Posted in Finance, Accounting and Economics Terms, Total Reads: 403
Black is used to describe a company which has shown a positive balance on company’s financial statement in past year. If a company shows positive earnings after accounting for all the expenses, then the company is said to be ‘In the Black’.
Conversely if the company shows negative earnings in the past financial year, it is said to be ‘In the Red’. This terminology is derived from the color of ink used by the accountants to enter a positive or a negative balance on the financial statement. Thus ‘In the Black’ status of the company indicates positive future prospects.