Question

You speak to a business owner that is taking in almost $2,000 in revenue each month. The owner still says that they're

having trouble keeping the doors open. How can that be possible? Use the terms revenue, expenses, and profit/loss in
your answer.

Answer 1

The reason why this may be happening is because the expenses may be higher than the amount of revenue that the business is making, the cost of rent, paying the employees and running the business may be higher than the revenue that is being made. The inflows may be higher than the outflows, in which case the profit is lower than the loss and may be the reason why the owner is having trouble keeping the business running.