Right column of balance sheet
full view of balance sheet.
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1 Answer
Look at the assets. The total assets are negative too (due to losses in "invesdtments in affiliates"). Since equity is assets - liabilities, it makes sense that equity is negative.
answered Jun 2, 2020 at 22:52
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d stanley thank you for responding. I am new too finance and trying too learn as much as I can. I looked up stock holders equity and it is said to be money setaside for shareholders. so if that amount is negative does that mean that their is no money earmarked for them? Jun 2, 2020 at 22:59
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Equity is by definition assets minus liabilities, so this is not so much of a “there’s money set aside somewhere” sort of thing as it is an accounting identity. Like when someone “has equity in their home” because they owe less than the home is worth. Jun 2, 2020 at 23:15
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so the stockholders equity is how much the house is worth but since the house has loans that exceed debt the stockholders equity is worthless? Jun 2, 2020 at 23:36
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Yes, exactly, but “worthless” may give the wrong impression because this is strictly an accounting identity. There may be good, justifiable reasons for negative equity for a given business. Jun 3, 2020 at 0:06
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C8 thank you for your time and answering, I will now look into accounting identity's and what all that really means, thank you and be safe with all this stuff going on, Jun 3, 2020 at 3:57