[Sunny109]

When doing Ratio Analysis if the denominator and neminator both are negative numbers than what will be the ratio negative or positive?

[morgaine300]

Math rules say two negatives make a positive. However, I don't know that that has meaning when doing ratios and can't off the top of my head think of one where both numbers could be negative.

Net Income can be negative, which is net loss. But many of the things commonly used in these equations, assets, liabilities, equity, shares, dividends, market prices, etc. are not negative.

[Sunny109]

When calculating ROE ratio and Net Income is Negtive and total equity is also negtive in that situation what will the resulting ratio be... a negtive number or... a possitive number.

[morgaine300]

You're asking essentially the same question so I've moved it with your other post on this subject.

Where are you getting a negative equity from? The only way equity could go negative is if they've cut into all prior retained earnings, and have cut into all the stock, AND then gone beyond the stock, as though the owners owe them back. While you can lose everything you invest, you can't lose beyond what you have invested, so I'm not quite sure how that can happen. (Even though mathematically, yes it can.) I have to wonder if you are calculating something incorrectly.

Negative income (loss) on negative equity basically doesn't even have a meaning. How can you have a return on something that doesn't exist?

ROE occurred to me when I answered this the first time. Therefore, my original answer still stands.