| Lesson Plan |
| Grade: |
Date: 04/03/2026 |
| Subject: Business |
| Lesson Topic: the impact of business growth on ratio results |
Learning Objective/s:
- Describe why financial ratios are used to assess business performance.
- Explain how different types of growth affect profitability, liquidity, and solvency ratios.
- Calculate key ratios before and after growth using provided data.
- Analyse changes in ratio results and link them to specific growth activities.
- Evaluate potential risks and benefits of growth based on ratio analysis.
|
Materials Needed:
- Projector or interactive whiteboard
- Printed worksheets with financial data tables
- Calculator or spreadsheet software
- Handout of ratio formulas
- Markers and flip chart
|
Introduction:
Begin with a quick poll: “Which ratio do you think changes most when a company expands?” Review prior knowledge of basic profitability and liquidity ratios, then outline that today students will discover how growth reshapes these indicators and how to interpret the results accurately.
|
Lesson Structure:
- Do‑now (5'): Short quiz on ratio definitions and purposes.
- Mini‑lecture (10'): Explain why ratios matter and introduce the five ways growth can impact them.
- Guided example (15'): Work through Company Alpha’s Year 1 and Year 2 data, calculating GPM, NPM, CR, D/E, and ROCE.
- Group analysis (15'): Teams discuss each ratio’s change, link it to specific growth activities, and note any red flags.
- Pitfalls discussion (5'): Highlight common misinterpretations of post‑growth ratios.
- Checklist completion (5'): Students fill out the “Summary Checklist” to consolidate learning.
|
Conclusion:
Summarise how growth can improve some ratios while worsening others and stress the need for a balanced view. Students submit an exit ticket stating one ratio that improved and one that deteriorated, with a brief reason for each. For homework, they analyse a real‑world company’s annual report and write a short paragraph on the impact of recent growth on its key ratios.
|