I need to calculate the FFO / Net debt ratio for 2022. Let me break this down. First, let me understand what FFO (Funds From Operations) and Net Debt mean in this context. **FFO (Funds From Operations)** is typically calculated as: - Net Income + Depreciation/Amortization + Deferred Taxes + Other non-cash items - Or more commonly for utilities/infrastructure: Operating Cash Flow before working capital changes, or EBITDA - Interest - Taxes Looking at the cash flow data, I can use a more standard approach. Let me look at what's available: From the cash flow statement, I can see: - "Cash Flows From Used In Operations Before Changes In Working Capital" 2022: 2,072,700,000 EUR - This is essentially EBITDA adjusted for some items, or operating cash flow before working capital changes Actually, let me think more carefully. FFO for credit rating purposes (like S&P methodology) is typically: - Net Income + Depreciation + Amortization + Deferred Income Taxes + Other non-cash items Or more practically, from the cash flow statement, we can use: - Cash Flow From Operating Activities + Changes in Working Capital (to reverse out working capital effects) Let me check: "Cash Flows From Used In Operating Activities" 2022: 2,323,700,000 EUR But this includes working capital changes. To get FFO, we typically want to add back the working capital changes that are included, or use the pre-working capital figure. Actually, "Cash Flows From Used In Operations Before Changes In Working Capital" = 2,072,700,000 EUR seems like a good starting point for FFO. But let me verify this is reasonable. Looking at the components: - Adjustments For Depreciation And Amortisation: 736,100,000 - Accruals To Provisions: 51,700,000 - Adjustments For Gain Loss On Disposals: -6,900,000 - Adjustments For Finance Income Cost: 101,500,000 - Adjustments For Income Tax Expenses: 356,700,000 - Cash Flows From Other Non Cash Movements: -24,100,000 Sum of adjustments to get to pre-working capital: 736.1 + 51.7 - 6.9 + 101.5 + 356.7 - 24.1 = 1,215,000,000... but this doesn't directly sum to the pre-working capital number. Let me think differently. FFO is often approximated as: - Operating Cash Flow + Interest Paid + Taxes Paid - Interest Received (or variations) Or more standard for European utilities: EBITDA - Cash Interest - Cash Taxes Let me try another approach. S&P Global defines FFO as: Funds from operations (FFO) = Funds from operations before changes in working capital From the cash flow statement, "Cash Flows From Used In Operations Before Changes In Working Capital" = 2,072,700,000 EUR This seems like the best proxy for FFO available in the data. **Net Debt** = Total Debt - Cash and Cash Equivalents Total Debt = Long-term Borrowings + Short-term Borrowings + Current Portion of Long-term Borrowings For 2022 (end of year, which is 2023-01-01): - Longterm Borrowings: 8,416,700,000 EUR - Shortterm Borrowings: 444,100,000 EUR - Current Portion Of Longterm Borrowings: 1,909,300,000 EUR Total Debt = 8,416,700,000 + 444,100,000 + 1,909,300,000 = 10,770,100,000 EUR Cash and Cash Equivalents: 2,155,100,000 EUR Net Debt = 10,770,100,000 - 2,155,100,000 = 8,615,000,000 EUR Wait - I need to be careful about the year. The question asks for 2022. Looking at the data format: "2022-01-01 - 2023-01-01" means the year 2022 (from Jan 1, 2022 to Jan 1, 2023). For balance sheet items, "2023-01-01" is the end of 2022, and "2022-01-01" is the end of 2021. So for "2022" (the year ending 2023-01-01): - FFO should be from the period 2022-01-01 to 2023-01-01 For Net Debt at end of 2022 (which is 2023-01-01): - Longterm Borrowings: 8,416,700,000 - Shortterm Borrowings: 444,100,000 - Current Portion Of Longterm Borrowings: 1,909,300,000 - Cash and Cash Equivalents: 2,155,100,000 Total Debt = 8,416,700,000 + 444,100,000 + 1,909,300,000 = 10,770,100,000 Net Debt = 10,770,100,000 - 2,155,100,000 = 8,615,000,000 FFO = Cash Flows From Used In Operations Before Changes In Working Capital = 2,072,700,000 Wait, let me double-check if I should use average net debt or year-end net debt. Typically for ratios, we use year-end or average. For FFO/Net Debt, it's common to use year-end net debt. But let me also consider: should I use "Cash Flows From Used In Operating Activities" instead? That's 2,323,700,000. Actually, looking at standard credit metrics, FFO is typically defined as: - Net income from continuing operations + depreciation + amortization + deferred income taxes + other non-cash items Or from cash flow: Operating cash flow before working capital changes. Let me verify "Cash Flows From Used In Operations Before Changes In Working Capital" more carefully. This is 2,072,700,000 for 2022. Actually, I realize I should check if there are other financial liabilities to include in debt. Looking at the balance sheet: - Noncurrent Financial Liabilities: 247,200,000 - Current Financial Liabilities: 44,900,000 These might also be debt-like. Let me check if these should be included. For a conservative net debt calculation, we might include: - Longterm Borrowings: 8,416,700,000 - Shortterm Borrowings: 444,100,000 - Current Portion Of Longterm Borrowings: 1,909,300,000 - Noncurrent Financial Liabilities: 247,200,000 (could be debt-like) - Current Financial Liabilities: 44,900,000 (could be debt-like) But typically "borrowings" are the explicit debt. Financial liabilities might include derivatives, leases, etc. Let me stick with the standard definition: gross debt = borrowings. Actually, looking more carefully at the data, I see "Noncurrent Financial Liabilities" and "Current Financial Liabilities" - these could include derivatives and other items. For pure debt, borrowings is usually the right measure. However, I want to make sure about FFO. Let me look at whether there's a better measure. Some analysts calculate FFO as: - Profit Loss From Operating Activities (EBIT) + Depreciation - Cash Taxes + ... Actually, let me look at this from a different angle. "Cash Flows From Used In Operations Before Changes In Working Capital" = 2,072,700,000 This is essentially: Operating profit + depreciation/amortization - cash taxes +/- other items Let me verify by looking at the components that build up to this: Starting from Profit Loss From Operating Activities: 1,333,500,000 + Depreciation Amortisation: 725,700,000 = 2,059,200,000 (roughly EBITDA) Then adjustments for finance costs, taxes, etc. to get to pre-working capital cash flow. Actually, "Cash Flows From Used In Operations Before Changes In Working Capital" includes: - Operating profit adjustments - Non-cash items - Interest and tax adjustments Let me recalculate: 2,072,700,000 seems right as FFO proxy. But wait - I need to check if this is positive or negative. The label says "Cash Flows From Used In" which suggests outflows, but the number is positive. Looking at other items, when it says "Cash Flows From Used In Operating Activities" = 2,323,700,000, this is positive, meaning cash generated. So "Cash Flows From Used In Operations Before Changes In Working Capital" = 2,072,700,000 is cash generated. Now for Net Debt, let me also check if I should use 2022 beginning or end, or average. For 2022 performance ratio, typically: - FFO is for the year 2022 (period 2022-01-01 to 2023-01-01) - Net Debt is at end of 2022 (2023-01-01) or average Let me calculate both: End of 2022 (2023-01-01): - Total Borrowings: 8,416,700,000 + 444,100,000 + 1,909,300,000 = 10,770,100,000 - Cash: 2,155,100,000 - Net Debt: 8,615,000,000 End of 2021 (2022-01-01): - Longterm Borrowings: 8,835,000,000 - Shortterm Borrowings: 1,947,000,000 - Current Portion Of Longterm Borrowings: 1,640,000,000 - Total Borrowings: 12,422,000,000 - Cash: 1,566,800,000 - Net Debt: 10,855,200,000 Average Net Debt = (8,615,000,000 + 10,855,200,000) / 2 = 9,735,100,000 If using year-end 2022: FFO/Net Debt = 2,072,700,000 / 8,615,000,000 = 0.2406 or 24.1% If using average: 2,072,700,000 / 9,735,100,000 = 0.2129 or 21.3% Actually, I want to reconsider what FFO should be. Let me look at this more carefully. In credit analysis, especially for infrastructure companies, FFO is often calculated as: FFO = Net Income + D&A + Deferred Taxes + Other non-cash items - Gain on asset sales Or from the cash flow statement: Operating Cash Flow + Changes in Working Capital Let me check: "Cash Flows From Used In Operating Activities" = 2,323,700,000 Changes in working capital from the data: - Adjustments For Increase Decrease In Provisions: -36,900,000 - Adjustment By Increase Or Decrease In Inventories: -20,700,000 - Adjustments For Decrease Increase In Trade And Other Receivables: 285,900,000 - Adjustments For Increase Decrease In Trade And Other Payables: 604,800,000 - Adjustments For Increase Decrease In Other Non Current Liabilities: -126,100,000 - Adjustments For Decrease Increase In Other Non Current Assets: 14,700,000 Net working capital change = -36.9 - 20.7 + 285.9 + 604.8 - 126.1 + 14.7 = 721,700,000 So Operating Cash Flow before WC changes = 2,323,700,000 - 721,700,000 = 1,602,000,000? Wait, that doesn't match the 2,072,700,000 figure. Let me re-read. Actually, looking at the structure: "Cash Flows From Used In Operations Before Changes In Working Capital" = 2,072,700,000 Then working capital changes are listed separately, and then: "Cash Flows From Used In Operating Activities" = 2,323,700,000 So: 2,072,700,000 + working capital changes + interest received - interest paid - taxes paid = 2,323,700,000? Let me check: 2,072,700,000 + (-36,900,000 - 20,700,000 + 285,900,000 + 604,800,000 - 126,100,000 + 14,700,000) + 64,200,000 - 154,800,000 - 380,100,000 = 2,072,700,000 + 721,700,000 + 64,200,000 - 154,800,000 - 380,100,000 = 2,072,700,000 + 721,700,000 = 2,794,400,000 + 64,200,000 = 2,858,600,000 - 154,800,000 = 2,703,800,000 - 380,100,000 = 2,323,700,000 Yes! That matches. So "Cash Flows From Used In Operations Before Changes In Working Capital" = 2,072,700,000 is the subtotal before working capital changes, interest, and taxes. For FFO purposes, we typically want to add back interest and taxes paid (since we're looking at funds available to service debt), or we want a measure before these financing and tax items. Actually, standard FFO from S&P is: Net income before extraordinary items + depreciation + amortization + deferred income taxes + other non-cash items This is closer to the pre-working capital, pre-interest, pre-tax figure. But in practice, for the FFO/Net Debt ratio used in credit analysis, FFO is often: - Operating cash flow before working capital changes (which includes interest and taxes paid) Or sometimes: EBITDA - Cash Interest - Cash Taxes Let me think about this differently. The most common definition in European utility/infrastructure credit analysis is: FFO = Cash flow from operating activities before changes in working capital This would be 2,072,700,000 + 64,200,000 - 154,800,000 - 380,100,000? No wait, that's going backwards. Actually, "Cash Flows From Used In Operations Before Changes In Working Capital" = 2,072,700,000 already includes some adjustments. Let me trace what it includes. From the data structure: 1. Start with profit 2. Add back depreciation, amortization, impairments 3. Add back provisions 4. Adjust for gains/losses on disposals 5. Adjust for finance income/cost 6. Adjust for income tax expenses 7. Other non-cash movements = Cash Flows From Used In Operations Before Changes In Working Capital Then: 8. Working capital changes 9. Interest received 10. Interest paid 11. Income taxes paid = Cash Flows From Used In Operating Activities So "Cash Flows From Used In Operations Before Changes In Working Capital" = 2,072,700,000 is after adding back interest expense and tax expense (non-cash), but before actual cash interest and cash taxes. For FFO, we typically want a measure of cash available to service debt. So we might want to use the operating cash flow figure and add back working capital changes, or use the pre-working capital figure and adjust. Actually, I think the most standard approach for FFO/Net Debt is: FFO = Operating Cash Flow + Changes in Working Capital (if working capital changes are negative, this reduces FFO) Or: FFO = EBIT + D&A - Cash Taxes Let me try: Profit Loss From Operating Activities (EBIT) = 1,333,500,000 + Depreciation Amortisation = 725,700,000 = EBITDA = 2,059,200,000 - Cash Taxes? We have "Income Taxes Paid" = 380,100,000 But we also have "Adjustments For Income Tax Expenses" = 356,700,000 (non-cash tax expense added back) Actually, the tax expense in P&L is 355,400,000, and cash taxes paid are 380,100,000. So FFO = EBITDA - Cash Interest - Cash Taxes? Or = EBIT + D&A - Cash Taxes? FFO = 1,333,500,000 + 725,700,000 - 380,100,000 + some adjustments = 1,679,100,000? That doesn't seem right. Let me look at this from the cash flow perspective. The standard S&P FFO is: FFO = Net income + Depreciation + Amortization + Deferred taxes + Other non-cash items Or from cash flow statement: Funds from operations before changes in working capital, which typically equals: Net income + Depreciation + Amortization + Deferred taxes + Other non-cash items - Gain on asset sales + Other adjustments Looking at the data, "Cash Flows From Used In Operations Before Changes In Working Capital" = 2,072,700,000 seems to be the best proxy for this. Actually, I want to verify this is indeed "before changes in working capital" and "before interest and taxes paid". Looking at the sequence: The items listed after "Cash Flows From Used In Operations Before Changes In Working Capital" are: - Adjustments For Increase Decrease In Provisions (working capital) - Adjustment By Increase Or Decrease In Inventories (working capital) - Adjustments For Decrease Increase In Trade And Other Receivables (working capital) - Adjustments For Increase Decrease In Trade And Other Payables (working capital) - Adjustments For Increase Decrease In Other Non Current Liabilities (working capital) - Adjustments For Decrease Increase In Other Non Current Assets (working capital) - Interest Received Classified As Operating Activities - Interest Paid Classified As Operating Activities - Income Taxes Paid Refund Classified As Operating Activities Then: Cash Flows From Used In Operating Activities So yes, "Cash Flows From Used In Operations Before Changes In Working Capital" = 2,072,700,000 is before working capital changes, interest received/paid, and taxes paid. For FFO, a common definition is this exact figure: cash from operations before working capital changes. This is sometimes called "CFO before working capital changes" or "Operating cash flow before changes in working capital." However, some definitions of FFO include interest paid (since we want funds available to service debt). Let me check standard credit metrics. Moody's defines FFO as: Net income + D&A + deferred taxes + other non-cash items - gains on asset sales + other adjustments This is essentially the same as "Cash Flows From Used In Operations Before Changes In Working Capital" if we adjust for interest and taxes. Actually, looking at the building blocks: - "Adjustments For Finance Income Cost" = 101,500,000 (this is added back, meaning finance costs were deducted in profit) - "Adjustments For Income Tax Expenses" = 356,700,000 (tax expense added back) So "Cash Flows From Used In Operations Before Changes In Working Capital" starts from some base and adds back non-cash items and finance costs and tax expenses. Actually, I think it starts from "Profit Loss" or "Profit Loss From Continuing Operations" and makes adjustments. Let me check: Profit Loss = 857,700,000 + Depreciation Amortisation = 725,700,000 + other adjustments... 857,700,000 + 736,100,000 (D&A from cash flow) + 51,700,000 + ... = not quite matching Actually, the "Adjustments For Depreciation And Amortisation Expense" = 736,100,000 is slightly different from "Depreciation Amortisation And Impairment Loss" = 725,700,000. The difference might be impairment losses or other items. Let me just accept that "Cash Flows From Used In Operations Before Changes In Working Capital" = 2,072,700,000 is the standard FFO proxy available in this data. For Net Debt, I need to decide whether to include only borrowings or also other debt-like items. Standard Net Debt = Short-term borrowings + Long-term borrowings + Current portion of long-term borrowings - Cash and cash equivalents = 444,100,000 + 8,416,700,000 + 1,909,300,000 - 2,155,100,000 = 10,770,100,000 - 2,155,100,000 = 8,615,000,000 Some analysts also deduct current financial assets and noncurrent financial assets if they are readily marketable securities (not operating assets). Current Financial Assets = 255,300,000 Noncurrent Financial Assets = 494,400,000 If we include these as "cash-like": Net Debt = 8,615,000,000 - 255,300,000 - 494,400,000 = 7,865,300,000 But standard definition usually only includes "Cash and Cash Equivalents" as the deduction. Let me check if Current Financial Assets and Noncurrent Financial Assets are truly liquid investments or operating assets. Given the large increase in Noncurrent Financial Assets from 287,700,000 to 494,400,000, and the decrease in Current Financial Assets from 980,600,000 to 255,300,000, these seem to be financial investments that could be liquid. However, for conservatism and standard practice, I'll use Cash and Cash Equivalents only. So: FFO / Net Debt = 2,072,700,000 / 8,615,000,000 = 0.2406 Or as a percentage: 24.06% Wait, I should double-check if I should use average net debt or year-end net debt. For performance ratios, year-end is common for snapshot metrics, but average is more accurate for flow/stock ratios. Actually, looking at credit rating methodologies, they typically use year-end net debt for this ratio, or sometimes average of beginning and end. Let me also consider: should I use 2022 year-end or 2021 year-end net debt with 2022 FFO? For a ratio describing 2022 performance, using 2022 year-end balance sheet position is standard. But let me also calculate with average net debt: Average Net Debt = (8,615,000,000 + 10,855,200,000) / 2 = 9,735,100,000 FFO / Average Net Debt = 2,072,700,000 / 9,735,100,000 = 0.2129 or 21.29% Hmm, I need to think about which is more standard. For leverage ratios like Debt/EBITDA, year-end debt is common. For coverage ratios like FFO/Net Debt, year-end or average can be used. Actually, I realize I should check if "Cash Flows From Used In Operations Before Changes In Working Capital" is truly the right FFO measure. Let me look at whether we need to adjust for interest or taxes. In some definitions, FFO = Operating Cash Flow before Working Capital Changes + Interest Paid This would be: 2,072,700,000 + 154,800,000 = 2,227,500,000? But wait, the 2,072,700,000 already includes adding back "Adjustments For Finance Income Cost" of 101,500,000, which is the non-cash finance cost adjustment, not the cash interest paid. Let me think about this more carefully. The starting point for "Cash Flows From Used In Operations Before Changes In Working Capital" is likely Profit Before Tax or some operating profit measure. Actually, looking at the cash flow statement structure, it seems to start from "Profit Loss" and add back various items. If we start from Profit Loss = 857,700,000: + Depreciation & Amortization = 736,100,000 + Provisions = 51,700,000 - Gain on disposals = -6,900,000 (negative means subtract gain) + Finance costs (non-cash or total?) = 101,500,000 + Income tax expense = 356,700,000 + Other non-cash = -24,100,000 = 857,700,000 + 736,100,000 + 51,700,000 - 6,900,000 + 101,500,000 + 356,700,000 - 24,100,000 = 2,072,700,000 Yes! This matches. So "Cash Flows From Used In Operations Before Changes In Working Capital" = 2,072,700,000 is essentially: Net Income + D&A + provisions - gains + finance costs + tax expense + other non-cash This is very close to the standard FFO definition! It includes finance costs (interest) and tax expense added back, which means it's before interest and tax from a cash perspective, but after adding back the non-cash accruals. For a debt service ratio, we might want to subtract cash interest and cash taxes, or we might want to keep it as is. Actually, standard FFO for the FFO/Debt ratio in credit analysis is typically: FFO = Net income before extraordinary items + depreciation + amortization + deferred taxes + other non-cash items This is essentially what we have: 2,072,700,000 (approximately). But wait - does this include interest? The finance costs of 101,500,000 were added back. Finance costs in P&L = 121,800,000 (from "Finance Costs" line item). The difference might be capitalized interest or other items. Actually, "Finance Income Cost" = 22,700,000 (net), and "Finance Costs" = 121,800,000. The adjustment of 101,500,000 might be the net finance cost after finance income, or some other measure. Let me not overcomplicate this. The standard proxy for FFO in this data is "Cash Flows From Used In Operations Before Changes In Working Capital" = 2,072,700,000. Now for Net Debt, I want to double-check my calculation. End of 2022 (2023-01-01): - Longterm Borrowings: 8,416,700,000 - Shortterm Borrowings: 444,100,000 - Current Portion Of Longterm Borrowings: 1,909,300,000 Total Borrowings = 10,770,100,000 Less: - Cash And Cash Equivalents: 2,155,100,000 Net Debt = 8,615,000,000 Should I include "Current Financial Assets" and "Noncurrent Financial Assets"? These total 749,700,000. If these are liquid financial investments, they could be deducted. Looking at the context: "Current Financial Assets At Fair Value Through Profit Or Loss" suggests these are marketable securities. "Noncurrent Financial Assets" might include longer-term investments. For a conservative measure, I'll exclude these from the "cash" deduction, as they may not be immediately available for debt repayment. However, I should note that some analysts do include liquid financial assets in "net debt" calculations. Let me also check if there are any other debt-like items: - "Noncurrent Financial Liabilities" = 247,200,000 - these could be debt-like - "Current Financial Liabilities" = 44,900,000 - these could be debt-like If these are derivative liabilities or other financial obligations, they might be considered debt-like. However, "financial liabilities" often includes derivatives (which are hedging, not debt) and lease liabilities. For standard Net Debt, I'll stick with borrowings only. Final calculation: FFO / Net Debt = 2,072,700,000 / 8,615,000,000 = 0.2406 As a ratio or percentage: 24.06% or 0.24x Actually, I want to verify one more thing. Should I use the period average or year-end for net debt? In many credit analyses, for flow/stock ratios, the average is preferred to match the flow (annual) with the average stock. But in practice, many published ratios use year-end figures for simplicity. Let me also consider: if I use 2021 year-end net debt (beginning of 2022): Net Debt at 2022-01-01 = 12,422,000,000 - 1,566,800,000 = 10,855,200,000 Average = (8,615,000,000 + 10,855,200,000) / 2 = 9,735,100,000 FFO / Average Net Debt = 2,072,700,000 / 9,735,100,000 = 0.2129 Or if we use the more common "FFO to Net Debt" as a percentage, it's often expressed as: - FFO / Gross Debt, or - FFO / Net Debt For year-end: 24.06% For average: 21.29% I think year-end is more commonly used in quick calculations, but average is theoretically better. Actually, looking at this again, I realize that "Cash Flows From Used In Operations Before Changes In Working Capital" might not be the exact FFO. Let me consider an alternative: using Operating Cash Flow and adding back working capital changes. Operating Cash Flow = 2,323,700,000 Working capital changes (net) = -36,900,000 - 20,700,000 + 285,900,000 + 604,800,000 - 126,100,000 + 14,700,000 = 721,700,000 So "CFO before WC changes" = 2,323,700,000 - 721,700,000 = 1,602,000,000? Wait, that doesn't equal 2,072,700,000. Let me recheck. Actually, the working capital changes I listed include both current and non-current items that are operating in nature. But there are also interest and taxes paid. From 2,072,700,000 (before WC changes): + WC changes of 721,700,000 + Interest received 64,200,000 - Interest paid 154,800,000 - Taxes paid 380,100,000 = 2,072,700,000 + 721,700,000 + 64,200,000 - 154,800,000 - 380,100,000 = 2,072,700,000 + 251,000,000 = 2,323,700,000 Yes! That works. So 2,072,700,000 is indeed before WC changes, interest, and taxes. For FFO, a common alternative definition is: FFO = Operating Cash Flow + Increase in Working Capital (or - decrease) If working capital increased (used cash), we add it back to get FFO. WC change = 721,700,000 (positive means sources of cash, or decrease in working capital) Actually, let me check the signs. "Adjustments For Increase Decrease In Provisions" = -36,900,000. If provisions decreased, that's a use of cash (negative adjustment). Hmm, the signs are confusing. Let me think of it as: - "Adjustments For..." in the cash flow statement means these are added to or subtracted from the previous subtotal. From "Cash Flows From Used In Operations Before Changes In Working Capital" = 2,072,700,000 Add: "Adjustments For Increase Decrease In Provisions" = -36,900,000 Add: "Adjustment By Increase Or Decrease In Inventories" = -20,700,000 Add: "Adjustments For Decrease Increase In Trade And Other Receivables" = 285,900,000 Add: "Adjustments For Increase Decrease In Trade And Other Payables" = 604,800,000 Add: "Adjustments For Increase Decrease In Other Non Current Liabilities" = -126,100,000 Add: "Adjustments For Decrease Increase In Other Non Current Assets" = 14,700,000 Add: "Interest Received" = 64,200,000 Less: "Interest Paid" = -154,800,000 (or add -154,800,000) Less: "Income Taxes Paid" = -380,100,000 So after WC changes: 2,072,700,000 - 36,900,000 - 20,700,000 + 285,900,000 + 604,800,000 - 126,100,000 + 14,700,000 = 2,794,400,000 Then + 64,200,000 - 154,800,000 - 380,100,000 = 2,323,700,000 So the WC changes contributed +721,700,000 to cash flow. For FFO, if we want "recurring" or "normalized" cash flow before working capital fluctuations, we use 2,072,700,000. Actually, I realize I should also consider whether to add back cash interest paid to get a pre-interest measure, since Net Debt is a pre-interest concept. Some FFO definitions: - FFO = EBIT + D&A - Cash Taxes (this is pre-interest) - FFO = Net Income + D&A + Deferred Taxes + Other non-cash (this is after-interest) For FFO/Net Debt ratio, we typically want FFO available to service debt, so pre-interest is logical. If we use "Cash Flows From Used In Operations Before Changes In Working Capital" = 2,072,700,000, this includes adding back finance costs (non-cash), but not cash interest paid. Actually, it includes "Adjustments For Finance Income Cost" = 101,500,000, which suggests finance costs were deducted and are added back. Wait, let me re-examine. The starting point is Profit Loss = 857,700,000. This is after all costs including finance costs and tax expense. Then we add back: - D&A: 736,100,000 - Provisions: 51,700,000 - Gain on disposal: -6,900,000 (subtract gain) - Finance Income Cost: 101,500,000 (add back finance net cost) - Income Tax Expense: 356,700,000 (add back tax expense) - Other non-cash: -24,100,000 So 2,072,700,000 is after adding back non-cash finance costs and non-cash tax expense, but before actual cash interest and cash taxes. To get a true "funds from operations" available for debt service, we might want to subtract cash interest and cash taxes, or we might define FFO as this pre-WC, pre-cash interest, pre-cash tax figure. Actually, I think the standard approach is: FFO = Net Income + D&A + Deferred Taxes + Other non-cash items This equals approximately 2,072,700,000 (with some differences for exact definitions). For the FFO/Net Debt ratio, this is compared to Net Debt to see how many years it would take to repay debt from internal funds. Let me finalize my calculation: - FFO = 2,072,700,000 EUR - Net Debt (year-end 2022) = 8,615,000,000 EUR - FFO / Net Debt = 0.2406 or 24.1% Or if we want to express as a multiple (years to repay): 0.24x Actually, looking at common presentations, FFO/Net Debt is often expressed as a percentage. So 24.1% or 0.241. But sometimes it's expressed as a ratio where 1.0 would mean FFO equals Net Debt. So 0.24 means FFO is 24% of Net Debt. Let me also try the alternative with financial assets included as cash-like: Net Debt = 8,615,000,000 - 255,300,000 - 494,400,000 = 7,865,300,000 FFO / Net Debt = 2,072,700,000 / 7,865,300,000 = 0.2635 or 26.4% I think the more standard approach without financial assets is better, as "Cash and Cash Equivalents" is the standard deduction. One more check: should I include "Noncurrent Assets Or Disposal Groups Classified As Held For Sale" as potentially liquid? These are 70,700,000 and 375,500,000. These are held for sale, so they might be convertible to cash. But they're not typically included in net debt calculations. Final answer: FFO / Net Debt = 2,072,700,000 / 8,615,000,000 = 0.2406 I'll round to 0.24 or present as 24.1%. Let me use the decimal form as it's more common for this ratio. Actually, let me verify my net debt calculation once more: - Longterm Borrowings: 8,416,700,000 - Shortterm Borrowings: 444,100,000 - Current Portion Of Longterm Borrowings: 1,909,300,000 Total = 10,770,100,000 Cash and Cash Equivalents: 2,155,100,000 Net Debt = 8,615,000,000 Yes. FFO = 2,072,700,000 Ratio = 0.2406... Let me express this with a few decimal places: 0.241 or 24.1%. Actually, I want to double-check one thing. Is "Cash Flows From Used In Operations Before Changes In Working Capital" the same as "Funds From Operations"? In many European annual reports and credit analyses, yes. But let me also consider if we should use a different measure. Alternative FFO calculation from the P&L: EBITDA = Profit Loss From Operating Activities + Depreciation Amortisation = 1,333,500,000 + 725,700,000 = 2,059,200,000 Then FFO = EBITDA - Cash Interest - Cash Taxes +/- other items = 2,059,200,000 - 154,800,000 - 380,100,000 + ... = 1,524,300,000 + other items This is lower than 2,072,700,000. The difference is because we're starting from different points. Actually, "Cash Flows From Used In Operations Before Changes In Working Capital" includes more adjustments than just EBITDA - cash interest - cash taxes. It also includes adjustments for provisions, gains/losses, and other items. I think 2,072,700,000 is the more comprehensive and correct FFO proxy from the cash flow statement. One final check: let me see if I should use 2021 or 2022 net debt, or average. For a ratio describing 2022 performance, using 2022 year-end net debt is common. However, some methodologies use average debt to better match the flow with the stock. If the question asks for "2022" ratio, I'll use 2022 year-end net debt with 2022 FFO. FFO / Net Debt = 2,072,700,000 / 8,615,000,000 = 0.2406 Let me present this as 0.24 or more precisely 0.241. 0.241