Republic of the Philippines

Region XI
Department of Education
Davao del Norte Division
KAPALONG NATIONAL HIGH SCHOOL
Maniki, Kapalong, Davao del Norte

LESSON PLAN IN ENTREPRENEURSHIP 11

October 4, 2017
Content Standards The learner demonstrates understanding of concepts, underlying
principles, and processes of starting and operating a simple
business.
Performance The learner independently or with his/her classmates starts and
Standards operates a business according to the business plan and presents a
terminal report of its operation.
CODE CS_EP11/12ENTREP-0a-i-22
Learning 1. Manifest understanding of starting and operating a simple
Competency business.
The learners…
1.8 Identify where there is a profit or loss for a business.

I. OBJECTIVES
Along the 60-minute session, the students are expected to:
1. identify measures to evaluate the liquidity of the business;
2. compute for the different liquidity ratios;
3. appreciate the importance of knowing the liquidity of one’s business.

II. SUBJECT MATTER

Topic: Liquidity Ratios
Reference: Entrepreneurship in Philippine Setting for Senior High
School by Nick L. Aduana, pp. 306 – 313
Instructional Materials: Visual aids, Manila paper, Pentel pen, Chalk
Values Integration: Appreciation on the importance of knowing the liquidity
of one’s business

III. PROCEDURE
A. Preliminary Activities
1. Prayer
2. Greetings
3. Checking of attendance and Classroom Management
4. Review (5 minutes)
Each group will report their expenses, income, and profit for their enterprise last
Monday. After the reporting, the teacher will ask one (1) student to give a recap on the
discussion last Monday.

B. Lesson Procedure
1. Activity – Group Activity (20 minutes)
a. The class will be divided into six (6) groups.
b. Each group will choose their leader and secretary.
c. Each group will be given an activity sheet.
d. Based on the Trial Balance of Princess Merchandising, they will make a Balance
Sheet (They already made an Income Statement for Princess Merchandising last
meeting.) Afterwards, they will compute the following:
Group 1 and 2 – Current ratio and Acid test ratio
Group 3 and 4 – Receivable turnover and Average collection period
Group 5 and 6 – Inventory turnover and Average sales period
e. They will also answer the following questions:
Group 1 and 2 – What is the meaning of the current ratio and acid test ratio that you
 have computed?
Group 3 and 4 – What is the meaning of receivable turnover and average collection
period that you have computed?
Group 5 and 6 – What is the meaning of inventory turnover and average sales
period that you have computed?
f. They will write their answers in a Manila paper.
g. They will choose a representative from their group to report their output.

2. Analysis and Discussion (10 minutes)

a. How do you find the activity?
b. How did you compute for the current ratio, acid test ratio, receivable turnover,
average collection period, inventory turnover, and average sales period? What were
your considerations in computing these?

3. Abstraction (10 minutes)

a. How do we evaluate the liquidity of one’s business?
b. What do you think is the importance of knowing the liquidity of one’s business?

4. Application (10 minutes)

The students are already grouped for their business plan project. They will compute
for the liquidity ratios of their business. These are as follows; current ratio, acid test ratio,
receivable turnover, average collection period, inventory turnover, and average sales period. They
will based their computation on their Income Statement and Balance Sheet. They will write their
answers in a 1 whole sheet of paper.

IV. EVALUATION
The students are evaluated based on the group activity in the Application.

V. ASSIGNMENT
Write in your columnar book your enterprise’s expenses, revenues, and profits for this day.
Prepare to report your output tomorrow.

Prepared by:

APRIL JOY C. LASCUÑA

Teacher I

Inspected by:

GRACE MAE G. FLORES

Master Teacher II
 ACTIVITY SHEET

Procedure:
1) Make a Balance Sheet of Princess Merchandising based on their Trial Balance below:

2) Write the Balance Sheet of Princess Merchandising in the Manila paper. Your Balance Sheet must follow the
prescribed format (see example below).
3) After making the Balance Sheet, compute for the following:
Group 1 and 2 – Current ratio and Acid test ratio
Current Assets
Current Ratio=
Current Liabilities
Quick Assets
Acid Test Ratio=
Current Liabilities
Note: Quick Assets can be broken down as follows:
Cash on hand ₱ XXXXX
Cash in bank XXXXX
Petty cash fund XXXXX
Accounts receivables, net of ₱12,500 XXXXX
Notes receivable XXXXX
Total quick assets ₱ XXXXX
Group 3 and 4 – Receivable turnover and Average collection period
Average Net Credit Sales
Receivable Turnover =
Average Trade Receivables
Note: In case the income statement does not provide information on cash sales and credit sales, it is safe to
assume that all the sales in the income statement are credit sales. The average trade receivable is computed by
dividing the sum of the beginning and ending trade receivables. In the event that there are no available data on the
beginning trade receivable, the data on ending trade receivable are used to compute the receivable turnover, and it
is computed as follows:
Accounts receivables, net of ₱12,500 ₱ XXXXX
Notes receivable XXXXX
Total trade receivable ₱ XXXXX

360 Days
Average Collection Period=
Receivables Turnover

Group 5 and 6 – Inventory turnover and Average sales period

Cost of Goods Sold
Inventory Turnover =
Average Inventory
Note: The average inventory is computed by dividing the sum of the beginning and ending inventories. In case
there are no data on beginning inventory, the data on the ending inventory are used.

360 Days
Average Sales Period=
Inventory Turnover

4) After computing the required liquidity ratios, answer the following:

Group 1 and 2 – What is the meaning of the current ratio and acid test ratio that you have computed?
Group 3 and 4 – What is the meaning of receivable turnover and average collection period that you have
computed?
Group 5 and 6 – What is the meaning of inventory turnover and average sales period that you have computed?

5) Choose a representative from your group to report your output. You have 20 minutes to do this task.

ACTIVITY SHEET
Procedure:
1) Make a Balance Sheet of Princess Merchandising based on their Trial Balance below:

2) Write the Balance Sheet of Princess Merchandising in the Manila paper. Your Balance Sheet must follow the
prescribed format (see example below).

3) After making the Balance Sheet, compute for the following:

Group 1– Current ratio and Acid test ratio
 Current Assets
Current Ratio=
Current Liabilities
Quick Assets
Acid Test Ratio=
Current Liabilities
Note: Quick Assets can be broken down as follows:
Cash on hand ₱ XXXXX
Cash in bank XXXXX
Petty cash fund XXXXX
Accounts receivables, net of ₱12,500 XXXXX
Notes receivable XXXXX
Total quick assets ₱ XXXXX

4) After computing the required liquidity ratios, answer the following:

Group 1 – What is the meaning of the current ratio and acid test ratio that you have computed? How would you
interpret these data?

5) Choose a representative from your group to report your output. You have 20 minutes to do this task.

ACTIVITY SHEET
Procedure:
1) Make a Balance Sheet of Princess Merchandising based on their Trial Balance below:

2) Write the Balance Sheet of Princess Merchandising in the Manila paper. Your Balance Sheet must follow the
prescribed format (see example below).

3) After making the Balance Sheet, compute for the following:

Group 2 – Current ratio and Acid test ratio
 Current Assets
Current Ratio=
Current Liabilities
Quick Assets
Acid Test Ratio=
Current Liabilities
Note: Quick Assets can be broken down as follows:
Cash on hand ₱ XXXXX
Cash in bank XXXXX
Petty cash fund XXXXX
Accounts receivables, net of ₱12,500 XXXXX
Notes receivable XXXXX
Total quick assets ₱ XXXXX

4) After computing the required liquidity ratios, answer the following:

Group 2 – What is the meaning of the current ratio and acid test ratio that you have computed? How would you
interpret these data?

5) Choose a representative from your group to report your output. You have 20 minutes to do this task.

ACTIVITY SHEET
Procedure:
1) Make a Balance Sheet of Princess Merchandising based on their Trial Balance below:

2) Write the Balance Sheet of Princess Merchandising in the Manila paper. Your Balance Sheet must follow the
prescribed format (see example below).

3) After making the Balance Sheet, compute for the following:

Group 3 – Receivable turnover and Average collection period
 Average Net Credit Sales
Receivable Turnover =
Average Trade Receivables
Note: In case the income statement does not provide information on cash sales and credit sales, it is safe to
assume that all the sales in the income statement are credit sales. The average trade receivable is computed by
dividing the sum of the beginning and ending trade receivables. In the event that there are no available data on the
beginning trade receivable, the data on ending trade receivable are used to compute the receivable turnover, and it
is computed as follows:
Accounts receivables, net of ₱12,500 ₱ XXXXX
Notes receivable XXXXX
Total trade receivable ₱ XXXXX

360 Days
Average Collection Period=
Receivables Turnover

4) After computing the required liquidity ratios, answer the following:

Group 3 – What is the meaning of receivable turnover and average collection period that you have computed?
How would you interpret these data?

5) Choose a representative from your group to report your output. You have 20 minutes to do this task.

ACTIVITY SHEET
Procedure:
1) Make a Balance Sheet of Princess Merchandising based on their Trial Balance below:

2) Write the Balance Sheet of Princess Merchandising in the Manila paper. Your Balance Sheet must follow the
prescribed format (see example below).

3) After making the Balance Sheet, compute for the following:

Group 4 – Receivable turnover and Average collection period
 Average Net Credit Sales
Receivable Turnover =
Average Trade Receivables
Note: In case the income statement does not provide information on cash sales and credit sales, it is safe to
assume that all the sales in the income statement are credit sales. The average trade receivable is computed by
dividing the sum of the beginning and ending trade receivables. In the event that there are no available data on the
beginning trade receivable, the data on ending trade receivable are used to compute the receivable turnover, and it
is computed as follows:
Accounts receivables, net of ₱12,500 ₱ XXXXX
Notes receivable XXXXX
Total trade receivable ₱ XXXXX

360 Days
Average Collection Period=
Receivables Turnover

4) After computing the required liquidity ratios, answer the following:

Group 4 – What is the meaning of receivable turnover and average collection period that you have computed?
How would you interpret these data?

5) Choose a representative from your group to report your output. You have 20 minutes to do this task.

ACTIVITY SHEET
Procedure:
1) Make a Balance Sheet of Princess Merchandising based on their Trial Balance below:

2) Write the Balance Sheet of Princess Merchandising in the Manila paper. Your Balance Sheet must follow the
prescribed format (see example below).

3) After making the Balance Sheet, compute for the following:

Group 5 – Inventory turnover and Average sales period
 Cost of Goods Sold
Inventory Turnover =
Average Inventory
Note: The average inventory is computed by dividing the sum of the beginning and ending inventories. In case
there are no data on beginning inventory, the data on the ending inventory are used.

360 Days
Average Sales Period=
Inventory Turnover

4) After computing the required liquidity ratios, answer the following:

Group 5 – What is the meaning of inventory turnover and average sales period that you have computed? How
would you interpret these data?

5) Choose a representative from your group to report your output. You have 20 minutes to do this task.

ACTIVITY SHEET

Procedure:
1) Make a Balance Sheet of Princess Merchandising based on their Trial Balance below:

2) Write the Balance Sheet of Princess Merchandising in the Manila paper. Your Balance Sheet must follow the
prescribed format (see example below).

3) After making the Balance Sheet, compute for the following:

Group 6 – Inventory turnover and Average sales period
 Cost of Goods Sold
Inventory Turnover =
Average Inventory
Note: The average inventory is computed by dividing the sum of the beginning and ending inventories. In case
there are no data on beginning inventory, the data on the ending inventory are used.

360 Days
Average Sales Period=
Inventory Turnover

4) After computing the required liquidity ratios, answer the following:

Group 6 – What is the meaning of inventory turnover and average sales period that you have computed? How
would you interpret these data?

5) Choose a representative from your group to report your output. You have 20 minutes to do this task.