When a business sells a product or asset at a lower price than it was purchased for, it incurs a loss. This loss is known as a capital loss and can occur for various reasons such as a decline in market demand or an unsuccessful investment. Capital losses have a negative impact on a company's financial standing and can affect their ability to generate profits. It is important for businesses to carefully monitor their sales and make strategic decisions to minimize capital losses. Additionally, capital losses can be offset against capital gains, providing some relief for businesses.
