Summarize Argument
The author concludes that businesses must use a cash-flow statement. This is because expenses don’t always occur monthly, and only taking into account monthly expenses can cause businesses to overexpand.
Notable Assumptions
The author assumes that a cash-flow statement accounts for expenses that don’t occur monthly.
A
Only a cash-flow statement can accurately document all monthly expenses.
We need to know about non-monthly expenses.
B
Any business that has overexpanded can benefit from the use of a cash-flow statement.
We need to know why cash-flow statements are critical in the first place. Do they account for non-monthly expenses?
C
When a business documents only monthly expenses it also documents only monthly revenue.
We don’t care about revenue. We care about documenting non-monthly expenses.
D
A cash-flow statement is the only way to track both monthly expenses and expenses that are not monthly.
A cash-flow statement accounts for monthly and non-monthly expenses. This strengthens the author’s claim that a cash-flow statement solves the problem of accounting only for monthly expenses.
E
When a business takes into account all expenses, not just monthly ones, it can make better decisions.
Do cash-flow statements allow businesses to do this? We don’t know.