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. Deadweight Loss

    The costs to society created by market inefficiency. Mainly used ...
  5. Net Operating Loss - NOL

    A period in which a company's allowable tax deductions are greater ...
  6. Encumbrance

    A claim against a property by a party that is not the owner. ...
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  1. How do I read and analyze an income statement?

    The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>
  2. Do dividends affect working capital?

    Regardless of whether cash dividends are paid or accrued, a company's working capital is reduced. When cash dividends are ... Read Full Answer >>
  3. Do prepayments provide working capital?

    Prepayments, or prepaid expenses, are typically included in the current assets on a company's balance sheet, as they represent ... Read Full Answer >>
  4. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>
  5. What is a profit and loss (P&L) statement and why do companies publish them?

    A profit and loss (P&L) statement, or balance sheet, is essentially a snapshot of a company's financial activity for ... Read Full Answer >>
  6. How do dividends affect the balance sheet?

    Dividends paid in cash affect a company's balance sheet by decreasing the company's cash account on the asset side and decreasing ... Read Full Answer >>

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