Is it possible for retained earnings to be negative?

Yes, it is possible for retained earnings to be negative. In summary, retained earnings can indeed be negative. This situation occurs when a company's cumulative losses and dividend payments exceed its cumulative profits. Essentially, if a business has experienced more losses than gains over time, or if it has distributed more dividends than it has earned in profits, its retained earnings will reflect a negative balance. This negative figure is often referred to as an ""accumulated deficit"" and indicates that the company has not been able to generate sufficient profits to cover its losses and dividend payouts.