Lesson Plan

• Describe the key profitability ratios (GPM, OPM, NPM, ROCE, ROE) and explain their significance.
• Analyse a set of published accounts to calculate these ratios and identify profitability issues.
• Evaluate and recommend appropriate methods for improving profitability based on ratio analysis.
• Apply cost‑reduction and revenue‑growth strategies to a real‑world business scenario.
• Justify how changes to product mix, asset utilisation or financial management affect profit margins.

• Projector and screen
• Printed handout of profitability ratios table
• Case‑study worksheets with sample published accounts
• Scientific calculators
• Whiteboard and markers
• Laptop with spreadsheet software
• Flip chart paper for group presentations

Begin with a short video clip showing a well‑known company’s profit decline and ask students what might be causing it. Recall the profitability ratios they have previously studied and explain that today they will link those ratios to concrete improvement actions. Success will be measured by their ability to match a weak ratio with a realistic profitability‑boosting strategy.

1. Do‑now (5') – Quick quiz on definitions of GPM, OPM, NPM, ROCE, and ROE.
2. Mini‑lecture (10') – Review each ratio, show calculation examples on the projector.
3. Group activity (15') – Students calculate the ratios for a provided published‑account excerpt and highlight the weakest metric.
4. Whole‑class discussion (10') – Link the identified weak ratio to possible improvement methods; teacher records ideas on the board.
5. Case‑study work (15') – In groups, choose one improvement area (e.g., cost reduction, product mix) and design a brief action plan, recording it on the worksheet.
6. Gallery walk (5') – Groups display their action plans; peers give one constructive comment.
7. Check for understanding (5') – Exit ticket: state one ratio and one specific strategy to improve it.

Summarise how each profitability ratio points to a different lever for boosting profit. Collect exit tickets and highlight a few strong connections made by students. For homework, ask learners to select a real company, calculate two profitability ratios from its latest annual report, and suggest one realistic improvement action for each.