# FFO / Net Debt Ratio Calculation for VERBUND AG (2022)

## Step 1: Calculate FFO (Funds From Operations) using S&P Methodology

S&P's FFO formula is:
**FFO = Net Income + Depreciation & Amortization + Impairment Losses - Impairment Reversals + Deferred Taxes ± Other adjustments**

From the data for 2022-01-01 to 2023-01-01 (fiscal year 2022):

- Net Income (Profit Loss): EUR 1,948,767,000
- Depreciation & Amortization: EUR 462,694,000
- Impairment Loss: EUR 197,761,000
- Reversal of Impairment Loss: EUR (125,973,000)
- Deferred Tax Liabilities change: EUR 486,851,000 - 797,055,000 = EUR (310,204,000) [decrease in deferred tax liability adds back]

However, using a simpler S&P approach focusing on cash generation:
- Start with Operating Cash Flow: EUR 2,019,859,000
- This already reflects most adjustments

**FFO ≈ EUR 2,019,859,000** (using operating cash flow as proxy)

Alternatively, using the addback method:
**FFO = 1,948,767,000 + 462,694,000 + 197,761,000 - 125,973,000 = EUR 2,483,249,000**

I'll use the more conservative operating cash flow figure: **EUR 2,019,859,000**

## Step 2: Calculate Net Debt

**Net Debt = Total Debt - Cash and Cash Equivalents**

Total Debt (as of 2023-01-01, end of fiscal year 2022):
- Noncurrent Financial Liabilities: EUR 2,844,559,000
- Current Financial Liabilities: EUR 1,109,297,000
- Total Debt: EUR 3,953,856,000

Cash and Cash Equivalents (as of 2023-01-01):
- EUR 409,252,000

**Net Debt = EUR 3,953,856,000 - EUR 409,252,000 = EUR 3,544,604,000**

## Step 3: Calculate FFO / Net Debt Ratio

**FFO / Net Debt = EUR 2,019,859,000 / EUR 3,544,604,000 = 0.5694**

<answer>0.57</answer>