ACTS COMPUTER COLLEGE
P. Guevara Ave., Cor. A. Bonifacio St., Sta. Cruz, Laguna
www.actscc.edu.ph
Senior High School Department
BUSINESS FINANCE
Review of Financial Statement
Preparation, Analysis,
and Interpretation Part 3
Quarter 3 Module 8
Content Standards
The learners demonstrate an understanding of the process of preparing financial statements
as well as the methods or tools of analysis of financial statements, including horizontal
analysis, vertical analysis, and financial ratios to test the level of liquidity, solvency,
profitability, and stability of the business
Performance Standards
The learners will be able to solve exercises and problems that require financial statement
preparation, analysis, and interpretation using horizontal and vertical analyses, and various
financial ratios.
Student Name__________________________ Score____________________
Parents Signature_______________________ Date Submitted ____________
HOW TO USE THIS MODULE?
Good day my dear students!
Before starting the module, I want you to set aside other task/s that may disturb
you while enjoying the lessons. Read the simple instructions below to
successfully enjoy the objectives of this kit. Have fun!
1. Please do the OPENING PRAYER before proceeding to the entire lessons and
activities given for the day.
Please take a moment of silence and proceed to the opening prayer.
Opening Prayer
Heavenly Father, who by the light of the Holy Spirit, did instruct the hearts of the
faithful, grant that by the same spirit that we may be truly wise and ever enjoy His
consolation. All of these we pray in Jesus name. Amen.
2. Follow carefully all the contents and instructions indicated in every page of this
module.
3. Write on your notebook the concepts about the lessons. Writing enhances learning,
that is important to develop and keep in mind.
4. Perform all the provided activities in the module.
5. After finishing the module, make sure to submit this on the given schedule.
6. Once all the lesson and activities were accomplished, please do not forget to do the
CLOSING PRAYER.
Please take another moment of silence and proceed to the closing prayer.
If you encounter problems or difficulties in answering this module, please do not hesitate
to address your concerns to the responsible teacher. The contact number of the teacher
and the consultation hours are provided in this module. Please bear in mind that you
have someone that will guide and will help you in finishing your module.
Enjoy studying! Thank you, Keep safe and God bless!
Prepared by
Dr. Adoree A. Ramos
0919541389
[email protected] Review of Financial Statement Preparation, Analysis,
and Interpretation Part 3
Learning Competencies
You shall be able to:
Define the measurement levels, namely, liquidity, solvency, stability, and profitability.
Compute, analyze, and interpret financial ratios such as current ratio, working capital, gross
profit ratio, net profit ratio, receivable turnover, inventory turnover, debt-to- equity ratio, and the
like
Specific Learning Outcomes
At the end of this lesson, you will be able to:
Define liquidity
Solve liquidity ratios (current and quick)
Analyze, interpret, and compare the liquidity ratios of sample companies
Lesson Proper
Four Main Categories of Financial Ratios:
• Liquidity • Profitability • Efficiency • Leverage
Liquidity refers to the company’s ability to satisfy its short-term obligations as they come due. Refer
back to the household example to emphasize the meaning of liquidity.
Activities
• Current assets is PHP2,000, current liabilities is PHP3,500. What is current ratio?
• Inventory is PHP150. Accounts payable is PHP450. Cash and accounts receivable total PHP800. What is
the current ratio? Quick ratio?
• If current ratio is 1.7, what is the total accounts receivable if cash is PHP20,000, inventory is PHP7,500,
and accounts payable is PHP30,000.
• Cash is 30% of total current assets. If current ratio is 2.3, what is the new current ratio if total non-cash
current assets grow by 50%?
Compute the current and quick ratios of the following corporations
Well done! So, you have successfully completed the activities and tasks for this module. It is expected that
you have gained insights and meaningful experiences. What a great achievement! Again,
CONGRATULATIONS, KEEP SAFE AND GOD BLESS!
Closing Prayer
We give you thanks Almighty Father through your son Jesus Christ for all the benefits you have given us to
you who live and reign forever and ever. Amen.
Name of Teacher Contact No. Consultation Day Consultation Hours
Dr. Adoree Arjona Ramos 0915954138 Fridays 8AM-10AM
