homework to calculate GPM for a second company from a textbook case study.