# FFO / Net Debt Ratio Analysis for EDF 2022

## Reasoning:

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

S&P's FFO formula is:
**FFO = Net Income + Depreciation & Amortization - Changes in Working Capital + Other Adjustments**

From the data for 2022-01-01 to 2023-01-01:
- Net Income (Profit Loss from Continuing Operations): -18,231,000,000 EUR
- Depreciation & Amortization Expense: 11,079,000,000 EUR
- Impairment Loss/Reversal: 1,762,000,000 EUR (add back)
- Change in Working Capital: -8,301,000,000 EUR (already negative, represents use of cash)
- Interest Expense: 1,730,000,000 EUR (add back for operating cash flow)

However, using the cash flow statement directly (more reliable):
- Operating Cash Flow: -7,425,000,000 EUR

For S&P FFO, we typically start with:
**Net Income + Depreciation & Amortization + Interest Expense (after-tax adjustment)**

More precisely using S&P methodology:
- Net Income: -18,231,000,000 EUR
- Add: Depreciation & Amortization: 11,079,000,000 EUR
- Add: Interest Expense (pre-tax): 1,730,000,000 EUR
- Add: Impairment reversals: 1,762,000,000 EUR
- Less: Changes in WC impact already in operating CF

**FFO ≈ -18,231 + 11,079 + 1,730 + 1,762 = -3,660,000,000 EUR**

### Step 2: Calculate Net Debt

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

From balance sheet as of 2023-01-01 (end of 2022):
- Other Noncurrent Financial Liabilities: 71,058,000,000 EUR
- Other Current Financial Liabilities: 71,844,000,000 EUR
- Less: Cash and Cash Equivalents: 10,948,000,000 EUR

**Total Debt ≈ 71,058 + 71,844 = 142,902,000,000 EUR**
**Net Debt = 142,902 - 10,948 = 131,954,000,000 EUR**

### Step 3: Calculate FFO / Net Debt Ratio

**Ratio = FFO / Net Debt**
**Ratio = -3,660 / 131,954 = -0.0277**

This negative ratio reflects the significant operating loss during 2022 due to the energy crisis impact on fuel costs.

<answer>-0.028</answer>