Lesson Plan

• Describe the purpose of the statement of financial position.
• Identify and classify assets, liabilities and equity components.
• Explain how the accounting equation underpins the statement.
• Analyse a sample statement to assess liquidity and solvency.
• Calculate and interpret key ratios (current ratio, debt‑to‑equity, ROCE) using the statement.

• Projector and screen
• Printed sample statement of financial position
• Worksheet with classification and ratio tasks
• Calculator for each pair
• Whiteboard and markers
• Handout summarising key ratios

Begin with a quick poll: “If you owned a business, what information would you need to know today about its health?” Connect this to students’ prior knowledge of assets and liabilities from previous lessons. Explain that by the end of the session they will be able to read a balance sheet and explain why it matters to internal and external stakeholders.

1. Do‑now (5'): Students answer a short quiz on distinguishing assets, liabilities and equity.
2. Mini‑lecture (10'): Explain the purpose, structure and accounting equation of the statement of financial position, using a projected diagram.
3. Guided practice (12'): In pairs, students label a printed sample statement, identifying each component; teacher circulates to check understanding.
4. Ratio activity (10'): Students calculate the current ratio and debt‑to‑equity ratio from the sample data and discuss what the results reveal.
5. Check for understanding (8'): Exit ticket – write one sentence summarising why the statement of financial position is essential for decision‑making.

Recap the key points: the statement provides a snapshot of assets, liabilities and equity, balances via the accounting equation, and underpins important financial ratios. Collect exit tickets and remind students to complete the homework – create a simple statement of financial position for a hypothetical small business using given figures.