Negative Net Debt and EV

This problem tests whether a candidate understands the difference between enterprise value and equity value, and how cash and debt affect each one. It also checks basic corporate finance intuition about why net debt can be negative when cash exceeds debt, and why that can make enterprise value lower than equity value even though it may seem counterintuitive at first. Interviewers ask questions like this to see whether you can move cleanly between valuation concepts, explain what each metric includes or excludes, and reason through the balance sheet impact on a company’s valuation.