Introduction

A ratio shows the relationship in quantity, amount, or size between two or more things. A ratio analysis is a tool used by a business to evaluate their financial statements and to  help with making business decisions. 

 

Profitability ratios are used to figure out a company’s ability to generate profit (very important if someone is thinking about buying an established business). You will need to know that the key terms “gross profit margin”, “profit margin”, and “ROCE” are calculations you can use to determine a company’s profitability.

 

Liquidity ratios tell a business what ability they have to pay off short term debts. The two calculations you will use to do that are called the “current ratio” and the “acid test ratio” (also called the “quick ratio”).

Course curriculum

  • 1

    Program Information & Support

    • Please Check Now That Your Phone Is In Your Bag. Please Stay For 40 Minutes Of Learning & Sign Out For The Bathrrom During The Last 5 Minutes of Class.

    • Only Use The Laptop Assigned To You. Return To Assigned Slot With No Slack Cord.

    • Please Don't Disrupt Our 40 Minute Work Cycle. Leave For The Bathroom During The LAST 5 MINUTES Of Class.

    • Supply Check Is On The First Resource Bank Day Of Each Quarter

    • How Well Are You Demonstrating The IB Learner Characteristics? Which Is Your Super Power & Which Presents The Greatest Challenge?

    • Do You Skip Class?

    • Fact Sheet Packet Of Class Policies- Please Scroll Through And Review Again

    • Meet Your Teacher: Dr. Eva Bogard

    • You Should Do An Internship Every Year Until You Graduate From College

    • Welcome IB Business Management Student

    • Here Is The Master Plan...

    • The IB BM Syllabus Consists Of 5 Units With A Total Of 40 Total Chapters ("Courses") That You Are Responsible For Learning

    • The Official IB Business Management Guide & Syllabus

    • The Full IB BM Textbook Is In TEAMS

    • Chapter Work Cycle =The Same 7 Day Format For Each Chapter. You Always Know What We Are Doing In Class & What Is Assigned For Homework.

    • DUE DATES & DEADLINES

    • Late With A Good Reason Is Still Late (Missing Work Submitted After 5 Calendar Days = 0%).

    • Your Makeup Day From An Absence Is The Following Class Day. Read Instructions Carefully & Review Policies When Absent.

    • Finished Early? Don't Pack Up! Do This ...

    • Finished Early? Keep Track Of Current Events In The Business World

    • Business Careers. Which Might Be A Good Fit For You?
  • 2

    The Notebook Project - A Daily Learning & Study Tool

    • Read The Rules For Your Notebook Project Before Every Grading Day. This Paper Must Be Stapled Onto The Inside Cover Of Each Composition Notebook

    • Your Notebook Project Helps You Build Strong Attention To Detail. This Is A Valuable Life Skill.

    • LOOK: Page-By-Page Visual Instructions To Help You Earn a 100% On Every Notebook Project.

    • A 100% Notebook Project Sample - Make Yours Just As Nice.

    • A 100% Notebook Project Sample - Compare Yours.

    • Notebook Checklist & Reflection Sheet (The Blue Sheet). Complete & Staple Onto The Last Page Of Your Chapter Notes BEFORE Scoring Day. This Blue Color Checklist Is Available In Class Or You Can Print It Yourself.
  • 3

    Start Your Notebook Project By Outlining This Chapter. Then Outline A Long IB Exam Answer Using A Spider Map.

    • New 3.5 Chapter = 13 Headings

    • Hey There! You Will Need A New Blank IB BM Composition Notebook In Class By The End Of This 3.5 Chapter.

    • Can You Listen To Music? Yes, But Only If You Follow All The Rules.

    • Review The Instructions For These Two Assignments.

    • LOOK: A Visual Guide For How To Create Your Outline. There Are Also Samples Posted In The Notebook Section Above. Great Attention To Detail = 100%

    • How To Draw A Spider Map

    • Video: Watch A Spider Map Being Created (Best Study Tool)

    • LOOK: This Is What A Great Spider Map Looks Like. Use This Sample As Your Model.
  • 4

    "RESOURCE BANK" = Topic Lessons (38) Begin Below this Point:

    • No Music On RB Days. Plug In Your Ear Buds. Place Them In Your Ears & Use Them To Listen & Learn From The Video Lessons.

    • What is the Resource Bank?

    • Review The Instructions For This RB Assignment.

    • Take Good Notes - These Posts Contain The Content You Want To Write On The IB Exams

    • LOOK: This Is What A Great RB Page Looks Like. Use This Sample As Your Model.

    • Important Detail: Remember To Highlight The RB Section Titles & Number All Posts Consecutively

    • RB = 6 Sections With 38 Posts (= 3 RB Days + HW)

    • What You Should Be Able To Do By the End Of This 3.5 Chapter
  • 5

    Ratio Analysis (= 2 Ratio Groups In This Chapter: Profitability & Liquidity)

    • Understand Porter's 5 Forces & Its Role In Analyzing Profitability

    • Remember: No Music On Resource Bank Days- Plug In Your Earbuds All Period & Listen Carefully To Each Video Lesson

    • What Is A Ratio?

    • Video: An Example Of The News Reporting Profitability

    • Video: Let's Review The Meaning Of "Working Capital"

    • Video: What Does Ratio Analysis Mean?

    • Video: What Is A Profit Margin?

    • Key Terms: What's The Difference Between Gross Profit and Gross Profit Margin? What's the Difference Between Net Profit and Net Profit Margin?

    • There Are 3 Ratio Groups & 5 Ratio Calculations On The IB Exams

    • Video: Short & Simple Explanation Of Ratio Analysis

    • Introduction To The 5 Calculations

    • How Do The 5 Ratio Calculations Fit Into The 3 Ratio Groups?

    • Video: Introduction To Ratio Analysis

    • Exam Tip: Understand The Why & How Of Ratios

    • Video: The Limitations Of Ratio Analyses

  • 6

    Calculating Profitability Ratios = GROSS PROFIT MARGIN

    • Video: What You Need To Know About The Gross Profit Margin

    • Visual: Profit Margin Basic Idea

    • Visual: What Exactly Does The Gross Profit Margin Tell Us? This Image Makes It Really Clear!

    • Video: Intro To Profitability Ratios (Operating Profit Is Not On Our Syllabus But It IS Used In The Real World)

    • Video: Deep Explanation Of Gross Profit Margin
  • 7

    Calculating Profitability Ratios = NET PROFIT MARGIN

    • Video: Very Quick Explanation Of The Net Profit Margin

    • Video: Full Example Of How To Calculate Net Profit

    • Visual: What Exactly Does The Net Profit Margin Tell Us? This Image Makes It Really Clear!

    • Handout: How To Increase Gross And Net Profit Margins & What Happens When You Do

    • Exam Tip: Profit Margins & A Balanced Response

    • BONUS RATIO: Operating Profit Margin Calculation (You May Use This On Your IA & EE & IB Exams)
  • 8

    Calculating Another Profitability Ratio = Return On Capital Employed (ROCE)

    • Key Term: ROCE

    • Video: A Business Teacher Explains ROCE

    • Video: Deep Explanation Of ROCE
  • 9

    Calculating Liquidity Ratios = CURRENT RATIO

    • Key Term: Liquidity Ratios

    • How To Explain "Liquidity Position" Question On An Exam Case Study

    • Video: Do You Understand What "Working Capital" Means?

    • Video: How To Calculate The Current Ratio

    • Video: What Are Liquidity Ratios?

    • Handout: 7 Ways To Improve Liquidity With A Closer Look At The Ratios
  • 10

    Calculating Liquidity Ratios = ACID TEST/QUICK RATIO

    • Visual: Liquid Assets vs. Non-Liquid Assets

    • Video: Acid Test Ratio Calculation

    • Handout: 4 Ways To Increase Liquidity Ratios

    • Video: A Fun Final Look At The Concept Of Liquidity
  • 11

    Profitability And Ratio Analysis & The CCES Concepts (Creativity-Change-Ethics-Sustainability)

    • Keep Your Earbuds Plugged In All Period & Listen Carefully To Each Video Lesson. No Music- It's Still A RB Day.

    • Video: How To Talk About "Opportunity Costs" & "Trade Offs" (= Strategy)

    • Video: ChatGPT4 Can Analyze Business Data

    • Review The Instructions For The CCES Assignment.

    • Read These CCES Definitions. If You Write Them On Your May Exams You Get Credit For Clear Evidence of "Synthesis & Evaluation"

    • Your CCES Assignment Begins At The Top Of A New NB Page: Title= CCES, Then Write 4 CCES Impact Statements For This Chapter Following The Model.

    • LOOK: This Is What A Great CCES Page Looks Like
  • 12

    Case Studies Assignment: This Is Your Practice For The Senior May IB Exams.

    • This Was The Real May 2024 IB BM Standard Level (SL) Paper 2 Exam. Get A Feel For It Now. Know That We Are Preparing For It Every Day In Class & For Homework So You Will Have The Best Chance Of Earning Your Best Score.

    • This Was The Real May 2024 IB BM Higher Level (HL) Paper 2 Exam. Get A Feel For It Now. Know That We Are Preparing For It Every Day In Class & For Homework So You Will Have The Best Chance Of Earning Your Best Score.

    • Exam Tip: Paper 2 Section B (2024-2028)

    • Step-By-Step Instructions For Doing Your Case Studies As Practice For Your Senior May Exams

    • LOOK: This Is What A Completed & Corrected Case Study Analysis Looks Like. Use This Sample As Your Model.

    • See How The IB BM Command Terms Are Organized

    • What Are Command Terms & Why Are They Important?

    • Old Command Terms List = Rules for Answering Test Questions

    • New Command Terms Definitions List (2024+)= Directions for Answering Test Questions

    • There Is Only 1 Case Study To Complete For The Chapter 3.5 Notebook Project

    • Finished Early? Review Worksheets Completed? Don't Pack Up! Do This ...
  • 13

    Review Day Activities + Presentation Day

    • Read & Follow These Review Day Instructions

    • Watch: 3.5 Chapter Review With Mr. L

    • What Should You Do If You Get Stuck On A Question? Don't Skip It! Do This...

    • LOOK: This Is What A Great Chapter Review Page Looks. Use This As Your Model.

    • Here Are The 3.5 Review Worksheets With 9 Tasks & 15 M/C. Title The Top Of A New Page. Then Label The Tasks And Write The Answers In Your Composition Notebook.

    • Presentation Day Instructions

    • AFTER THE REVIEW PRESENTATIONS = Exam Prep Notebook Notes

    • 3.5 Quizlet

    • Have You Achieved the 3.5 Key Learning Outcomes?

    • You Are Almost Finished!

    • Don't Forget The Last Piece!

    • Memorize & Review The 3.5 Exam Formulas
  • 14

    3.5 Quiz Day: Write Your Score In Your Notebook At The Top Of The Shark Tank Page In Red Ink.

    • Come Here On Quiz Day If You Are In The Classroom - Makeups Are On The Day You Return

    • NEW PROCEDURE!!! Shark Tank Replacement Work. After The 3.5 Quiz...

    • Blue Sheet Instructions. Pick Up A Blue Checklist & Reflection Handout To Complete & Staple Into Your Notebook

    • Due Today On Quiz Day (Before Midnight) Is Your Completed Chapter Notebook Project
  • 15

    Complete This Section In Your New IB BM Exam Prep Composition Notebook. Make A Divider. Start After Finishing The Worksheet's Review Tasks. Finish After Review Day Presentations. It Is Included In Your Final Exam Grade.

    • All Exam Practice Work Goes In Your Special "Exam Prep" Composition Notebook. Do It After Review Presentations & After The Chapter Quiz.

    • Write Answers For The 5 Ratio Analysis Calculations (This is also the intro you write for your quantitative analysis section on your IA)

    • Handout: The IB Exam Formula Sheet Has All 5 Of Your Profitability & Liquidity Ratio Formulas!

    • Video: Quick Review Of The Limitations Of Ratio Analyses

    • Visual: When You Look At This Picture, What Can You Write Off The Top Of Your Head About Each Ratio Analysis? (Write 5 Separate Paragraphs)

    • Exam Practice: Net Profitability, Profitability & ROCE (Write Your Answer Before Looking At The Markscheme)

    • Exam Practice: Current Ratio & Acid Test/Quick Ratio (Write Your Answer Before Looking At The Markscheme)

    • Quizlets For Exam Practice (No Written Work)