Financial literacy is a crucial skill in modern education, with the understanding of financial
statements such as income statements, balance sheets, and cash flow statements—forming a
central part of Business Studies in Kenya’s secondary school curriculum. Despite the
importance of these topics, students in public secondary schools in Nyeri Central Sub-County,
Nyeri County, have consistently performed poorly in financial statement-related areas. This
study aimed to examine the challenges affecting teaching and learning financial statements in
Nyeri Central Sub County Nyeri County.The research was guided by the Constructivist
Learning Theory, which emphasizes active, student-centered learning. A descriptive survey
design was employed, targeting Form Three Business Studies students and their teachers.
Data were collected from 66 students and 6 teachers across four purposively selected public
schools using structured questionnaires. The data were analyzed both quantitatively and
qualitatively using SPSS.The findings revealed that several factors hinder effective learning.
These include over-reliance on teacher-centered instructional methods, inadequate teaching
and learning resources such as textbooks and calculators, and large class sizes that limit
individual student support. Additionally, many students held negative attitudes toward
financial statement topics, often due to perceived difficulty or lack of relevance to real-life
applications.The study recommends the adoption of more interactive teaching methods,
integration of real-life examples, improved resource provision, reduction of class sizes, and
enhanced teacher training in financial literacy and pedagogy. Addressing these challenges
will require coordinated efforts from educators, school administrators, curriculum developers,
and policymakers.In conclusion, this research highlights the need for systemic and classroom-
level reforms to improve Business Studies instruction, with a particular focus on financial
statements. These improvements are essential for equipping students with the financial
knowledge and skills necessary for academic success and economic empowerment.