What is a 'Negative Return'
This occurs when a company or business has a financial loss or lackluster returns on an investment during a specific period of time. Some businesses report a negative return during their early years because of the amount of capital that initially goes into the business to get it off the ground. New businesses generally do not begin making a profit until after a few years of being established.
Also referred to as negative return on equity.
BREAKING DOWN 'Negative Return'
A new business that has invested $500,000 into equipment, tools, repairs or any other operational expenses and is losing $50,000 annually will have negative return on capital of 10%. If the company is able to realize a return on equity in the near future, then the impact of this initial negative return can be overcome.
Investors in the company will be willing to stick around if they know that the company has the potential to quickly turn its negative return into a positive return and bring in high profits, sales or asset turnover.
Stocks and other investments can also have a negative return.

Target Return
A pricing model that prices a business based on what an investor ... 
Return
The gain or loss of a security in a particular period. The return ... 
Return Of Capital
A return from an investment that is not considered income. The ... 
Expected Return
The amount one would anticipate receiving on an investment that ... 
Return On Capital Gains
The return that one gets from an increase in the value of a capital ... 
Gross Rate Of Return
The total rate of return on an investment before the deduction ...

Professionals
Introduction
FINRA/NASAA Series 66: Section 2 Measuring Portfolio Returns. This section discusses different return measures: return on investment, holding period, annualized, risk free and total returns. 
Fundamental Analysis
Explaining Expected Return
The expected return is a tool used to determine whether or not an investment has a positive or negative average net outcome. 
Professionals
Measuring Portfolio Returns
NASAA Series 65: Section 16 Measuring Portfolio Returns. In this section different types of risk measures discussed and some sample questions. 
Term
What's a Return of Capital?
A return of capital is an investment return that is not considered income. 
Professionals
Expected And Unexpected Returns
Find out how to apply this to your portfolio. 
Professionals
Rates of Return
FINRA/NASAA Series 66 Section 1  Rates of Return. In this section internal rate of return (IRR), real return, expected return and riskadjusted return. 
Brokers
Private Equity's Returns Are Tempered By Its Risks (BX, KKR)
Private equity firms adopt approaches to quickly hike up earnings and boost returns, but these investments come with big risks too. 
Term
Understanding Total Returns
Total return measures the rate of return earned from an investment over a period of time. 
Professionals
Other Terms
FINRA/NASAA Series 66: Section 2 Other Terms. This section discusses measures of portfolio return: risk premium, expected return and benchmark portfolios. 
Professionals
Why Equity Financing Is Worth It
When a business takes on an equity partner, it is exposed to a number of advantages that debt financing simply cannot provide.

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