# FFO / Net Debt Ratio Calculation for HERA S.P.A. (2022)

## S&P Methodology Overview
S&P calculates Funds From Operations (FFO) as:
- **FFO = Net Income + Depreciation & Amortization - Changes in Working Capital**

And Net Debt as:
- **Net Debt = Total Debt - Cash & Cash Equivalents**

## Step 1: Calculate FFO for 2022 (2022-01-01 to 2023-01-01)

**Net Income (Profit Loss):** 305,300,000 EUR

**Add: Depreciation & Amortization:**
- Amortisation Depreciation And Provisions: 667,100,000 EUR

**Less: Changes in Working Capital:**
From the cash flow statement, the "Increase Decrease In Working Capital" for 2022 was: -927,600,000 EUR

This negative figure means working capital increased (cash use), so we subtract it (or add the negative):

**FFO Calculation:**
FFO = 305,300,000 + 667,100,000 - (-927,600,000)
FFO = 305,300,000 + 667,100,000 + 927,600,000
FFO = 1,900,000,000 EUR

## Step 2: Calculate Net Debt at End of 2022 (2022-01-01)

**Total Debt (Financial Liabilities):**
- Noncurrent Financial Liabilities: 3,716,000,000 EUR
- Current Financial Liabilities: 499,700,000 EUR
- Total Debt = 4,215,700,000 EUR

**Less: Cash and Cash Equivalents:**
- Cash and Cash Equivalents (2022-01-01): 885,600,000 EUR

**Net Debt:**
Net Debt = 4,215,700,000 - 885,600,000 = 3,330,100,000 EUR

## Step 3: Calculate FFO / Net Debt Ratio

FFO / Net Debt = 1,900,000,000 / 3,330,100,000 = 0.5706

<answer>0.57</answer>