Digital Brand Media and Marketing Group Inc (DBMM)

[Jetmek_03052]

Really.

https://www.accountingtools.com/articles/accumulated-deficit

What is an Accumulated Deficit?

An accumulated deficit is a negative retained earnings balance. This deficit arises when the cumulative amount of losses experienced and dividends paid by a business exceeds the cumulative amount of its profits. An accumulated deficit signals that an entity is not financially stable, since it requires additional funding. However, this may not be the case for a startup business, where substantial initial losses are expected before sales begin to take off.

It can be quite difficult for a business to obtain a loan when it has an accumulated deficit, since this is a sign for lenders that the business is not generating sufficient cash flow to pay off the loan.

Example of an Accumulated Deficit
An organization generates $100,000 of profits, pays out $25,000 in dividends, and then experiences $150,000 of losses. Its accumulated deficit is calculated as:

$100,000 Profits - $25,000 Dividends - $150,000 = $75,000 Accumulated deficit

Using this definition as an example (since DBMM has NEVER given any dividends) the deficit would have been $50,000.

IF this example had been experienced by DBMM for say....10 years? The accumulated deficit of the company would be expressed as $500,000.

DBMM's accumulated deficit is HUGE, for a tiny company that has basically DONE NOTHING since inception!