# Analysis of Fortum's Adjusted Leverage Trend for 2022

## Step 1: Calculate Comparable EBITDA for both years

From the data provided:
- **Comparable EBITDA 2022** (2022-01-01 to 2023-01-01): **2,436 million EUR**
- **Comparable EBITDA 2021** (2021-01-01 to 2022-01-01): **2,016 million EUR**

## Step 2: Calculate Net Debt for both years

**As of 2023-01-01 (end of 2022):**
- Liquid Funds: 3,919 million EUR
- Noncurrent Financial Liabilities: 3,658 million EUR
- Current Financial Liabilities: 4,127 million EUR
- Total Debt: 7,785 million EUR
- Net Debt = 7,785 - 3,919 = **3,866 million EUR**

**As of 2022-01-01 (end of 2021):**
- Liquid Funds: 7,592 million EUR
- Noncurrent Financial Liabilities: 8,701 million EUR
- Current Financial Liabilities: 8,519 million EUR
- Total Debt: 17,220 million EUR
- Net Debt = 17,220 - 7,592 = **9,628 million EUR**

## Step 3: Calculate Net Debt / Comparable EBITDA ratios

**2022 (year ending 2023-01-01):**
Net Debt / Comparable EBITDA = 3,866 / 2,436 = **1.59x**

**2021 (year ending 2022-01-01):**
Net Debt / Comparable EBITDA = 9,628 / 2,016 = **4.77x**

## Step 4: Calculate the year-on-year change

Gap = 1.59x - 4.77x = **-3.18x**

## Step 5: Assess trend against criteria

The definition states:
- **Improving**: Gap < -0.3x
- **Stable**: Gap within ±0.3x
- **Deteriorating**: Gap > +0.3x

The calculated gap of -3.18x is significantly below -0.3x, indicating a substantial improvement in the leverage ratio.

## Conclusion

Fortum's adjusted leverage (Net Debt / Comparable EBITDA) improved dramatically from 4.77x in 2021 to 1.59x in 2022, driven by:
1. Significant reduction in net debt (from 9,628 to 3,866 million EUR)
2. Modest increase in Comparable EBITDA (from 2,016 to 2,436 million EUR)

The gap of -3.18x far exceeds the -0.3x threshold for improvement.

<answer>Improving</answer>