Reserve and surplus
This query is : Resolved
20 January 2021
If the Reserves and surplus comes as negative figure what it means
21 January 2021
It means loss incurred......
22 January 2021
You are suffering from loss and your liabilities are more than your assets
26 January 2021
Besides all this, if a firm decides to pay dividend far higher than the outstanding balance in its reserves and surplus account, it may lead to a negative or deficit networth.
If you are an equity investor, it is pertinent to keep a tab on your company’s networth. It will tell you if there are any assets left for you as a shareholder, should the company’s operations become unviable and warrant closure. If the company’s networth is negative or deficit and the entity makes losses, it may be a warning signal for you as an investor to exit your investment.
If you are an equity investor, it is pertinent to keep a tab on your company’s networth. It will tell you if there are any assets left for you as a shareholder, should the company’s operations become unviable and warrant closure. If the company’s networth is negative or deficit and the entity makes losses, it may be a warning signal for you as an investor to exit your investment.
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