Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Net Loss

What it is:

A company reports a net loss when its expenses exceed revenues during a specific period of time.

How it works (Example):

A net loss is the opposite of a net profit.

A net loss (or a net profit, for that matter) is calculated using the following formula:

Revenues – Expenses – Current Debt = Net Profit or Net Loss

Why it Matters:

The net profit or net loss reported by a company is often known as its "bottom line" because it's reported at the bottom of the income statement.

The main goal of any business is to make more money than it spends. A company cannot survive if it consistantly reports net losses.

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