Someone posted earlier in the thread showing natalie heeleys company check record.
I didn't fully understand it at the time, so I checked again today to get a better understanding of her business finances.
She is showing (for year 2014)
Net worth -£211,694 (minus)
Liabilities £363,474
I was nor sure exactly what liability ment, so I checked - it means how much a company owes
Current assets £149,648 - again I wasn't 100% sure on meaning, so I checked. It means total amount held in either stock or money. (My bets on stock!)
So with all that info, I still didn't feel like I understand her finances, so I checked the implications of a business being in negative net worth.
There is a huge amount of info on this, but I think this sums it up well
Calculating the net worth of your business is fairly simple to do. Net worth is expressed as an outcome of subtracting your total liabilities from your total assets. In other words, you add up the value of all assets, which generally include cash and other equity. You then add up all your debt. Subtract that debt from your assets and the resulting number is your net worth.
Negative Net Worth
When a business has more liabilities than assets, it is said to have a negative net worth. However, this negative net worth actually indicates that the business is insolvent or bankrupt. Individuals can have a negative net worth and not necessarily have to declare bankruptcy so long as they can service their debt in installments. The same is true of a business, but generally businesses that are insolvent do not tend to last much beyond the point of bankruptcy. Once bankruptcy has been officially declared, business assets are sold off to pay creditors and the business is dissolved.