1. Operating Income is Negative (i.e., net loss from operations)

Example:

Operating Expenses = ₹100 crore

Operating Income = –₹50 crore

CIR = ₹100 / –₹50 × 100 = –200%

In this case, CIR is negative due to a loss.

2. Expenses are Negative (extremely rare)

This could happen if:

The organization has refunds, grants, or reversals that offset expenses.

However, this would be an accounting anomaly or error in most normal business models.

Conclusion:

Yes, a negative CIR is possible.

But it indicates a loss-making operation or a problem in financial reporting.

It is not a good thing—it's a red flag.

Example (Financial Crisis Scenario):

Let’s say a group of startups records massive operational losses due to market crash, but still incurs fixed costs (like rent, salaries). Their income becomes negative due to refunds, bad debts, or customer churn — resulting in a negative CIR.

There are many other examples

politicial parties in powerwho have huge donations

Some universities

some type of traders with little overheads

Richard Selase Agboga

A negative cost-to-income ratio is highly unusual and, under standard accounting definitions, typically not feasible because both costs and income are expected to be non-negative in financial reporting. The cost-to-income ratio is usually calculated as:

Cost-to-Income Ratio = Operating Expenses / Operating Income

Since both the numerator and denominator are expected to be positive values (especially income in a functioning organization), a negative ratio often indicates one of the following:

For references, you may consider:

• Berger & Humphrey (1997) on efficiency measurement in financial institutions
• Altunbas, Liu, Molyneux, & Seth (2000), which discusses efficiency in the context of risk and performance
• Texts on financial ratios and crisis management in firms, such as Brigham & Ehrhardt’s "Financial Management: Theory & Practice"

In your analysis, if the negative ratio results from negative income during a crisis, it can indeed serve as a signal of financial distress but should be interpreted with caution, possibly using alternative metrics or transforming the variable (e.g., log transformations or excluding outliers).