A term relating to a negative balance on a company's financial statements.


The phrase "in the red" is used widely to refer to companies that have not been profitable within their last accounting period. This term is derived from the color of ink used to by accountants to enter a negative figure on a company's financial statements.

  1. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and ...
  2. Net Loss

    The result that occurs when expenses exceed the income or total ...
  3. Black

    A description of a positive balance on a company's financial ...
  4. Net Operating Loss - NOL

    A period in which a company's allowable tax deductions are greater ...
  5. Deadweight Loss

    The costs to society created by market inefficiency. Mainly used ...
  6. Accountant

    A professional who performs accounting functions such as audits ...
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  1. Can working capital be depreciated?

    Working capital as current assets cannot be depreciated the way long-term, fixed assets are. In accounting, depreciation ... Read Full Answer >>
  2. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  3. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>
  4. What does high working capital say about a company's financial prospects?

    If a company has high working capital, it has more than enough liquid funds to meet its short-term obligations. Working capital, ... Read Full Answer >>
  5. How can working capital affect a company's finances?

    Working capital, or total current assets minus total current liabilities, can affect a company's longer-term investment effectiveness ... Read Full Answer >>
  6. What can working capital be used for?

    Working capital is used to cover all of a company's short-term expenses, including inventory, payments on short-term debt ... Read Full Answer >>

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