Practical Numeracy Skills

Question 1

  The module on introduction to numeracy has been a source of valuable insight in my pursuit of the acquisition of knowledge. From the module, I have gained valuable knowledge on how to apply quantitative approaches in dealing with everyday aspects of life. The topics covered, such as percentages, decimals, and fractions, have provided additional knowledge and skills on alternative approaches one can use in numerically expressing different aspects. The module has provided critical insight into the application of percentages in communicating complex aspects. From the knowledge learnt on percentages, I will be able to effectively condense voluminous data using percentages, hence increasing the ease with which different individuals understand the issues learnt (Southall 2017).  Moreover, the module has also contributed to improved knowledge and skills on how fractions can be used in expressing proportions of a whole unit. Knowledge of fractions will improve my skills in making decisions related to the quantity of ingredients. 

During the module, I had an opportunity to participate in group activities, specifically the homework club.  The group was well organized, hence attaining its goal, which entailed completing group assignments by the tutor. My participation in the class homework club provided an opportunity to share knowledge and insight on different areas related to numeracy.  Participation in the homework club further improved my skills and knowledge on numeracy because of the opportunity to draw insight into calculating and applying different areas of numeracy, such as decimals, fractions, and percentages. From my participation in the group activity, I realized the need to improve my skills and knowledge in the application of statistical methods. In summary, the module significantly impacted my learning and development. 

Question 2 

Ratios constitute one of the components of numeracy and are used in comparing quantities in a definite order.  Ratios are used in assessing the proportion between two aspects. They provide an alternative and effective method through which individuals communicate comparisons.  Ratios are important numerical aspects and can be applied in different areas in real-life situations. One of the areas in which ratios are applied relates to accounting by calculating financial ratios. There are different financial ratios that businesses can calculate using their financial statements. One category of financial ratios that businesses can calculate includes the liquidity ratios. For example, a firm can use the financial ratios in calculating the current ratio, which is calculated by dividing a firm’s total current assets for a specific financial year by its total current liabilities.  For example, during its 2016 financial year, ‘Rex Limited ’’s balance sheet showed that the firm’s total current assets amounted to $ 2,450,000 while its total current liabilities amounted to $ 770,000. Using this information from the balance sheet, the company’s current ratio can be calculated as illustrated below. 

Current Ratio = Total current assets

           Total current liabilities

           = $ 2,450,000/ $ 770,000

           =3.18

The calculation above shows that Rex Limited has a current ratio of 3.18:1. Subsequently, the firm is capable of covering its current liabilities 3.18 times using its current assets.  Gough (2012) asserts that the rule of thumb in accounting stipulates that firms’ current ratio should be approximately 2:1. Thus, Rex Limited has an adequate level of assets to facilitate its operations.

References

Gou ,. 2012, FT guide to business numeracy; how to check the figures yourself, Pearson, K. 

London Southall, E, 2017, Yes, but why? Teaching for understanding in mathematics, Sage, New York.