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Can current and accumulated profits be negative?

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Can current earnings and profits or accumulated earning and profits be negative? Please provide reference.

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Solution Summary

Your tutorial is 186 words and two reference and shows how a firm can have negative current earnings, negative cumulative earning or both.

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Yes, both can be true but they don't have to both be true. One can be true but not the other.

Current earnings is negative when the firm has more expenses than revenues for the period. That generates a loss for the current period.

Accumulated earnings and profits (sometimes called retained earnings although retained earnings is accumulated earnings less dividends) is the ...

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Carol Sargent, PhD
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  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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