Hello all

I am using a definition to create a dummy variable.

If the accumulated loss of the year is more than 50% of the previous four years' average networth, then the dummy has a value of 1.

Loss is always negative, but networth can be both positive and negative.

When networth is positive, then the definition is clear, but when the networth is also negative, then how should I interpret the percentage of accumulated loss to the previous four years' average networth?

Thanks and Regards