Question

If a company is "in the red," then they are doing very well financially. True False

Answer 1

Hello there! This is statement is FALSE!

When a company is in the green, it is generating profits, black means breaking even (covering costs but not making a profit) and red means you are not even making enough profits to support the costs of running the business. AN easy way to remember this is green = good and red - bad.

I hope this helps and have a great rest of your day! :)

Answer 2

False. While overall, they may have an increase of income (as compared to previous years), the "in the red" statement means that, compared to the previous year, they had lost money.

For example, the company can be making 130k+ more money as compared to when they are as a start up, but as compared to the previous year, they made a profit of -$13k. This is an example of "in the red", or the losing of money.

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