# Analysis of Moody's Adjusted Leverage Trend for Iberdrola SA (2022)

## Key Leverage Metrics

I'll analyze the leverage position using the data provided for 2022-01-01 and 2023-01-01 (fiscal year 2022):

### Total Debt Analysis:
- **Noncurrent Financial Liabilities (2023-01-01):** €44,216M
- **Noncurrent Financial Liabilities (2022-01-01):** €37,175M
- **Current Financial Liabilities (2023-01-01):** €25,079M
- **Current Financial Liabilities (2022-01-01):** €21,297M

**Total Debt Change:**
- 2023-01-01: €44,216M + €25,079M = €69,295M
- 2022-01-01: €37,175M + €21,297M = €58,472M
- **Increase: €10,823M (+18.5%)**

### EBITDA Analysis (Gross Operating Profit):
- **Beneficio Bruto De Explotacion EBITDA (2023-01-01 period):** €13,228M
- **Beneficio Bruto De Explotacion EBITDA (2022-01-01 period):** €12,006M
- **Growth: €1,222M (+10.2%)**

### Adjusted Leverage Ratio (Debt/EBITDA):
- **2022 (FY2022):** €58,472M / €12,006M = 4.87x
- **2023 (FY2022):** €69,295M / €13,228M = 5.24x

### Equity Analysis:
- **Total Equity (2023-01-01):** €58,114M
- **Total Equity (2022-01-01):** €56,126M
- **Growth: €1,988M (+3.5%)**

### Leverage Ratio (Debt/Equity):
- **2022:** €58,472M / €56,126M = 1.04x
- **2023:** €69,295M / €58,114M = 1.19x

## Assessment

The leverage metrics show a **deteriorating trend** during 2022:

1. **Debt/EBITDA increased from 4.87x to 5.24x** - a significant increase in the leverage ratio
2. **Total debt increased 18.5%** while EBITDA grew only 10.2%, creating unfavorable leverage dynamics
3. **Debt/Equity ratio worsened from 1.04x to 1.19x**
4. While EBITDA improved modestly, debt growth significantly outpaced earnings growth
5. Cash flow from operations (€10,443M) provided some support, but capital expenditures (€6,277M) and financial obligations consumed most of the operating cash flow

The company's leverage position deteriorated during 2022 despite improving profitability, driven by significant debt increases exceeding EBITDA growth rates.

<answer>Deteriorating</answer>