Lesson Plan

• Describe the main financial efficiency ratios (inventory turnover, DIO, receivables turnover, DSO, payables turnover, DPO, CCC).
• Explain how each ratio reflects a company’s operational performance and cash‑flow health.
• Analyse published accounts to pinpoint inefficiencies and suggest improvement actions.
• Evaluate at least three improvement strategies (e.g., inventory management, credit control, supplier terms) and predict their impact on the ratios.
• Apply ratio calculations to a case study and propose steps to shorten the cash conversion cycle.

• Projector and screen
• Whiteboard and markers
• Printed handout of the ratio table
• Calculator worksheets
• Sample financial data sheet for XYZ Ltd
• Laptop with spreadsheet software (Excel/Google Sheets)

Begin with a quick poll: “How long do you think it takes a typical retailer to turn stock into cash?” Use the responses to highlight the importance of speed in cash conversion. Review briefly the ratios covered last lesson. State that today students will learn how to read those ratios and apply practical methods to improve them.

1. Do‑Now (5') – Students calculate a simple inventory turnover from a provided data set and share results.
2. Direct Instruction (10') – Teacher explains each efficiency ratio, shows formulas, and interprets typical values using the slide deck.
3. Guided Practice (12') – In pairs, students compute DIO, DSO, DPO and CCC for XYZ Ltd on worksheets; teacher circulates to check understanding.
4. Strategy Brainstorm (8') – Groups list improvement ideas for each ratio (e.g., JIT, credit checks, extended payment terms) and rank them by potential impact.
5. Application Activity (7') – Each group selects one strategy, adjusts the sample data accordingly, and recalculates the CCC to see the effect.
6. Check for Understanding (3') – Quick quiz via Kahoot/hand raise: “Which change would most reduce the CCC?”

Summarise how the ratios interlink and why improving one can affect the whole cash conversion cycle. Ask students to write one actionable improvement they could suggest to a real business (exit ticket). For homework, assign a brief report analysing a set of published accounts and recommending two specific efficiency‑enhancing measures.