# FFO / Net Debt Ratio Calculation for EDP, S.A. (2022)

## Understanding FFO and Net Debt

**FFO (Funds From Operations)** is typically calculated as:
- Net Income + Depreciation & Amortization + Impairment Losses - Gains on Asset Sales

**Net Debt** is calculated as:
- Total Debt - Cash & Cash Equivalents

## Step 1: Calculate FFO for 2022 (period 2022-01-01 to 2023-01-01)

From the data:
- Net Profit/Loss: 1,169,749,000 EUR
- Depreciation, Amortization & Impairment: 1,979,007,000 EUR
- Gains/Losses on Disposal: -4,377,000 EUR

FFO = 1,169,749,000 + 1,979,007,000 - 4,377,000
**FFO = 3,144,379,000 EUR**

## Step 2: Calculate Net Debt at Year-End 2022 (2023-01-01 balance sheet date)

**Total Debt components:**
- Long-term Borrowings: 15,782,604,000 EUR
- Current Borrowings (short-term portion): 4,239,869,000 EUR
- Total Debt = 20,022,473,000 EUR

**Less: Cash and Cash Equivalents:** 4,900,205,000 EUR

**Net Debt = 20,022,473,000 - 4,900,205,000**
**Net Debt = 15,122,268,000 EUR**

## Step 3: Calculate FFO / Net Debt Ratio

Ratio = 3,144,379,000 / 15,122,268,000
Ratio = 0.2078

<answer>0.21</answer>