Is it normal to see negative assets on Balance Sheet?

professional profile

November 09, 2021

by a professional from Georgia Institute of Technology in Atlanta, GA, United States

I'm evaluating a semi-asset heavy business. It is a concrete and structural business that caters to residential and commercial customers. while evaluating the balance sheets, I noticed assets were negative for years###-###-#### is that normal or is it a red flag I should look out for ?

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Reply by a searcher
from Northwestern University in Philadelphia, PA, USA
I've seen owners book negative AR for customer deposits rather than as a positive liability which would be more correct. Their accountant adjusted it when compiling the statements at the end of the year. Not necessarily a red flag for me, but definitely peculiar -- like a lot things I've found looking at these small businesses.
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Reply by a searcher
from Harvard University in Miami, FL, USA
This is very strange - there might be an explanation (e.g. the way things are presented in the file) but I'd ask for an explanation early on as you decide whether the opp is worth pursuing
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