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

## Step 1: Calculate FFO (Funds From Operations)

FFO is typically calculated as:
**FFO = Net Income + Depreciation & Amortization - Changes in Working Capital adjustments**

For the period 2022-01-01 to 2023-01-01:
- Net Income (Profit Loss Attributable to Owners of Parent): EUR 1,717,012,000
- Depreciation and Amortization Expense: EUR 462,694,000
- Impairment Loss (net of reversals): EUR 197,761,000 - EUR 125,973,000 = EUR 71,788,000

**FFO = 1,717,012,000 + 462,694,000 + 71,788,000 = 2,251,494,000 EUR**

Alternatively, using the cash flow statement more directly:
- Cash Flow from Operating Activities: EUR 2,019,859,000

This is a reasonable proxy for FFO and includes the adjustments for working capital changes.

## Step 2: Calculate Net Debt

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

As of 2023-01-01 (end of 2022 period):
- 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: EUR 409,252,000

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

## Step 3: Calculate FFO / Net Debt Ratio

Using Operating Cash Flow as FFO proxy:
**FFO / Net Debt = 2,019,859,000 / 3,544,604,000 = 0.57**

Using the adjusted FFO calculation:
**FFO / Net Debt = 2,251,494,000 / 3,544,604,000 = 0.64**

The cash flow statement figure is more conservative and directly reflects funds generated. Using the operating cash flow approach:

<answer>0.57</answer>