Introduction

5th Edition

Efficiency ratios is what we learn in this chapter. These calculations include stock turnover, debtor days, creditor days and the gearing ratio.

The stock turnover calculation measures how fast a business sells their inventory of products.

The debtor days calculation measures how long it takes for a business to collect its debts from customers.

The creditor days calculation measures how fast a business can pay back its debts.

The gearing ratio calculation shows the percentage of debt that is included in a company's bank account.



Course curriculum

  • 1

    Course 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.

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

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

    • Welcome IB Business Management Student

    • Chapter Work Cycle = This Is What We Are Doing In Class & For Homework Every Day

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

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

    • Your Quarter Grade

  • 2

    Your Notebook Is Your Most Important Weekly Grade & Prepares You For The May Exams

    • New 3.6 Chapter = 7 Headings (Title Your New Page: "Efficiency Ratio Analysis")

    • Hey There! You Will Need A New Blank IB BM Composition NotebookBy The End Of This Chapter.

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

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

    • How To Draw A Spider Map

    • LOOK: Page-By-Page Visual Instructions For Earning a 100% On Every Notebook Chapter. (NEW For 2024)

    • Video: Take A Tour Of A Business Management Composition Notebook

    • This Is How Your Notebook Pages Will Be Graded

    • Notebook Checklist & Reflection Sheet- Print, Complete, And Staple Onto The Last Page Of Your Chapter Notes BEFORE Scoring Day. It's Best To Pick Up This Blue Color Checklist In Class After We Finish The Chapter Review.

  • 3

    "RESOURCE BANK" = Topic Lessons (24) Begin Below this Point:

    • Hey There! You Will Need A New Blank IB BM Composition NotebookBy The End Of This Chapter.

    • What is the Resource Bank?

    • RB = 8 Sections With 24 Posts (= 2 RB Days + HW)

    • SL Learns HL Content

    • What You Should be Able to Do By the End of this 3.6 Chapter

  • 4

    Efficiency Ratios

    • Key Terms: Creditor vs. Debtor

    • Key Term: Ratio Analysis

    • Video: Five Financial Ratios Explained In 5 Minutes

    • Video: What Are Receivables and Payables?

    • Exam Tip: Five Major Limitations Of Financial Ratios

  • 5

    Stock Turnover (also called Inventory Turnover)

    • Video: What Is Inventory Turnover?

    • Video: How To Calculate Stock Turnover

    • Video: The Inventory Turnover Ratio

    • Video: Advanced Explanation Of The Value Of Calculating And Understanding The Inventory Turnover Number (Write it all down and say this on the exam!)

    • Exam Tip: A Worked Out Example Of A "Stock Turnover" Question

  • 6

    Debtor Days

    • Video: How To Calculate Debtor Days

    • Video: "Receivables Days/Debtor Days" Ratio

    • Video: 5 Tips For Improving Debtor Management - Take notes and say this on the exam

    • Exam Tip: A Worked Out Example Of A "Debtor Days" Question

  • 7

    Creditor Days

    • Video: Creditor Days (365 calculation)

    • Video: "Creditor Days/Payables Days" Review

    • Exam Tip: A Worked Out Example Of A "Creditor Days" Question

  • 8

    Gearing Ratio

    • Video: Gearing Ratio

    • Video: The Ratio Analysis Called "Gearing"

    • Exam Tip: A Worked Out Example Of A "Gearing Ratio" Question

    • Exam Tip: How To Change The Gearing Ratio

    • Key Term: Efficiency vs Liquidity

    • Handout: Is A High Gearing Ratio Always Bad?

  • 9

    Insolvency vs. Bankruptcy

    • Bankruptcy Is A Legal Condition & Insolvency Is A Financial Situation (Stop Watching At 2:30 Minutes)

  • 10

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

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

    • CCES Assignment: Write 4 CCES Impact Statements For This Chapter Following The Given Model

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

    • Hey There! You Will Need A New Blank IB BM Composition NotebookBy The End Of This Chapter.

  • 11

    Let's Do Some Case Studies

    • Visual Of Case Study Day 1 Process

    • Day 1 Participation Requirements During Sharing

    • Instructions for Analyzing Case Studies

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

    • Old Command Terms List = Rules for Answering Test Questions

    • New 3.6 Assigned Case Studies (5 in Total)

    • Show Your Teacher Your Completed Case Studies Then ...

    • Visual Of Case Study Day 2 Process: Show & Tell Your Presentation- Don't Pass It Around- Give Command Term Definitions.

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

    • Hey There! You Will Need A New Blank IB BM Composition NotebookBy The End Of This Chapter.

  • 12

    Review

    • WATCH: 3.6 Chapter Review

    • *Study This Handout: How To Interpret Ratios

    • Instruction Sheet for Review Assignment

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

    • New 3.6 Review Worksheets With 7 Tasks 1-15 M/C (Title The Top Of A New Page. Then Label The Tasks And Write The Answers In Your Composition Notebook)

    • Put Away Your Pen & Pencil On Review Day- Only Have A Color Pen On Your Desk

    • 3.6 Quizlet

    • Have You Achieved the 3.6 Key Learning Outcomes?

    • You Are Almost Finished!

    • Video: Accountant Humor (Top 10 Reasons Why An Accountant Is Cooler Than You Think)

    • Don't Forget The Last Piece!

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

    • Memorize & Review These 3.6 Exam Formulas

    • AFTER THE 3.6 QUIZ- NO MORE SHARK TANK

    • Hey There! You Will Need A New Blank IB BM Composition NotebookBy The End Of This Chapter.

  • 13

    DO THIS NEW SECTION: 3.6 Exam Review & Practice: Do These Practice Questions Before Your May Exams (Don't Look At The Markscheme Until You Have Written A Complete Answer)

    • This Section Is Included In Your Notebook Grade. It's Additional 3.6 Practice For The May Exam.

    • Video: Giant Review Of Liquidity and Efficiency Ratios - Take Notes On This

    • Video: Quick Review Of The Limitations Of Ratio Analyses (You Need To Say This Along With Your Calculations) - Take Notes On This Again

    • Handout: On The IB Exam Day You Get This Formula Sheet With ALL Of The Ratio Analysis Formulas! List The Names Of The Formulae Provided On Exam Day.

    • Be Able To Explain How A Business Can Improve Their Efficiency Ratios

    • Handout: Exam Tip & Review Assignment- Take Notes On This

    • Exam Practice: Stock Turnover & Debtor Days (= Efficiency Ratios) + Current Ratio (= Liquidity Ratio)

    • Hey There! You Will Need A New Blank IB BM Composition NotebookBy The End Of This Chapter.

  • 14

    Your Written IA Paper

    • Exam Tip: Practice The Ratio Calculations With Your IA Business :)

    • Bonus #1 An Excel Worksheet That Calculates The Financial Data For You

    • Bonus #2 A Blank Ratio Analysis Table To Use For Your IA Or EE

  • 15

    3.6 Quiz Scheduled

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

    • Visual: Quiz Day Schedule Of Activities

    • After This 3.6 Quiz Enroll In The Official IB BM May Exam Prep Course