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Hi
If the equity is negative then is that just assumed to be extra debt and there is no debt/equity as such?
Not to waste your time: I saw on the internet the CFO of energsys says to take some debt way way way down the line and turn it into equity such as director loan for purpose of the calculation…..does that sound right?
Negative equity would mean that the liabilities of the company were greater than the assets, and that therefore the company was in financial distress.
To avoid going into liquidation the company should investigate ways of raising more equity and one thing that might be possible would be for debt lenders to accept shares to cancel their debt.
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