Question

If operating income is negative, a business will likely require additional outside funding to remain in operation.

• A. True
• B. False

Answer 1

The correct option is A True

Operating profit is the profit earned through the normal operations and activities of the business. However, while calculating operating profit expenses which are of financial nature are not taken into consideration. Operating profit is the excess of operating revenue over operating expenses. If operating income is negative, a business will likely require additional outside funding to remain in operation.