I'll work through this step-by-step.

## Step 1: Identify the relevant industry

Acciona SA is a Spanish conglomerate with significant operations in renewable energy (through Acciona Energía), infrastructure/construction, and other services. Given its diverse portfolio spanning unregulated power (renewables), infrastructure, and construction, I'll apply a blended approach but primarily use the **Unregulated Power and Gas** methodology combined with general corporate methodology, as renewable energy is a core business.

## Step 2: Estimate 2021 Adjusted EBITDA

From the income statement for FY2021 (period 2021-01-01 to 2022-01-01):

**Reconstructing EBITDA:**
- Revenue: 8,104M
- Other Income: 563M
- Changes in Inventories: -110M
- Raw Materials: -1,980M
- Employee Benefits: -1,787M
- Other Expenses: -3,621M
- Resultado de Puesta en Equivalencia Operativa (operating equity method): +94M

**Operating Profit (EBIT):** 829M (given as "Profit Loss From Operating Activities")

- Add back: Depreciation/Amortization/Provisions: 714M
- Add back: Impairment: -67M (this is a reversal, so net impairment = -67M meaning a gain)

**EBITDA = EBIT + D&A + Impairment**
EBITDA = 829 + 714 + (-67) = 1,476M

Wait, impairment reversal is already included in operating profit. Let me recalculate:
- EBIT = 829M (already includes D&A of 714M and impairment of -67M as deductions)
- EBITDA = EBIT + D&A = 829 + 714 = 1,543M

**S&P Adjustments:**
- Lease adjustment: Add back lease depreciation (part of D&A) — approximated from ROU assets. Lease liabilities (2021): NC 430 + C 68 = 498M. Lease payments ≈ 90M (from financing lease payments). S&P capitalizes operating leases and adds back lease expense, adding an imputed interest. Approximate lease depreciation component already in D&A.
- For S&P, we add operating lease rents back and subtract depreciation of ROU (already done via EBITDA). The net effect is approximately adding the interest portion of lease payments. Approximate interest on leases ≈ ~20M.

**Adjusted EBITDA 2021 ≈ 1,543 + 20 ≈ 1,563M**

Let me simplify: S&P EBITDA typically = EBITDA + operating lease adjustments. Since IFRS 16 already capitalizes leases, the main adjustment is minimal. I'll use ~1,543M as base and add minor adjustments.

**Adjusted EBITDA 2021 ≈ 1,543M**

## Step 3: Estimate 2021 FFO

FFO = Adjusted EBITDA - cash interest - cash taxes

- Cash interest paid: 206M (from cash flow statement)
- Cash interest received: 23M → Net cash interest: 206 - 23 = 183M
- Cash taxes: 82M

**FFO 2021 = 1,543 - 183 - 82 = 1,278M**

## Step 4: Estimate 2021 Adjusted Debt

Balance sheet as of 2022-01-01 (end of FY2021):

**Reported debt:**
- NC bonds/securities: 2,364M
- NC loans: 2,073M
- Current bonds/securities: 1,666M
- Current loans: 280M
- Total reported debt = 2,364 + 2,073 + 1,666 + 280 = 6,383M

**Lease liabilities:** NC 430 + C 68 = 498M

**Cash and equivalents:** 2,318M
- S&P typically only nets surplus cash. For a conglomerate with construction operations, I'll assume ~75% is operating cash needs. Eligible cash ≈ 2,318 × 0.25 ≈ 580M. However, a more standard S&P approach might be more conservative. Let me use a modest deduction of ~500M.

Actually, for S&P, they often don't net much cash for companies with significant operating needs. I'll assume eligible cash = ~500M.

**Adjusted Debt 2021 = 6,383 + 498 - 500 = 6,381M**

## Step 5: 2021 Adjusted Debt / Adjusted EBITDA

= 6,381 / 1,543 = **4.14x**

## Step 6: 2021 FFO / Adjusted Debt

= 1,278 / 6,381 = **20.0%**

## Step 7: Estimate 2022 Adjusted EBITDA

From FY2022 (period 2022-01-01 to 2023-01-01):

- EBIT (Operating Profit): 1,334M
- D&A: 762M
- Impairment reversal: -15M (already in EBIT)

**EBITDA = 1,334 + 762 = 2,096M**

**Adjusted EBITDA 2022 ≈ 2,096M**

## Step 8: Estimate 2022 FFO

- Cash interest paid: 209M
- Cash interest received: 40M → Net: 169M
- Cash taxes: 215M

**FFO 2022 = 2,096 - 169 - 215 = 1,712M**

## Step 9: Estimate 2022 Adjusted Debt

Balance sheet as of 2023-01-01:

**Reported debt:**
- NC bonds: 3,101M
- NC loans: 2,624M
- Current bonds: 1,139M
- Current loans: 553M
- Total = 3,101 + 2,624 + 1,139 + 553 = 7,417M

**Lease liabilities:** NC 439 + C 72 = 511M

**Cash:** 2,360M → Eligible cash ≈ 500M (similar assumption)

**Adjusted Debt 2022 = 7,417 + 511 - 500 = 7,428M**

## Step 10: 2022 Adjusted Debt / Adjusted EBITDA

= 7,428 / 2,096 = **3.54x**

## Step 11: 2022 FFO / Adjusted Debt

= 1,712 / 7,428 = **23.1%**

## Step 12: Classification

**Signal 1 - Leverage:** 3.54x - 4.14x = **-0.60x** → ≤ -0.2x → **Improving**

**Signal 2 - Cash flow coverage:** 23.1% - 20.0% = **+3.1pp = +0.031** → ≥ +0.03 → **Improving**

Both signals agree: **Improving**

<answer>Improving</answer>