Senior High School 11

ENTREPRENEURSHIP
Quarter 2 – Module 9

Generate an Overall
Report on the Activity

Second Quarter, Module 9, Week 9

Generate an Overall Report on the Activity

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Content Standard : The learner demonstrates understanding of
concepts, underlying principles, and processes of
starting and operating a simple business.
Performance Standard : The learner independently or with his/her
classmates starts and operates a business according
to the business plan and presents a terminal report
of its operation.
Competencies : Produce an Overall Report on the activity of the
business.
Learning Outcomes : Upon the completion of the given unit, the SHS
learners are expected to write an evaluation of the
business from the overall report of its activity.

What I Know

Identification. Copy each term in the box on the space with the corresponding
details. Write the correct answers clearly in a separate sheet.

Debt to Asset Debt to Equity Financial leverage

Gross margin Interest Coverage Net profit margin
Profitability ROI (return on investment)

There are two (2) major types of business metrics on Financial Ratios.

1. ___________________________ratios
As a business owner, you need to know how profitable your company is. Usually, a
higher ratio indicates a healthier business.
The following are common profitability ratios:

The ratio compares your gross margin Gross Profit / Total Revenue 

to its net sales in business. This ratio =
measures how well you sell inventory. 2._________________________________
The gross profits are the total earnings
minus the cost of goods sold (COGS, or
the expenses that go directly into
operations).

The margin shows how much of your (Total Revenue - All Expenses) /
earnings turn into profit. Use this Total Revenue
formula: =
3.____________________________________

It shows how successful your (Gain from Investment - Cost of

investments are. Investment) /
Cost of Investment
=

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 4.____________________________________

5._______________________________ ratios are used to look at how much business

capital comes from debt. They can also assess how well your business pays debts.
The following are common ratios:

It measures the percentage Total Debt / Total Assets

of assets financed with debt. =
The fewer assets you acquire with debt, 6.________________________________________
the better.

The more debt you have compared to Total Debt / Total Equity
equity, the riskier you are to lenders =
and investors. Use the following formula 7._______________________________________
to find your debt to equity ratio: 

The ratio shows how easily your Earnings Before Interest and Taxes
business can pay interest expenses on (EBIT) / Interest Expenses
debts. =
8._______________________________________
Earnings before interest and taxes are
your net profits plus interest and tax
expenses.

What I Need to Know

You are to prepare an Overall Report of Activities in the Business for

your simple home-based business application.

In this key move you are expected to:

 track details of the activities in the business
 write details of the activities in the business
 make an overall report of the activities in the business

What’s In

Application. Refer to the ledger of the cash account you did in Quarter 2 -
module 8 as your guide. Write the answer clearly on a separate sheet.
Prepare a one (1) week period ledger on all accounts of your simple
home-based business.
1. assets
2. liabilities
3. capital
4. revenues
5. expenses

Template of the three (3) columns General Ledger1 (GL1).

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Account name NO.
Date Items PR Debit Credit Balance
2020

What’s New

Take an active overall business role. See each balance at its normal one.

Classification. Indicate positive (+) sign for increase and negative (-)
sign for decrease correspondingly for each account type. Write each correct
answer clearly on a separate sheet.

ACCOUNTS DEBIT (+/-) CREDIT (+/-)

Assets
1. Cash
2. Accounts Receivable
3. Inventory
4. Equipment
5. Vehicle
Liabilities
6. Accounts Payable
7. Sales Tax Payable
8. Unearned Revenue
Equity
9. Capital
10. Drawing
Revenue
11. Sales Revenue
12. Service Revenue
Expenses
13. Cost of Goods Sold
14. Utilities Expense
15. Banks fees
Expense

What Is It

What activities are performed by the business?

The forms of business discussed earlier in Quarter 1- module 2 are
grouped by the type of business activities they perform such as services,
merchandising, and manufacturing.

Why are business reports on business activities important?

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 Reports make it easier to analyze your
business and evaluate its overall health. It is an
indication if you are meeting your goals. The
information will allow you to strategically plan.

What goes into a business activities report?

The business report has one thing, data. The data is
focused on a specific part of your business, in a way
that is easy to understand.
Formal business reports are useful as they include
written analysis with the data.
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Steps to get the most out of your business reports:

1. Identify the issue, go into your reporting knowing what you want to
figure out.
Example: Sales seem slower at a certain day of the week.

2. Explore the issue, start looking at the data from every possible angle.
The more ways you look at the data, the more insights you might be able
to glean.
Example: Materials run out at the highest point of sales, materials
are only available from supplier at certain days of the week. The
schedules of purchase and sales demand do not match.

3. Make inform recommendations, you need to decide how you can either
fix the issue or in some cases, you might even recommend doing nothing.
Example: Book advance orders on the slow sales day and increase
stock purchase in preparation for high sales day.

You can create a business report for any part of your business, but here are
three types that are particularly useful:

Three (3) categories of must-have in a business report

1. Sales reports
Sales are the lifeblood of your business. You can create and adjust your
sales strategy.
2. Inventory reports
Inventory reports are updated regularly, to know inventory needs.
3. Payroll reports
Your most valuable resource as a business owner is your team. Payroll
reports allow you to review on the uprightness of the pay you have given. You
do pay yourself as well.

USE THE NORMAL BALANCE OF ACCOUNTS IN BUSINESS TO CHECK ON

REPORTS.
The normal balance of any account is either a debit or credit guided by
the accounting equation. It is in the normal balance that accounts increase
in values otherwise, it is a decrease in value or negative balance.

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 Although each account has a normal balance in practice it is possible
for any account to have either a debit or a credit balance depending on the
bookkeeping entries made.
The benefit of knowing the normal balance is that if an account shows
a balance other than its normal balance, it is a hint that there might be an
error on the account and further investigation may be needed.
When an account has a balance that is opposite the expected normal
balance of that account, the account is said to have an abnormal balance or a
negative balance.  Here is the table on the balance of accounts:

ACCOUNTS DEBIT (+/-) CREDIT (+/-)

Assets + increase - decrease
Liabilities - decrease + increase
Equity - decrease + increase
Revenue - decrease + increase
Expenses + increase - decrease

The overall report on business activities are mainly financial. It is a

financial reporting that uses financial statements and ratios to disclose
financial data that shows the financial health of a business over a period.

Financial Ratios show how the business is working.

The two (2) major types of business metrics are profitability and
financial leverage ratios.

1. Profitability ratios.
As a small business owner, you need to know how profitable your company
is. Usually, a higher ratio indicates a healthier business.
The following are common profitability ratios:
Gross margin ratio. Gross Profit / Total Revenue 
The gross margin ratio compares your = Gross Margin Ratio
gross margin to its net sales in business.
This ratio measures how well you sell The gross profits are the total earnings
inventory.
minus the cost of goods sold (COGS, or
the expenses that go directly into
operations).

Net profit margin. (Total Revenue - All Expenses) /

The net profit margin shows how much Total Revenue = Net Profit Margin
of your earnings turn into profit. Use this
formula to find the net profit margin:

ROI (return on investment). (Gain from Investment - Cost of

Return on investment  Investment) /
shows how successful your Cost of Investment = ROI
investments are.

2. Financial leverage ratios.

Financial leverage ratios are used to look at how much business capital
comes from debt. They can also assess how well your business pays debts.
The following are common financial leverage ratios:
Debt to asset ratio.     Total Debt / Total Assets

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 The debt to asset ratio measures the = Debt to Asset Ratio
percentage of assets financed with debt.
The fewer assets you acquire with
debt, the better.
Debt to equity ratio. Total Debt / Total Equity
The more debt you have compared to = Debt to Equity Ratio
equity, the riskier you are to lenders
and investors. Use the following
formula to find your debt to equity
ratio: 
Interest coverage ratio. Earnings Before Interest and Taxes
The interest coverage ratio shows (EBIT) / Interest Expenses
how easily your business can pay = Interest Coverage Ratio
interest expenses on debts.
Earnings before interest and taxes are
your net profits plus interest and tax
expenses.

What’s More

Application. Refer to the one (1) week period ledger on all accounts of your
simple home-based business.

a. Use the details to for one (1) profitability ratio of your choice. Write the
answer clearly on a separate sheet.
b. Use the details to for one (1) financial leverage ratio of your choice. Write the
answer clearly on a separate sheet.

What I Have Learned

Brief Essay. Use the details of your simple home-based business on the
financial ratios to note down three (3) sentences as an Overall Report of
Business Activities.
Write the answer clearly on a separate sheet.

What I Can
Do

Be positive that errors are negative in the Overall Report of Business Activities.

Brief Essay. Use the details of your simple home-based business to check on
the normal balance of accounts in the ledger to note down three (3) sentences
as an Overall Report of Business Activities that highlight on sales, inventory
and payroll to yourself. Write the answer clearly on a separate sheet.

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 Assessment

Actively evaluate your business reporting state!

MULTIPLE CHOICE: Read each item carefully. Write the corresponding letter
of the correct answer in a separate sheet.

1. Businesses are grouped. How are businesses grouped?

A. business activities that they perform
B. business discounting that they perform
C. business productions that they can perform
d. business supporting that they are to perform

2. Reports on business activities are important. Which is excluded in

importance?
A. Reports evaluate its overall health in meeting goals.
B. Reports gives information that will allow you to strategically plan.
C. Reports make it easier for you to analyze your business to improve it.
D. Reports safeguard the information of the state and strategy in
business.

3. A lot can be known from the business report. What is in the business report?
A. aid B. bond C. data D. forms

4. Formal business reports are useful. Why are the business reports useful?
A. Business reports include access to system.
B. Business reports include details on guesswork.
C. Business reports include printed articles on media.
D. Business reports include written analysis with the data.

5. Steps are used in business reports. Why are steps used?

A. It is to finish the business reports.
B. It is to get the most out of your business reports.
C. It is to hide the information from the business reports.
D. It is to keep the analysis within these business reports.

6. Three (3) important steps are done in business reporting. Which is excluded?
A. Explore the issue. B. Identify the issue.
C. Keep out of the issue. D. Make inform recommendations

7. There are must-have business reports. Which is an exclusion?

A. Inventory Reports B. Payroll Reports given
C. Sales Reports filed D. Removal Reports saved

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8. Each account title has a normal balance. Which could be the normal
balance?
A. It is both debit and credit. B. It is dependent on the debit.
C. It is fixed all at credit side. D. It is only the debit of the accounts.
9. The normal balance is guided. How is it guided?
A. It follows accounting balance. B. It follows accounting equation.
C. It follows accounting formulas. D. It follows accounting ratios
used.

10. The Overall Report on busines activities use financial statements and ratio.
Why are these disclosed?
A. It is a field data on a field of business.
B. It is a file data on a filing for the business.
C. It is a final data on the final activity of a business.
D. It is a financial data on the financial health of a business.

11. Financial Ratios are about the financial performance of the business. Which
are financial ratios?
A. Performance and label ratios B. Professionality and leave
ratios
C. Profitability and leverage ratios D. Punctuality and level tip
ratios

12. A business owner need to know if there is profit using the ratio. How is
profit shown in the ratio?
A. Usually, a higher ratio indicates a basic business.
B. Usually, a higher ratio indicates the even business.
C. Usually, a higher ratio indicates a finishing business.
D. Usually, a higher ratio indicates a healthier business.

13. Debts in the business must be assessed. How are debts assessed in the
ratio?
A. It assesses if the business avail of debts.
B. It assesses if the business charges debts.
C. It assesses if the business fines all debts.
D. It assesses if the business pays the debts.

14. Apply the Gross Margin Ratio on the two-day transactions of Cocone Nut
Oil. The materials cost is Php 800.00 and Sales amounted to Php 1,800. How
much is the Gross Margin Ratio?
A. 0.54 B. 0.55 C. 0.56 D. 0.57

15. Apply Debt to Asset Net Profit Margin on the two-day transactions of Cocone
Nut Oil. The materials cost is Php 800.00, phone card cost is Php 250.00 and
Sales amounted to Php 1,800. How much is the Net Profit Margin?
A. 0.39 B. 0.40 C. 0.41 D. 0.42

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 Additional
Activities

Do the right sort in your Business report.

Brief Essay. Write clearly on a separate sheet of paper for your response.

a. How will you do the practical daily living use of what you have learned from
this module? Include how it will allow you to promote a positive and earnest
attitude. Answer aptly in one (1) sentence.

b. Ask-all-You-can about what you took up here. I will write back and post
answers online.

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For inquiries or feedback, please write or call:

Department of Education - Bureau of Learning Resources (DepEd-BLR)

Ground Floor, Bonifacio Bldg., DepEd Complex

Meralco Avenue, Pasig City, Philippines 1600

Telefax: (632) 8634-1072; 8634-1054; 8631-4985

Email Address: [email protected] * [email protected]

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