# FFO / Net Debt Ratio Calculation for REDEIA - 2022

## S&P FFO Methodology

According to S&P Global Ratings, FFO (Funds From Operations) is calculated as:
**FFO = Net Income + Depreciation & Amortization - Changes in Working Capital (Cash Flow adjusted)**

However, the more commonly used S&P approach for FFO uses operating cash flow adjusted for interest paid:
**FFO = Operating Cash Flow + Interest Paid**

## Data Extraction for 2022 (Year ending 2022-01-01)

From the cash flow statement for period 2021-01-01 to 2022-01-01:
- **Operating Cash Flow**: 1,605,176,000 EUR
- **Interest Paid (Operating)**: 121,920,000 EUR

## FFO Calculation

FFO = Operating Cash Flow + Interest Paid
FFO = 1,605,176,000 + 121,920,000
**FFO = 1,727,096,000 EUR**

## Net Debt Calculation

Net Debt = Total Financial Liabilities - Cash and Cash Equivalents

As of 2022-01-01:
- **Noncurrent Financial Liabilities**: 5,953,434,000 EUR
- **Current Financial Liabilities**: 2,144,425,000 EUR
- **Total Financial Liabilities**: 8,097,859,000 EUR
- **Less: Cash and Cash Equivalents**: 1,574,427,000 EUR

**Net Debt = 8,097,859,000 - 1,574,427,000 = 6,523,432,000 EUR**

## FFO / Net Debt Ratio

FFO / Net Debt = 1,727,096,000 / 6,523,432,000
FFO / Net Debt = **0.265**

This represents 26.5%, indicating that annual FFO covers approximately 26.5% of net debt, or conversely, net debt is approximately 3.8x FFO.

<answer>0.265</answer>