Can Retained Earnings be Negative? If so, what does that mean?

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Yes, again an organization’s retained earnings can be negative and this is known as an accumulated deficit. Negative balance of retained earnings happens when for some time a firm has been experiencing more losses than profits, or has paid out more in dividends than it earned.
An example of a warning sign is an accumulated deficit since it is a sure sign of loss making and can deter investors and creditors. Nevertheless, equity negative is normal for stocks of start-ups or companies in their infancy for which short-term operating profits might be negative due to the tendency to reinvest their retained earnings.
If mature firms experience negative retained earning they risk being perceived to have poor management or are struggling to make profits. Businesses which have retained earnings less than or equal to zero must find ways to enhance their profitability and steadiness.
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