negative net worth

Deficit Net Worth

A situation in which a person or company has more liabilities than assets. This may happen to a person if, for example, he/she owes more on his/her mortgage than the home is worth. A company may have a deficit net worth after consistently posting operating losses over an extended period of time. It is important to note that a deficit net worth does not necessarily mean that bankruptcy is inevitable, but it may prevent the debtor from receiving new credit necessary to maintain operations. It is also called negative net worth.

negative net worth

An excess of liabilities over assets. If the assets are fairly valued, a firm with negative net worth could sell all its assets and then be unable to pay all its outstanding loans. Thus, nothing would remain for the owners. Also called deficit net worth.
References in periodicals archive ?
But while it's one thing to not have many assets to speak of, it's another thing to reach the point of having a negative net worth -- and that's the category 14% of American households fall into.
The sale consideration was arrived at taking into account the outstanding financial obligations and negative net worth of CJS Aviation.
They shy away from emerging biotech companies with a negative net worth.
The holding company of Ashikaga Bank, a regional bank once nationalized after falling into negative net worth, has applied for listing on the Tokyo Stock Exchange, sources close to the matter said Wednesday.
which has a negative net worth of about 60 billion yen.
Moreover, more than a third of our households have zero or negative net worth versus about 15% for whites.
The rating mirrors the firm's weak financial profile as well as its negative net worth and steady increase in payable days over the years.
Family First lost nearly $17 million and had negative net worth at year-end.
But this was more than offset by a pounds 450billion fall in the value of private nonfinancial businesses, while several other sectors such as central government also had a negative net worth.
now undergoing a state-backed rehabilitation process, said Wednesday its negative net worth -- liabilities in excess of assets -- has expanded to about 1 trillion yen.
The poorest 5% of American households saw their negative net worth grow from $1,000 in 1984 to nearly $9,000 in 2005.
To buy the company for that amount, employees would have to borrow about $84 million, taking the firm heavily into debt and giving it a negative net worth of $39 million.