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 4 Module 10
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
adoreeramos1980@gmail.com

Review of Financial Statement Preparation, Analysis,

and Interpretation Part 5

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 efficiency

 Solve efficiency/activity ratios (accounts receivable turnover, average collection period, average
age of AR, or days sales outstanding, inventory turnover, average age of inventory or days in
inventory, accounts payable turnover, average age of payables, average payment period, or days
in accounts payable, total asset turnover, operating cycle, and cash conversion cycle.

 Analyze, interpret, and compare the efficiency ratios of sample companies.

Lesson Proper

Activities
1. Consider the following financial statement and compute the ratios

the beginning inventory is P 247,000

a) Accounts receivable turnover

b) Average collection period

c) Inventory turnover

d) Average age of inventory

e) Accounts payable turnover

f) Average payment period

g) Total asset turnover

h) Operating cycle

i) Cash conversion cycle

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