Negative return on net assets indicates that the company has been in a state of negative profit growth. But it does not necessarily mean that the company is losing money. Some companies have a negative net profit, but their cash flow is still growing, which can only be said to be a loss.

Net assets are assets owned by enterprises that can be used freely, which is called owner's equity. It consists of two parts, one part is the capital invested at the beginning of the establishment of the enterprise, including the premium part, and the other part is generated during the operation of the enterprise, including the donated assets. Net assets are owners' equity. If the company has been in a state of negative profit growth, when the undistributed profit loss of the company is greater than the sum of (paid-in capital+capital reserve+surplus reserve), the net assets are negative.

What is the return on equity?

Return on equity, also known as return on equity/return on equity/return on equity/return on equity/return on equity/return on equity, is the percentage of net profit to average shareholders' equity and the percentage of after-tax profit divided by net assets. This index reflects the level of return on shareholders' equity and measures the efficiency of the company's effective use of its own capital. The higher the index value, the higher the return on investment, reflecting the ability of self-owned capital to obtain net income.