# Analysis of ITALGAS S.P.A. Leverage Trend (2022-2023)

## Step 1: Calculate Net Debt for Both Years

**2022-01-01 (End of 2021):**
- Short Term Financial Liabilities: 591,188,000 EUR
- Long Term Financial Liabilities: 5,785,707,000 EUR
- Total Debt: 6,376,895,000 EUR
- Cash and Cash Equivalents: 1,391,763,000 EUR
- Current Financial Assets: 5,120,000 EUR
- **Net Debt 2022 = 6,376,895,000 - 1,391,763,000 - 5,120,000 = 4,980,012,000 EUR**

**2023-01-01 (End of 2022):**
- Short Term Financial Liabilities: 142,437,000 EUR
- Long Term Financial Liabilities: 6,402,913,000 EUR
- Total Debt: 6,545,350,000 EUR
- Cash and Cash Equivalents: 451,946,000 EUR
- Current Financial Assets: 5,770,000 EUR
- **Net Debt 2023 = 6,545,350,000 - 451,946,000 - 5,770,000 = 6,087,634,000 EUR**

## Step 2: Calculate EBITDA for Both Periods

**2022 (2021-01-01 to 2022-01-01):**
- Operating Profit: 583,231,000 EUR
- Depreciation & Amortisation: 444,387,000 EUR
- Impairment: 864,000 EUR
- **EBITDA 2022 = 583,231,000 + 444,387,000 + 864,000 = 1,028,482,000 EUR**

**2023 (2022-01-01 to 2023-01-01):**
- Operating Profit: 641,338,000 EUR
- Depreciation & Amortisation: 478,290,000 EUR
- Impairment: 895,000 EUR
- **EBITDA 2023 = 641,338,000 + 478,290,000 + 895,000 = 1,120,523,000 EUR**

## Step 3: Calculate Net Debt / EBITDA Ratios

**2022 Ratio:**
Net Debt / EBITDA 2022 = 4,980,012,000 / 1,028,482,000 = **4.84x**

**2023 Ratio:**
Net Debt / EBITDA 2023 = 6,087,634,000 / 1,120,523,000 = **5.43x**

## Step 4: Calculate Year-on-Year Gap

**Gap = 5.43x - 4.84x = 0.59x**

## Step 5: Assessment

According to the definition:
- **Improving**: Gap < 0.3x (ratio decreases)
- **Stable**: Gap between ±0.3x
- **Deteriorating**: Gap > 0.3x (ratio increases)

The gap of **0.59x** exceeds the ±0.3x threshold, indicating a deterioration in the leverage ratio year-on-year. Despite improving operating performance (EBITDA increased by 8.9%), the significant increase in net debt (due to substantial M&A activity and capital investments) resulted in a worse leverage position.

<answer>Deteriorating</answer>