Explores the five fundamental factors (the Way, seasons, terrain, leadership, and management) and seven elements that determine the outcomes of military engagements. By thinking, assessing and comparing these points, a commander can calculate his chances of victory. Habitual deviation from these calculations will ensure failure via improper action. The text stresses that war is a very grave matter for the state and must not be commenced without due consideration. Explains how to understand the economy of warfare and how success requires winning decisive engagements quickly. This section advises that successful military campaigns require limiting the cost of competition and conflict.