Lesson Plan

• Describe the purpose of liquidity ratios and typical target ranges.
• Analyse causes of poor liquidity in a business.
• Evaluate at least three methods for improving liquidity and predict their impact on cash flow.
• Apply a step‑by‑step plan to monitor and adjust liquidity improvement actions.

• Projector and screen
• Whiteboard and markers
• Handout of liquidity ratio tables and improvement methods
• Calculator or spreadsheet software
• Sample financial statements (printed)

Begin with a quick poll: Which well‑known companies have faced cash‑flow problems? Review the definition of liquidity and recall the current and quick ratios studied last week. Explain that today’s success criteria are to identify liquidity issues and propose realistic improvement actions.

1. Do‑now (5') – Students calculate current, quick and cash ratios from a sample statement and note any that fall outside target ranges.
2. Mini‑lecture (10') – Recap liquidity concepts and introduce common causes of poor liquidity.
3. Group activity (15') – Teams analyse a case study, identify the main liquidity weakness and select three improvement methods from the list.
4. Strategy planning (10') – Each group creates a short action plan with measurable targets and timelines; share with class.
5. Whole‑class discussion (5') – Teacher highlights key points, addresses misconceptions, and links actions to cash‑flow forecasting.
6. Check for understanding (5') – Exit ticket: write one specific step your business would take to improve liquidity and the expected cash impact.

Summarise how effective cash management, receivables acceleration, and inventory control can boost liquidity. Students complete an exit ticket stating their chosen improvement and predicted benefit. For homework, assign a brief report analysing their own household budget for liquidity gaps and proposing two corrective actions.