Educational Software for Teaching Financial Rations to Undergraduate Students in the Economic Administrative Field

Abstract

This paper presents a software that performs the functions of a financial calculator to automatically determine the financial analysis of an entity based on the Financial Information Standards in Mexico, and this application is aimed at students in the economic-administrative field, studying the higher educational level. This tool aims to support the learning process of students to reaffirm the financial criteria shown in each calculation. However, it offers the student the opportunity to perform the overall interpretation of the analysis carried out by putting their theoretical knowledge into practice, that is. this application only facilitates practicality in the calculations and reaffirms the knowledge in each calculation made; the interpretation of the complete analysis is the responsibility of the student.

1. Introduction

Teaching over time has been identified as a process of change using technological tools ranging from a desktop application and mobile device to the use of web 2.0 [1].

Therefore, in this context, it has been determined that the use of technological tools has provided an increase in the objective of teaching any area, highlighting the needs of users that allow identifying areas of opportunity to increase the possibilities of a significant teaching [2]. Information and communication technologies (ICT) have become increasingly friendly, accessible, and adaptable tools, which schools have adopted to improve personal and organizational performance. Different educational institutions have integrated the computer with the aim of carrying out pedagogical transformations, moving from a traditional teaching approach to one focused on more constructive learning. In addition, this incorporation of ICT in the educational field has generated significant benefits. On the one hand, it allows students to access a wide range of digital and online resources, which enriches their learning experience and fosters the acquisition of technological skills. On the other hand, schools benefit by promoting greater interactivity in the classroom, facilitating student participation, and fostering their autonomy and problem-solving ability [3].

In the same way, educational software supports teaching practice, serving as a support in the transmission of knowledge, and thus allowing the feasibility of teachers in teaching their activities, as well as students in correct learning given the support of the technological tools they have to function adequately in professional practice. In addition, these tools stand as an ideal means to foster in students the ability to learn to learn, preparing them to face the continuous changes that characterize the scientific-technological world today. In this sense, information and communication technologies (ICT) have offered new horizons in the training process, giving rise to applications such as e-learning, continuous learning, collaborative learning, and tutorials, which they carry new meanings and roles, for both students and teachers [4].

Referring to the economic-administrative field, in the business field, small businessmen have identified the need to simplify the teaching of some topics both for the understanding of theories, as well as the analysis of financial information that is exposed for decision-making [5]. In this context, it is considered that technologies can help improve significant learning for students in the economic-administrative field, as well as in decision-making in real situations. As established by [6], it is argued that teachers, by using new technologies, can free themselves from more routine tasks and focus on guidance activities. The current didactic models, which consider the use of new technologies and the media to enhance learning, entail new responsibilities on the part of educators within the school environment. From this perspective, the role of the teacher as a learning facilitator is highlighted, who is not only limited to transmitting knowledge but is also in charge of guiding and motivating students in their knowledge acquisition process. Actually, new technologies provide tools and resources that allow the teacher to personalize teaching, adapting it to the individual needs of students. This implies a shift in focus towards a more active and participatory pedagogy, in which educators become mediators of knowledge and promoters of the development of higher cognitive skills.

In addition, the media and digital technologies expand the possibilities of access to updated and relevant information, offering students learning opportunities beyond the classroom. Teachers can take advantage of these tools to promote inquiry, critical thinking, and collaboration among students, creating an enriching and stimulating learning environment.

Therefore, the context of the analysis of financial information is located as a first contact on the knowledge of an entity; however, this analysis is mostly carried out manually, not having particularly for the analysis a tool that allows automatically calculate the results and the criteria to be used in each financial ratio.

Regarding the students, it is difficult for them to memorize all the formulas that make up the financial ratios, and there is no free educational application in the market that can support this aspect. The study of the generation of business value has acquired a growing relevance in the business field, which underlines the importance of considering the drivers of value in the economic and financial evaluation. These value drivers play a fundamental role by providing crucial information for decision-making aligned with business objectives and strategies. It is essential to understand how these factors influence the generation of value of a company since this will allow a more precise and well-founded evaluation of its economic and financial performance.

According to [7], for students interested in acquiring knowledge about the main financial indicators for companies, this information is extremely important. Knowing and understanding the key financial indicators will allow them to assess the financial health of a company and analyze its performance in relation to its competitors and established goals. This understanding will provide them with a solid foundation for making informed and strategic business decisions. This task was carried out manually, and students prepared a form using pencil and paper as a support didactic tool for calculating financial ratios.

2. Literature review

The financial ratios or indicators appear in NIF-A3-Needs of users and objectives of financial statements [6]. According to NIF-A3, there are the following indicators:

Solvency. It refers to the excess of assets over liabilities and, therefore, to the adequacy of the accounting capital of the entities. It helps the user to examine the entity’s equity structure in terms of the mix of its financial resources, and the entity’s ability to meet its long-term commitments and investment obligations [8]. The solvency reasons include the following:

1. leverage ratios

   1. debt to equity

   2. debt to total assets

2. coverage ratios

   1. interest coverage

   2. coverage of fixed charges

   3. flow coverage

   4. debt coverage

Liquidity: It refers to the availability of sufficient funds to satisfy the financial commitments of an entity at maturity, that is. it refers to the ease with which an asset can be converted into cash for an entity. The financial ratios that are included in liquidity are the following:

1. working capital ratios

   1. liquidity test

   2. acid test

   3. immediate liquidity

   4. margin of safety

   5. defensive interval

Operating efficiency: It refers to the degree of activity, with which the entity maintains adequate levels of operation. It serves the user to evaluate the levels of production or performance of resources to be generated by the assets used by the entity; The reasons included in this category are:

1. reasons for short-term operating activity

   1. inventory turnover

   2. average age of inventories

   3. turnover of accounts receivable

   4. aging of accounts receivable

   5. turnover of accounts payable

   6. aging of accounts payable

   7. working capital turnover

2. ratios of investment activity in the long term

   1. rotation of productive assets

   2. total asset turnover

Cost-effectiveness: It refers to the entity’s ability to generate profits or increase its net assets. It serves the general user to measure the net income or changes in the net assets of the entity, in relation to its income, its accounting capital or equity, and its own assets. The financial ratios that appear in this item are:

1. ratios of return on income

   1. gross profit margin

   2. operating profit margin

   3. profit margin before financing and taxes

   4. profit margin before financing, taxes, depreciation, and amortization

   5. net profit margin

   6. earnings per share

   7. sales growth

   8. expenses

   9. marginal contribution

2. ratios of return on investment

   1. return of assets

   2. return of contributed accounting capital

   3. total capital return

The way in which financial ratios are applied in a general way is as follows:

Suppose you want to calculate the financial solvency of an entity, for which the formula to calculate this financial ratio is the following:

$$\text{Solvency}=\text{Assets}/\text{Liabilities}$$

Where these values are taken from the company’s balance sheet, they are subsequently replaced and the result obtained can be interpreted using one of the following criteria:

1. < 1. Bankruptcy.

2. < 1.5 Delicate.

3. = 1.5 Balanced.

4. >1.5 Nonperforming assets.

Example:

1. Solvency = 150,000/100,000.

2. Solvency = 1.5.

3. Criterion:

4. 1.5 = balanced

5. Interpretation:

In this case, the company is balanced, that is. it has an optimal value to face any financial crisis in case the scenario occurs. Also, the company has a good use of its assets. Therefore, of each peso of liabilities that the entity has, 1.5 Mexican pesos are available to pay its debts.

It should be noted that an analysis of the industry in which the company is located must also be carried out, to know its performance, with respect to the behavior of other companies [9].

On the other hand, for [10], software in teaching has been visualized as a consequence of the need for a more accurate interaction with the teaching of students, highlighting tools such as the internet and web 2.0 that alludes to the procedures of a successful teaching [11].

However, [12] states that the constant change in teaching has been channeled with technological trends, involving teachers to increase skills that can sustain their activity and making it an easier process for students to capture the learning acquired.

Elsewhere, [13] used usability criteria and pedagogical knowledge in order to model easy-to-use teaching tools, thus defining educational software as the teacher’s teaching process and facilitating student learning.

Likewise, [12] developed a software for students that analyzes diseases transmitted by vectors to promote knowledge in the Faculty of Nursing in Cuba, allowing feasibility in practice, constituting a support material for students and by staff working in primary health care [14].

With regard to [15] developed software for teaching mathematics to students with disabilities, it could be seen that the practice of this technology significantly increased the instruction of teaching these topics.

Nevertheless, according to [10] reported that teachers with more experience in teaching were willing to integrate computers or technology in teaching; another issue is access to technology and the resources needed to have a software to teaching because access to computers, software, and hardware are key elements to adopt and integrated technology.

Currently, there is a wide diversity of applications and approaches, in which calculators are used in research in the field of education. Many of these applications are aligned with teaching and learning activities at various educational levels. An example of this is the possibility for students to learn to program to address specific problems or to use the calculator’s built-in software as a digital environment that allows them to explore ideas and concepts. This variety of uses and approaches offers innovative opportunities for teaching and learning. By using calculators as educational tools, students can develop programming and problem-solving skills, allowing them to creatively and critically meet academic challenges. In addition, the use of the software built into the calculators provides a digital environment in which students can experiment, manipulate, and visualize mathematical and scientific concepts in an interactive way.

It is important to highlight that this diversity of approaches promotes student participation in their own learning process, fostering their autonomy and development of technological skills. In addition, the integration of calculators as educational tools contributes to the creation of more dynamic and motivating learning environments [16].

However, at the time of the pandemic, new technological skills were developed that allowed the development of educational software, which made it possible to identify differences between the effect of the computer on the instrumental skills and cognitive constructivism of the parents of the students [17]. At this stage of learning, in the context of the pandemic, society has been forced to modify its process of social interaction since it has been necessary to maintain a minimum distance of two meters to reduce the spread of the virus [18]. Before the pandemic, the direct exchange of opinions and experiences was common, as well as sharing spaces and objects in daily life, which contributed to the construction of affective, social, and behavioral ties, fostering a collective life.

Therefore, the new situation has demanded adaptive learning since we are facing a situation that is beyond our control. This implies that individuals must dedicate time to reason, analyze, and manage their internal resources, at the same time that they must maintain a distance from their peers and comply with social norms, such as biosafety protocols, due to the perception of vulnerability to a possible threat. Contagion [19].

It is worth to mention that after the COVID-19 pandemic, in some universities in Europe, it become a most the access to hardware/software and professional development in the use of ICT to teach mathematics, considering the student access as a critical aspect. In Mexico is an issue to solve by educational authorities [15].

On the other hand, it is worth mentioning that the General Directorate of Higher Education for Education Professionals, belonging to the Ministry of Public Education in Mexico (DGESPE), aware of the role played by the use of software at this educational level, points out that the expressions are used as synonymous terms: educational software, educational programs, and didactic programs, for computer programs created as a didactic medium, as well as stipulates the categorization of didactic programs: consultation, tutorials, exercise, simulation, playful, and microworlds. According to the functions of educational software, there are: informative, instructive, motivating, evaluative, investigative, expressive, metalinguistic, playful, and innovative.

3. Methodology and method

3.1 Methodology

This research is part of the field of applied research, with the aim of finding strategies that allow solving and explaining financial issues, as well as addressing the challenges that students face when making calculations in this area. In addition, this research has a qualitative approach since it seeks to identify the variables that influence the use of educational software in the teaching of students. In terms of depth, it is an explanatory investigation because the causes of the studied phenomenon are determined, which in this case will be the development of financial software since it seeks to determine the consequences of the application of this software in the educational development of students, as well as identifying the guidelines established by the financial reporting standards for Mexico. Regarding its purpose, it is also applied research because an innovation with respect to financial theory.

3.2 Method

Complementing these ideas, it is important to highlight that this type of applied and qualitative research is highly relevant in the educational field. By exploring strategies to solve and explain financial issues, it seeks to improve teaching and learning in this field. At the same time, when considering the variables that influence the use of educational software, it seeks to optimize its implementation and adaptation to the needs of students.

In addition, by adopting an explanatory approach, the implications and consequences of the application of this software in the educational development of students are analyzed. This information is essential to improve the quality of education and provide students with the necessary tools for optimal development in the financial field. Ultimately, this research seeks to contribute to the advancement and improvement of financial education, providing valuable information for decision-making in the educational field.

Likewise, this work was developed by an interdisciplinary work group with professional profiles in the economic-administrative field and information technology belonging to the Polytechnic University of Puebla. On the other hand, based on the classification proposed by the General Directorate of Higher Education for Education Professionals (DGESPE) an educational software with an informative functionality was designed and developed, since it is a didactic support tool that provides students with a specific topic using text, and through this information, it is transmitted to them a structured and organized vision of reality.

First, the analysis identified the fundamental requirements to develop an online command line interface that is simple and practical, which will allow the application to run with minimal requirements in windows environments.

In addition, it is important to highlight that the design of an efficient and easy-to-use command line interface is essential to guarantee the accessibility and usability of the application. By taking into account the minimum requirements and compatibility with the windows operating system, it seeks to maximize the availability of the tool and facilitate its execution in different computing environments (Figure 1).

Figure 1.

Flowchart for the financial calculator and logical sequence of the software.

The information was compiled taking as a reference the Financial Information Standards in Mexico, respecting the categories and formulas stipulated in these regulations. Regarding the coding of the calculator, it was developed in C language, as can be seen in Figure 2.

Figure 2.

Software pseudocode.

The implementation was on a windows platform, based on an intuitive design that does not require exhaustive training for the end user (students in the economic-administrative field). The interaction with the user assumes the command line, which is not difficult for the students.

4. Results

In the software development process, an exhaustive analysis of the formulas contained in the financial information standards was carried out, which were systematically codified. This initial step was essential to ensure the accuracy and proper implementation of the financial calculations in the application.

Subsequently, a detailed flowchart of the application was elaborated, with the purpose of establishing the logic and operation of the calculator. This flowchart made it possible to visualize in a clear and structured way the path of the data and the operations carried out by the financial calculator. In this way, a solid base for the development of the software was established, ensuring a logical sequence in the calculations and a correct performance of the tool.

It is important to highlight that the analysis of the financial formulas and the elaboration of the flowchart are crucial stages in the development of the application. These processes guarantee that the financial calculator meets the required standards of accuracy and functionality, providing users with reliable and useful results in the analysis of financial entities (Figures 3 and 4).

Figure 3.

Shows the result of the liquidity ratio and the criteria applied.

Figure 4.

Evaluation of two financial ratios: Liquidity and acid in a simultaneously way.

It should be noted that this calculator only performs the calculation corresponding to each reason and shows the respective criteria; the interpretation is at the discretion of the student or end user so that they can make the best decision according to the financial situation presented by each entity.

For the testing phase, it was tested with students from the economic-administrative field, selecting 100 students randomly so that they could interact with the program, where the following were analyzed: a) comprehension of the results produced by the calculator and b) usability in the developed interface (Figure 5).

Figure 5.

The interaction students with the financial calculator software.

Regarding the comprehension of the calculator results, the students expressed that they were understandable and clear.

Referring to the usability of the calculator interface, the students commented that the calculations are carried out quickly, and it is enough to enter the parameters requested by the software and click to obtain the result; the interaction is by command line so navigation between different windows is not required. In the same way, in the use of the software, it was described that the speed with which the results are obtained is important, as well as the interaction with it, where based on the result obtained, a suggestion is displayed if the result is positive or negative this, depending on the selected formula.

On the other hand, regarding the usability of the developed interface, although it was demonstrated that the ease of the financial calculator in the interaction with the user allowed the data that was displayed to remain visible to the user in order to compare results, the use of buttons for a more esthetic interaction in the software.

It is important to note that the current version of the financial calculator is considered a first iteration, in which it is actively working on improving its interface to achieve a friendlier experience and ease of use. Functionalities are being incorporated that will allow a more intuitive navigation, as well as options for displaying information in a clear and concise manner. In addition, the implementation of buttons that will speed up the interaction with the calculator is being carried out.

The purpose of these improvements is to provide users with a more accessible and easier-to-use tool, in which they can perform financial analysis efficiently and comfortably. The friendlier interface and ease of use will contribute to a greater usability of the calculator, allowing users to take full advantage of its features without difficulties.

5. Conclusions

After the pandemic the access to ICT become an issue in some universities over the world and Mexico is not an exception, that is why this software was created in order to try to help the students and the teachers in some mathematics calculus; specifically, students in the economic-administrative field can interact with an easy-to-use application [20]. The application is easy to install, it does not require many hardware resources, and the students report that is not difficult to interact to it, and it is very intuitive, such as command line.

It represents a support for them by automatically carrying out a process that previously required time since it was carried out manually, and it was also difficult for them to remember all the formulas and criteria used to evaluate the results of each financial ratio. With this software, students save time when performing the financial calculation of each reason and in each calculation, they can review the financial criteria to be used to reach a conclusion and make the appropriate decision for the financial entity.

Now, both students and teachers benefit greatly from this tool, since it allows them to perform the necessary calculations for financial analysis automatically. For the students support their participation in their own learning process, and for the teachers promote their development of technological skills. This automation saves time in the classroom, providing the opportunity to address other relevant topics within the area or explore different scenarios and practice decision-making by getting mixed results.

Summarizing Celaya’s work in 2007 [13], particularly regarding the utilization of novel technologies as educational support tools in the field of accounting in Mexico, such as accounting software and digital platforms, our study contributes significant value by furnishing innovative resources to student demographics necessitating such assistance.

Similarly, in the research conducted by Fholoinn and Fitzmaurice in 2021 [12], the exploration of digital technologies in higher education is undertaken, with a specific focus on scrutinizing their impact on student participation and comprehension. Our study exerts a tangible influence on student populations in Mexico, who stand to derive considerable benefits from the implementation of our software.

In a fashion reminiscent of the work by Rodríguez et al. in 2022 [16], wherein educational software for the instruction of communicable diseases is developed, thus affirming its utility as an interactive learning resource in the realm of medical education, our software effectively aligns with the objective of serving as an invaluable tool for advancing the comprehension of accounting topics.

A notable aspect is that the regular use of this tool allows an understanding of the general aspects of an organization’s finances, promoting the use of more estimates that allow a general knowledge of the financial health of an organization. This financial calculator allows students to reuse all the information from the generated calculations and use it to build a historical and/or global panorama of a certain business financial scenario, which contributes to the student’s learning in decision-making according to the desired financial strategy contemplate.