Lesson Plan

• Define profit margin and write its formula as a percentage.
• Calculate profit margin using revenue and net‑profit figures.
• Interpret a profit‑margin result by comparing it with industry averages and past performance.
• Identify common mistakes that distort profit‑margin calculations.
• Apply profit‑margin analysis to an exam‑style question, showing all steps.

• Projector or interactive whiteboard
• Printed income‑statement worksheet (with revenue & net profit)
• Calculators or spreadsheet software
• Whiteboard and markers
• Handout of a bar‑chart comparing margins (company vs. industry)
• Sticky notes for exit‑ticket responses

Begin with a quick poll: “What does a high profit margin tell you about a business?” Connect this to students’ prior knowledge of revenue and costs. Explain that by the end of the lesson they will be able to calculate, interpret and critique profit‑margin figures, and demonstrate the process in an exam setting.

1. Do‑Now (5'): Students calculate a simple profit margin from a given revenue/net‑profit pair on a sticky note.
2. Direct Instruction (10'): Present definition, formula, and step‑by‑step calculation using the projector.
3. Guided Practice (15'): Work through the provided income‑statement example together, filling in each calculation step on the board.
4. Interpretation Activity (10'): In pairs, students analyse the resulting margin using the bar‑chart handout and discuss two factors influencing the figure.
5. Common Pitfalls & Exam Tips (5'): Highlight typical errors and show how to structure a clear answer.
6. Independent Practice (10'): Students complete a short worksheet with a new data set, showing all steps and a brief interpretation.
7. Check for Understanding (5'): Quick quiz via Kahoot or show‑of‑hands on key concepts.

Summarise the formula, calculation steps, and how to link the margin to business performance. Students write one exit‑ticket answer: “What does a 17.5% profit margin suggest for this company?” Assign homework to find a real‑world company’s profit margin online and write a short paragraph comparing it to the industry average.