# FFO / Net Debt Ratio Analysis for IBERDROLA SA (2022)

## Step 1: Calculate FFO (Funds From Operations) for 2022

FFO is typically calculated as:
**FFO = Net Income + D&A + Change in Working Capital adjustments**

From the data for 2022-01-01 to 2023-01-01:
- Net Income (Profit attributable to owners): €4,339 million
- Depreciation, Amortisation and Impairment: €4,774 million
- Adjustments for non-cash items and working capital changes:
  - Provisions/Corrections/Pension costs: €5,491 million
  - Undistributed profits from associates: €(146) million
  - Subsidies applied: €(304) million
  - Finance costs adjustment: €1,842 million
  - Trade receivables changes: €(1,701) million
  - Inventory changes: €521 million
  - Trade payables changes: €44 million
  - Provision payments: €(512) million

**Simplified FFO calculation (from operating cash flow):**
Operating cash flow for 2022: €10,443 million

This represents the cash generated from operations and is our best proxy for FFO.

## Step 2: Calculate Net Debt for 2022 (as of 2023-01-01)

**Gross Debt Components:**
- Noncurrent financial liabilities: €44,216 million
- Current financial liabilities: €25,079 million
- Total Gross Debt: €69,295 million

**Less: Cash and Cash Equivalents:**
- Cash and cash equivalents: €4,608 million

**Net Debt = €69,295 - €4,608 = €64,687 million**

## Step 3: Calculate FFO / Net Debt Ratio

**FFO / Net Debt = €10,443 / €64,687 = 0.1613**

This represents approximately 16.13% or 0.16x.

<answer>0.16</answer>