Negative equity
Shareholders' equity is what is left after subtracting a company's liabilities from its assets. It turns negative when years of share buybacks and dividends have cost more than the profits kept in the business. It is a book-keeping outcome, not a verdict: some of the largest and most profitable companies in the United States carry negative book equity.
How it is computed here
| Formula | total assets minus total liabilities, when the result falls below zero |
|---|---|
| Unit | Not a figure — a convention |
| Period | One fiscal year, as reported |
| Source | Extracted from SEC filings; every value on an asset page carries the accounting tag and the filing it came from |
What goes into the formula
| Total assets | Everything the company owns, as reported on the balance sheet. |
|---|---|
| Total liabilities | Everything the company owes — debt, and every other obligation on the balance sheet. |
A formula without its inputs explained is decoration. Where an input is missing from a filing, the metric is left empty here rather than completed with a zero or an estimate.
How to calculate negative equity, step by step
A company that has returned more cash to shareholders, over the years, than it kept as retained profit.
| Total assets | $10.0B |
|---|---|
| Total liabilities | $12.0B |
- Subtract liabilities from assets: $10.0B − $12.0B.
- The result is below zero: −$2.0B.
- Shareholders' equity for this company is negative.
Result: Shareholders' equity of −$2.0B
The company is not insolvent by this figure alone — assets can still exceed liabilities in liquidation value, and the company can still be profitable and cash-generative. Negative equity says only that book assets, as carried on the balance sheet, no longer exceed book liabilities.
The figures in this example are illustrative and rounded — they are not a real company. The real figures on this site are the live ones below and on every asset page, each carrying the filing it came from.
What negative equity is good for
A reader who sees a metric missing without this context might assume a data error. Negative equity is a real, if unusual, state for a financially healthy company to be in, and it is the reason two specific figures disappear from this site rather than showing a number: return on equity, which divides by it, and net debt to equity, which would otherwise show a ratio of arbitrary sign and magnitude.
What this number does not tell you
Negative equity does not mean the company is losing money, and says nothing about the cash it generates. But it does end return on equity: dividing profit by a negative denominator produces a number that looks like an answer and is not. In those years we leave the figure out and say why.
Every metric on this site is published with its blind spot stated. A figure without its limit is half a fact.
See it in a published filing
These pages show the figure across up to nineteen fiscal years, with the accounting tag and the filing behind every value.