What happens if revenue is less than expenses?

When revenue is less than expenses, a business incurs a loss, which can negatively impact its financial health and sustainability. This situation may lead to cash flow problems, forcing the company to either cut costs, increase sales, or seek additional funding. Prolonged losses can jeopardize the viability of the business, potentially leading to bankruptcy if not addressed. It's essential for management to analyze the causes and implement corrective measures promptly.