when profits fall below the level of expenses and cost of goods sold cogs in a given time a net loss results 
factors contributing to a net lossbusinesses that have a net loss do not necessarily go bankrupt immediately because they may opt to use their retained earnings or loans to stay afloat this strategy however is only short term as a company without profits will not survive in the long term net loss examplessay that substantial refunds were expected as companies took advantage of outstanding tax credits previously issued as a way of retaining jobs in the state during the recession as a result the state treasurer anticipates a decrease of 99 million in revenue from the state s principal business taxes this prompts state officials to cut the current and upcoming fiscal year revenue projections by a significant amount and unless they can cut expenditures as well they will be operating at a net loss another example would be if company a has 200 000 in sales 140 000 in cogs and 80 000 in expenses subtracting 140 000 cogs from 200 000 in sales results in 60 000 in gross profit however because expenses exceed gross profit a 20 000 net loss results yet another example would be of a company that sells frozen foods and needs to pay for refrigerated storage facilities utility costs taxes employee expenses and insurance if sales are slow the company will need to hold onto its inventory for a longer time incurring additional carrying costs which could contribute to a net loss can a company with positive revenues still have a net loss yes even if a company has a large volume of sales it can still end up losing money if the cost of goods or other expenses related to those sales e g marketing are too high other factors like taxes interest expenses depreciation and amortization and one time charges like a lawsuit can also take a company from a profit to a net loss 