Can a company end up with negative shareholders' equity, and what does it signify?
- No, GAAP prevents it
- Yes, and it means the company is likely bankrupt
- Yes, but only for companies with no debt
- No, equity can never be negative
- Yes; it comes from accumulated losses or large buybacks/dividends, and can signal distress or heavy capital return
Create a free account to answer
It's free — sign up to answer questions and track your mastery.