# Reasoning for S&P Adjusted Leverage Trend Analysis

## Step 1: Calculate EBITDA for both periods

**EBITDA Formula:** Operating Profit + Depreciation & Amortization

**For 2022 (2022-01-01 to 2023-01-01):**
- Profit from Operating Activities: 19,774 million DKK
- Depreciation, Amortisation and Impairment: 12,283 million DKK
- **EBITDA 2022: 32,057 million DKK**

**For 2021 (2021-01-01 to 2022-01-01):**
- Profit from Operating Activities: 16,195 million DKK
- Depreciation, Amortisation and Impairment: 8,101 million DKK
- **EBITDA 2021: 24,296 million DKK**

## Step 2: Calculate Net Debt for both periods

**Net Debt Formula:** Total Borrowings + Lease Liabilities - Cash

**For 2023-01-01 (end of 2022):**
- Long-term Borrowings: 60,451 million DKK
- Short-term Borrowings: 2,830 million DKK
- Noncurrent Lease Liabilities: 7,697 million DKK
- Current Lease Liabilities: 569 million DKK
- Cash: 16,178 million DKK
- **Gross Debt: 71,547 million DKK**
- **Net Debt: 71,547 - 16,178 = 55,369 million DKK**

**For 2022-01-01 (end of 2021):**
- Long-term Borrowings: 31,502 million DKK
- Short-term Borrowings: 19,493 million DKK
- Noncurrent Lease Liabilities: 6,812 million DKK
- Current Lease Liabilities: 720 million DKK
- Cash: 8,624 million DKK
- **Gross Debt: 58,527 million DKK**
- **Net Debt: 58,527 - 8,624 = 49,903 million DKK**

## Step 3: Calculate Net Debt / EBITDA ratios

**2022 (end of 2022):** 55,369 / 32,057 = **1.73x**

**2021 (end of 2021):** 49,903 / 24,296 = **2.05x**

## Step 4: Calculate the year-on-year gap

**Gap = 2021 ratio - 2022 ratio = 2.05x - 1.73x = 0.32x**

## Step 5: Assess against the Stable threshold

According to the definition:
- **Stable:** Gap is within ±0.3x
- **Improving:** Gap is lower than 0.3x (leverage ratios improve)
- **Deteriorating:** Gap is higher than 0.3x (leverage ratios deteriorate)

The calculated gap of **0.32x exceeds the 0.3x threshold**, indicating that the leverage ratio improved by more than the "Stable" threshold.

## Conclusion

While the leverage improved (Net Debt/EBITDA decreased from 2.05x to 1.73x), the magnitude of improvement exceeds the ±0.3x tolerance band for a "Stable" assessment. Therefore, the trend is classified as **Improving**.

<answer>Improving</answer>