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 is a Net Loss?

A company reports a net loss when its expenses exceed revenues during a specific period of time. A net loss is the opposite of a net profit, which is when a organization's revenue is greater than its expenses.

How Do You Calculate Net Loss?

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

Where is Net Loss Reported on the Income Statement?

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 below revenue (the "top line") and expenses.

Why should analysts and investors pay attention to net losses? The main goal of any business is to make more money than it spends. A company cannot survive if it consistently reports net losses.