Loss

Loss means the money a business loses when its costs and expenses are greater than its revenue. In simple terms, a loss happens when a business spends more money than it earns. Losses are important because they can show that a business is under financial pressure. If a company keeps losing money, it may need to cut costs, raise prices, borrow money, or change its business strategy. For example, if a company earns $500,000 in revenue but spends $700,000 on costs and expenses, it has a loss of $200,000. Loss is not the same as lower profit. Lower profit means the business still earns more than it spends, while a loss means it spends more than it earns.