Lesson Plan

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Lesson Plan
Grade: Date: 18/01/2026
Subject: Business
Lesson Topic: current ratio: calculation and interpretation
Learning Objective/s:
  • Define the current ratio and identify its component items.
  • Calculate the current ratio using balance‑sheet figures.
  • Interpret the ratio against industry benchmarks and trend data.
  • Evaluate the limitations of the current ratio as a liquidity measure.
Materials Needed:
  • Projector or interactive whiteboard
  • Sample balance‑sheet extracts (printed or digital)
  • Calculation worksheet
  • Calculator or spreadsheet software
  • Whiteboard markers
 Introduction:
Begin with a quick poll: “Which financial statement tells us whether a company can pay its short‑term bills?” Review prior learning on assets and liabilities, then state that today’s success criteria are to compute the current ratio accurately and to critique its meaning.
Lesson Structure:
  1. Do‑now (5'): Students list current assets and liabilities from a given balance‑sheet excerpt (check understanding).
  2. Mini‑lecture (10'): Explain the formula, components, and walk through a worked example (demonstration).
  3. Guided practice (15'): In pairs, calculate the current ratio for a second company using the worksheet; teacher circulates with probing questions.
  4. Interpretation activity (10'): Groups compare their ratios to industry benchmarks, discuss high/low implications, and note limitations.
  5. Quick quiz (5'): Exit ticket – “If a firm’s current ratio falls from 1.8 to 0.9, what does this suggest?” (formative assessment).
Conclusion:
Recap that the current ratio measures short‑term solvency but must be interpreted with context and awareness of its limits. For homework, students will locate a real company’s balance sheet, compute its current ratio, and write a brief comment on the result.