Negative Retained Earnings

This problem tests whether you can interpret retained earnings in context instead of treating a single balance sheet line item as a standalone warning sign. In investment banking interviews, candidates are often expected to connect accounting history, profitability, and capital allocation decisions, and to explain that retained earnings can be negative for different reasons, including a company that has accumulated losses during a growth phase or one that has made significant distributions to shareholders. It also helps show that you understand how items like capex, depreciation, dividends, and share repurchases affect equity over time, which is important when analyzing financial statements and forming a view on business quality.