A judgement follows the evidence when each claim can be traced to a case fact or calculation, and the wording is no stronger than that evidence. This lesson gives you a short checklist to run on your own answer before you finish.
It completes the five skills of case analysis and evaluation, and it follows writing a conclusion tied to the objective.
What should you check?
- Source: can I point to the case fact or figure behind each claim?
- Size: does my claim match what the numbers show, not more?
- Strength: does my wording (“will”, “could”, “is likely to”) match how certain the evidence is?
- Missing evidence: have I ignored a fact that points the other way, or relied on an estimate without saying so?
Run these four questions on the conclusion first, then on each paragraph.
Worked example
Laundry Bersih Sdn Bhd in Bangi earns RM25,000 revenue a month, with total costs of RM18,500. The owner considers a second branch. It would add RM4,200 a month in fixed costs.
The owner estimates the branch would bring RM9,000 a month in revenue, and variable costs are 40% of revenue. A survey of 50 people found that 12 would use the new branch.
A student writes: “The second branch will double profit, so the owner should open it.”
Step 1, current profit: 25,000 − 18,500 = RM6,500.
Step 2, branch contribution: variable costs are 40% of 9,000 = RM3,600. Contribution is 9,000 − 3,600 = RM5,400.
Step 3, branch profit: 5,400 − 4,200 = RM1,200 a month.
Step 4, test “double”: doubling would need an extra RM6,500, but the estimate gives RM1,200. The claim is not supported.
Step 5, check the source: the RM9,000 is the owner’s estimate. The survey shows 12 of 50, which is 24%, but says what people would do, not what they did.
Corrected judgement:
“The second branch is likely to add about RM1,200 a month, if the owner’s RM9,000 revenue estimate is right, so it could be worth opening. This is far below doubling profit, and the estimate rests on a small survey of intentions, so the owner should test demand first.”
The cash and profit figures are simplified, as in the cash versus profit bridge, and real accounts include more items.
The mistake to watch for
A common slip is to state an estimate as a certain result, or to scale it up.
Mistaken answer: “24% of customers will use the branch, so sales will be high.”
The 24% comes from 50 people who said they might. It does not show what all customers will do.
The correction is to say what the evidence shows and where it stops: “In a survey, 12 of 50 (24%) said they would use it. This suggests some demand, but intentions can differ from behaviour.”
Check yourself
Try these on paper, then open each answer.
1. A café’s sales were RM20,000 in May and RM22,000 in June, after a RM1,500 social media advert. Variable costs are 60% of sales. A student writes “the advert was a success because sales rose.” Does it follow?
Show answer
Extra sales: 22,000 − 20,000 = RM2,000. Contribution is 40% of that: 0.4 × 2,000 = RM800. This is less than the RM1,500 cost. On these figures the advert did not pay for itself in June, so the claim does not follow.
2. Soften this claim to match an estimate: “The new product will earn RM30,000.”
Show answer
For example: “If the forecast is right, the new product could earn about RM30,000, although the figure is an estimate.”
3. Which conclusion follows from this evidence? Evidence: a cost saving of RM900 a month on a RM3,600 course. (a) “The course will make the firm the most profitable in the area.” (b) “The course should repay its cost in four months if the saving continues.”
Show answer
(b). 3,600 ÷ 900 = 4 months. Statement (a) goes far beyond the evidence.
Where this leads next
Now combine all five skills in the mixed practice set. If you also need to confirm which Cambridge course applies to you, see the 0450 to 0264 transition module. The ratios tool helps you test percentage claims.
Many students find this check easier when someone reads their reasoning aloud. Our teachers do that in online one-to-one Business tuition.