When do expenses exceed revenues in a business?

When expenses exceed revenues in a business, it indicates that the company is operating at a loss. This occurs when the total costs associated with running the business—such as salaries, rent, utilities, and other operating expenses—surpass the income generated from sales or services provided.

In this situation, the financial health of the business is compromised, as it is not generating enough revenue to cover its costs. Understanding this concept is crucial for businesses, as prolonged losses can lead to cash flow issues, decreased investment opportunities, and, ultimately, business failure if not addressed.

On the other hand, profit occurs when revenue exceeds expenses, which is a desired outcome for any business. The break-even point is the level of sales at which total revenues equal total expenses, resulting in neither profit nor loss. Yield typically refers to the returns generated from an investment or operation and is not directly related to the relationship between revenues and expenses in the context of a business's financial performance.