I need to calculate the Net Debt / EBITDA ratio for 2022 using the S&P methodology. First, let me identify what I need: 1. Net Debt at year-end 2022 (which is 2023-01-01 in this data, since the dates represent balance sheet dates) 2. EBITDA for 2022 (the period 2022-01-01 to 2023-01-01) **Step 1: Calculate Net Debt** Net Debt = Total Debt - Cash and Cash Equivalents Total Debt includes: - Short-term borrowings - Current portion of long-term borrowings - Long-term borrowings - Lease liabilities (both current and non-current) - S&P typically includes these From the data at 2023-01-01 (year-end 2022): - Short-term borrowings: 4,446,000,000 EUR - Current portion of long-term borrowings: 3,097,000,000 EUR - Long-term borrowings: 19,374,000,000 EUR - Current lease liabilities: 884,000,000 EUR - Noncurrent lease liabilities: 4,067,000,000 EUR Total Debt = 4,446 + 3,097 + 19,374 + 884 + 4,067 = 31,868,000,000 EUR Cash and Cash Equivalents at 2023-01-01: 10,155,000,000 EUR Net Debt = 31,868 - 10,155 = 21,713,000,000 EUR **Step 2: Calculate EBITDA** For S&P methodology, EBITDA is typically calculated as: EBITDA = Operating Profit + Depreciation & Amortization + Impairment losses + Other adjustments Or from the cash flow approach, I can reconstruct: EBITDA = Profit from Operating Activities + Depreciation and Amortization - Other items Let me use the standard approach: - Profit Loss From Operating Activities (2022-01-01 to 2023-01-01): 17,510,000,000 EUR But this is already after D&A. Let me check what adjustments are needed. Actually, looking at the cash flow statement adjustments: - Adjustments For Depreciation And Amortisation Expense: 7,205,000,000 EUR So EBIT = Operating Profit + ... Wait, let me re-read. "Profit Loss From Operating Activities" is typically EBIT in many European presentations, or it could be already after some items. Looking at the cash flow reconciliation: - Profit Loss From Operating Activities: 17,510,000,000 EUR - Adjustments For Depreciation And Amortisation Expense: 7,205,000,000 EUR This suggests Operating Profit (EBIT) = 17,510,000,000 EUR, and we add back D&A to get EBITDA. But wait - the cash flow starts with "Profit Loss From Operating Activities" and then adds back D&A. This means "Profit Loss From Operating Activities" is likely after D&A, so it's more like EBIT. Actually, let me check: in the cash flow statement, the starting point is typically profit before tax or operating profit, and then adjustments are made. Looking more carefully at European utilities/energy companies, "Profit Loss From Operating Activities" is typically EBIT (earnings before interest and taxes). So EBITDA = EBIT + D&A + Impairments (if EBIT doesn't already include them) From the P&L: - Profit Loss From Operating Activities: 17,510,000,000 EUR - Depreciation And Amortisation Expense: 7,205,000,000 EUR - Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss: 1,140,000,000 EUR (this is an expense/loss, so it reduced operating profit) - Write Off Of Tangible And Intangible Assets: 599,000,000 EUR If "Profit Loss From Operating Activities" is after these items, then: EBITDA = 17,510 + 7,205 + 1,140 + 599 = 26,454,000,000 EUR But let me verify by looking at the cash flow. The cash flow from operating activities reconciliation starts with profit and adds back non-cash items. Cash flow from operating activities = 17,460,000,000 EUR The reconciliation items include: - D&A: +7,205 - Impairment: +1,140 - Write-offs: +599 - Undistributed profits of equity investments: +1,841 (this is not in EBITDA) - Gains on disposal: -524 - Dividend income: -351 - Interest income: -159 - Interest expense: +1,033 - Income tax expense: +8,088 - Other adjustments: -2,773 Wait, this is getting complex. Let me think about this differently. For S&P methodology, EBITDA typically includes: - Operating profit (before interest, taxes, and exceptional items) - Plus depreciation and amortization - Plus impairment charges Looking at the P&L structure: Revenue And Other Income: 133,687 Total Purchases Services And Other Costs: 102,529 Employee Benefits Expense: 3,015 Other Operating Income Expense: -1,736 (negative means expense) Depreciation And Amortisation Expense: 7,205 Impairment Loss Reversal Of Impairment Loss: 1,140 Write Off Of Tangible And Intangible Assets: 599 Let me verify: 133,687 - 102,529 - 3,015 + (-1,736) - 7,205 - 1,140 - 599 = 17,463... close to 17,510 (small rounding) Actually: 133,687 - 102,529 = 31,158 31,158 - 3,015 = 28,143 28,143 - 1,736 = 26,407 26,407 - 7,205 = 19,202 19,202 - 1,140 = 18,062 18,062 - 599 = 17,463 Hmm, that's not exactly 17,510. Let me check if Other Operating Income Expense of -1,736 is actually income or expense. The negative sign suggests it's a net expense or the line item is "Other Operating Income Expense" with negative meaning expense. Actually, looking more carefully: "Other Operating Income Expense" 2022-01-01 - 2023-01-01: -1736000000 EUR This negative value likely means net expense of 1,736. But in my calculation I subtracted it as expense. Let me re-read: if it's -1,736, that means it's a negative income = expense, so I should subtract it (or add the absolute value as expense). Wait, I think I need to be more careful. Let me assume: - If "Other Operating Income Expense" is negative, it's net expense - The total should equal Operating Profit Let me try: Revenue 133,687 + Other Income 1,175 = 134,862? No, "Revenue And Other Income" is already 133,687. Actually "Revenue From Contracts With Customers" = 132,512 and "Other Income And Revenues" = 1,175, so total = 133,687. Now costs: Total Purchases Services And Other Costs = 102,529 Employee Benefits = 3,015 Other Operating Income Expense = -1,736 (this is negative, meaning expense or... wait) Actually, if "Other Operating Income Expense" is -1,736, this could mean: - It's presented as "Income (Expense)" and negative means net expense - Or it's the net result of other operating items Let me check with the given operating profit: 17,510 133,687 (Revenue and Other Income) - 102,529 (Purchases) - 3,015 (Employee) + (-1,736) (Other Operating) - 7,205 (D&A) - 1,140 (Impairment) - 599 (Write-offs) = 17,463 Still not 17,510. Difference is 47. Could be rounding or I'm misinterpreting something. Actually, let me re-check: "Impairment Loss Reversal Of Impairment Loss" - if this is positive 1,140, it means impairment loss (expense), not reversal. The name is confusing but the positive value in the context of expenses suggests it's an impairment loss. Let me try another approach: maybe "Other Operating Income Expense" being negative means it's actually income? No, that doesn't make sense with the naming. Let me just use the cash flow approach for EBITDA: From the cash flow statement, operating cash flow before working capital changes: = Profit from Operating Activities + D&A + Impairment + Write-offs + other non-cash adjustments - financial items + tax Actually, for S&P EBITDA, the standard formula is: EBITDA = Operating Profit + Depreciation + Amortization + Impairment losses Where Operating Profit is before these items. If "Profit Loss From Operating Activities" = 17,510 is EBIT (after D&A, impairments, write-offs), then: EBITDA = 17,510 + 7,205 + 1,140 + 599 = 26,454 But wait - I need to check if 17,510 already includes or excludes these items. In the cash flow reconciliation, "Profit Loss From Operating Activities" is the starting point, and then "Adjustments For Depreciation And Amortisation Expense" is added back. This clearly shows that 17,510 is AFTER D&A, so it's EBIT. Similarly, impairment and write-offs are added back, showing they're also already deducted. So EBIT = 17,510,000,000 EUR But for EBITDA, we add back: - D&A: 7,205 - Impairment: 1,140 - Write-offs: 599 Wait - are impairments and write-offs part of operating profit? Let me check if they're already in 17,510. From the cash flow: starting point is 17,510, then add back D&A (7,205), impairment (1,140), write-offs (599). This means 17,510 already had these deducted. So EBIT = 17,510 + 1,140 + 599 = 19,249? No wait, that's not right either. Actually, let me think again. "Profit Loss From Operating Activities" could be: - If it's like "Operating Profit" in IFRS, it typically includes D&A and impairments - The cash flow adds these back to get to pre-working capital cash flow So EBIT = 17,510 (this includes impairments and write-offs but excludes interest and taxes) Wait no - 17,510 is "Profit Loss From Operating Activities" which should be before interest and taxes. Actually in many European annual reports, "Operating Profit" or "Profit from Operating Activities" is EBIT. Let me verify: EBIT + Finance Income/Cost = Profit Before Tax? 17,510 (Operating) + (-925) (Finance Income Cost) + 5,464 (Investment Income Expense) = ? Wait, the structure is: Profit Loss From Operating Activities: 17,510 Finance Income Cost: -925 (net expense) Investment Income Expense: 5,464 Profit Loss Before Tax: 22,049 Check: 17,510 - 925 + 5,464 = 22,049? That's 17,510 - 925 = 16,585; 16,585 + 5,464 = 22,049. Yes! So 17,510 is indeed before finance costs and investment income, so it's EBIT-like but before investment income. Actually, this is more like "Operating Profit" or EBIT excluding associates/JVs. Let me call it Adjusted EBIT. For EBITDA, S&P typically wants: - EBIT (or operating profit) - Plus D&A - Plus impairment losses So if 17,510 is after D&A, impairments, and write-offs: EBITDA = 17,510 + 7,205 + 1,140 + 599 = 26,454 But wait - I need to check if 17,510 is truly after all these, or if some are already added back in the presentation. Actually, looking at typical IFRS income statements, "Profit from Operating Activities" or "Operating Profit" is usually presented after all operating costs including D&A and impairments. So EBITDA = 17,510 + 7,205 + 1,140 + 599 = 26,454 million EUR But let me also consider: S&P sometimes uses "Adjusted EBITDA" which might include dividends from investments, equity-accounted profits, etc. However, standard S&P Net Debt/EBITDA uses regular EBITDA. Actually, I need to be more careful. S&P Global Ratings methodology for Net Debt/EBITDA: Net Debt = Short-term debt + Long-term debt + Current portion of long-term debt - Cash and cash equivalents - Liquid investments Sometimes they also include certain adjustments. For EBITDA, S&P typically uses: EBITDA = Operating profit + D&A + Impairment losses + Restructuring charges (if one-time) But they may also adjust for non-recurring items. Let me proceed with my calculation: **Net Debt calculation (S&P methodology):** Debt items at 2023-01-01 (year-end 2022): - Short-term borrowings: 4,446,000,000 - Current portion of long-term borrowings: 3,097,000,000 - Long-term borrowings: 19,374,000,000 Total borrowings = 26,917,000,000 EUR Lease liabilities: - Current lease liabilities: 884,000,000 - Noncurrent lease liabilities: 4,067,000,000 Total lease liabilities = 4,951,000,000 EUR Total Debt = 26,917 + 4,951 = 31,868,000,000 EUR Cash and Cash Equivalents = 10,155,000,000 EUR Net Debt = 31,868 - 10,155 = 21,713,000,000 EUR Note: S&P may or may not include lease liabilities in total debt for this ratio. Under IFRS 16, leases are typically included in debt-like obligations. Let me check if the current methodology includes them. Actually, looking at S&P's corporate methodology, they typically include lease liabilities in total debt. **EBITDA calculation:** From the P&L for period 2022-01-01 to 2023-01-01: - Profit Loss From Operating Activities: 17,510,000,000 - Add: Depreciation And Amortisation Expense: 7,205,000,000 - Add: Impairment Loss Reversal Of Impairment Loss Recognised In Profit Or Loss: 1,140,000,000 - Add: Write Off Of Tangible And Intangible Assets: 599,000,000 EBITDA = 17,510 + 7,205 + 1,140 + 599 = 26,454,000,000 EUR Wait, I need to double-check if "Profit Loss From Operating Activities" is before or after these items. From the cash flow reconciliation: - Start with Profit Loss From Operating Activities: 17,510 - Add back Depreciation And Amortisation: 7,205 - Add back Impairment: 1,140 - Add back Write-offs: 599 This confirms 17,510 is AFTER these items. So: EBITDA = 17,510 + 7,205 + 1,140 + 599 = 26,454 But actually, I should verify: is "Profit Loss From Operating Activities" the same as what we'd call EBIT? And does it include or exclude items? Let me also check if S&P would use a different EBITDA. Sometimes they adjust for non-recurring items, but I don't see obvious large non-recurring items here. Actually, I want to double-check my Net Debt. S&P methodology specifically: "Net debt generally comprises all short- and long-term interest-bearing debt (including bank overdrafts, commercial paper, bonds, and loans), finance lease obligations, and similar interest-bearing obligations, minus cash and cash equivalents and marketable securities." So yes, leases are included. Also, I should check if there are any "Current Financial Assets At Fair Value Through Profit Or Loss" that should be deducted as liquid investments. These are 8,251,000,000 EUR. S&P says "cash and cash equivalents and marketable securities" or "liquid investments". The "Current Financial Assets At Fair Value Through Profit Or Loss" of 8,251 million might include some liquid investments, but these could also include derivatives and trading assets. Without more detail, I'll stick with just Cash and Cash Equivalents. Actually, let me reconsider: S&P sometimes deducts "readily marketable securities" or "liquid financial assets". The 8,251 million in "Current Financial Assets At Fair Value Through Profit Or Loss" likely includes some liquid securities. However, without knowing the exact composition, I'll be conservative and not deduct these. But wait - I should also check "Other Current Financial Assets" of 1,504 million. For a more standard approach, let me just use Cash and Cash Equivalents as the deduction, which is common when detailed breakdown isn't available. So Net Debt = 21,713,000,000 EUR EBITDA = 26,454,000,000 EUR Net Debt / EBITDA = 21,713 / 26,454 = 0.8208... Let me recalculate more precisely: 21,713 / 26,454 = ? 21,713 ÷ 26,454 = 0.8208... Let me verify: 26,454 × 0.82 = 21,692.28 21,713 - 21,692.28 = 20.72 20.72 / 26,454 = 0.00078 So about 0.821 or 0.82 But wait, I need to reconsider if "Profit Loss From Operating Activities" includes the impairment and write-offs, or if these are already presented below that line. Looking at the income statement items again: "Profit Loss From Operating Activities" 2022-01-01 - 2023-01-01: 17510000000 EUR The items above it in a typical income statement would be: - Revenue - Costs - D&A - Impairments - etc. And the cash flow adds back D&A, impairment, write-offs from this starting point. So yes, 17,510 is after all these. Actually, let me also verify my EBITDA by another approach. Sometimes EBITDA is calculated as: EBITDA = Revenue - Cash Operating Costs Or from the cash flow: Cash from operations before working capital = EBITDA - Cash taxes + other items Actually, looking at the cash flow: Cash Flows From Used In Operating Activities = 17,460 This includes working capital changes, dividends received, interest paid/received, taxes paid. Let me try to back out EBITDA from cash flow: Cash from ops = 17,460 Adjustments: - Increase Decrease In Working Capital: -1,279 (positive means cash outflow, so subtract) Wait, the sign convention: "Increase Decrease In Working Capital" 2022-01-01 - 2023-01-01: 1279000000 EUR In cash flow statements, positive usually means cash inflow from decrease in working capital, or... actually let me check. Looking at the components: - Inventories: -2,528 (increase, cash outflow) - Trade receivables: -1,036 (increase, cash outflow) - Trade payables: +2,284 (increase, cash inflow) - Provisions: +2,028 - Other assets/liabilities: -2,027 - Employee benefits: +39 Sum: -2,528 - 1,036 + 2,284 + 2,028 - 2,027 + 39 = -1,240? But total is 1,279. Hmm, signs are confusing. Let me just trust the total. Actually, the cash flow reconciliation gives us: Profit from Operating Activities: 17,510 + D&A: 7,205 + Impairment: 1,140 + Write-offs: 599 + Equity-accounted undistributed profits: 1,841 - Gains on disposal: -524 - Dividend income: -351 - Interest income: -159 + Interest expense: 1,033 + Income tax expense: 8,088 + Other adjustments: -2,773 = Cash flow before working capital: 33,609? That seems too high. Wait, let me recalculate: 17,510 + 7,205 = 24,715 24,715 + 1,140 = 25,855 25,855 + 599 = 26,454 26,454 + 1,841 = 28,295 28,295 - 524 = 27,771 27,771 - 351 = 27,420 27,420 - 159 = 27,261 27,261 + 1,033 = 28,294 28,294 + 8,088 = 36,382 36,382 - 2,773 = 33,609 Then working capital: +1,279 = 34,888 Then dividends received: +1,545 = 36,433 Interest received: +116 = 36,549 Interest paid: -851 = 35,698 Taxes paid: -8,488 = 27,210 But Cash Flows From Used In Operating Activities is 17,460. Something is wrong. Wait, I think I misread the signs. Let me check "Adjustments For Losses Gains On Disposal Of Noncurrent Assets" = -524,000,000 EUR. Negative means... gain? So we subtract gain. Actually, I think the issue is that "Profit Loss From Operating Activities" might already include some items, and my calculation is wrong. Let me re-read: "Adjustments For Undistributed Profits Of Investments Accounted For Using Equity Method" = 1,841,000,000 EUR. This is positive, meaning we add back? But this is profit, not a deduction. Actually, I think "Profit Loss From Operating Activities" might be before equity-accounted investments. Let me check the P&L structure again. Looking at the P&L items: - Profit Loss From Operating Activities: 17,510 - Finance Income Cost: -925 - Investment Income Expense: 5,464 - Profit Loss Before Tax: 22,049 So 17,510 (Operating) + Investment Income 5,464 + Finance Cost (-925) = 22,049? 17,510 + 5,464 = 22,974; 22,974 - 925 = 22,049. Yes! So "Investment Income Expense" of 5,464 includes: - Share Of Profit Loss Of Equity Accounted Investments: 1,841 - Other Income Expense From Investments: 3,623 This "Investment Income Expense" is added to operating profit to get pre-tax profit. So the operating profit of 17,510 is before investment income and finance costs. This is typical "EBIT" excluding associates. Now, for EBITDA, should I add back items to 17,510? The cash flow adds back D&A, impairments, etc. to 17,510. This means 17,510 is after D&A and impairments. So EBITDA = 17,510 + 7,205 + 1,140 + 599 = 26,454 But wait - my cash flow reconciliation didn't work. Let me check if "Other Adjustments To Reconcile Profit Loss" of -2,773 includes something. Actually, I realize I need to check: is "Profit Loss From Operating Activities" the same as the starting point for cash flow? Yes, both are 17,510. Let me recheck the cash flow math with correct signs. The issue might be in how I read the working capital and other items. Actually, looking more carefully at "Increase Decrease In Working Capital" = 1,279,000,000 EUR. If this is positive, and in the cash flow it increases operating cash flow, then: Cash flow before working capital changes (from indirect method): = 17,460 (total operating CF) - 1,279 (working capital) - 1,545 (dividends) - 116 (interest received) + 851 (interest paid) + 8,488 (taxes) Wait, that's messy. Let me use the other direction. Actually, I think I made an error. Let me re-read: "Cash Flows From Used In Operating Activities" 2022-01-01 - 2023-01-01: 17460000000 EUR. This is positive, meaning cash generated. And "Increase Decrease In Working Capital" = 1,279,000,000 EUR. In standard cash flow presentation: Cash from operations = Net income + adjustments + working capital changes + other operating items If working capital is positive 1,279, this typically means decrease in working capital (cash inflow). But let me not get bogged down. My EBITDA calculation of 26,454 should be correct based on adding back non-cash items to operating profit. Actually, let me verify by another means. Looking at "Total Purchases Services And Other Costs" = 102,529. This includes cash and non-cash costs. EBITDA can also be approximated as: Revenue - Cash operating costs + D&A (since D&A is in costs) But "Total Purchases Services And Other Costs" likely includes D&A? No, typically D&A is separate. Actually in the P&L, D&A is shown separately as 7,205, so "Total Purchases Services And Other Costs" of 102,529 is likely before D&A. Let me try: Gross margin approach Revenue and Other Income: 133,687 Total Purchases etc: 102,529 Gross-like difference: 31,158 Employee benefits: 3,015 Other Operating Income Expense: -1,736 (expense) = 31,158 - 3,015 - 1,736 = 26,407 Then D&A 7,205, Impairment 1,140, Write-offs 599 = 8,944 26,407 - 8,944 = 17,463... not 17,510. Close but not exact. Actually, I think "Other Operating Income Expense" might be income, not expense. Let me try: 31,158 - 3,015 + 1,736 = 29,879 29,879 - 7,205 - 1,140 - 599 = 20,935... not right either. Or maybe "Other Operating Income Expense" of -1,736 means it's negative expense = income? No, that would be double negative. Let me try: 31,158 - 3,015 + (-1,736) if -1,736 is already the net amount: If -1,736 means "expense of 1,736" then 31,158 - 3,015 - 1,736 = 26,407 But we need 17,510 + 7,205 + 1,140 + 599 = 26,454 for EBITDA, or 17,510 for EBIT. 26,407 vs 26,454... difference of 47. Could be rounding in the reported numbers. Actually, let me check: 133,687 - 102,529 = 31,158 exactly? 132,512 + 1,175 = 133,687. Yes. 102,529. Yes. 31,158 - 3,015 = 28,143 28,143 + (-1,736) = 26,407 if we treat -1,736 as subtraction... but wait. Actually, I think the issue is "Other Operating Income Expense" is presented as a net figure. If it's -1,736, this means "Other Operating Expense net of Income" = 1,736 expense, or "Other Operating Income net of Expense" = -1,736 i.e., net expense. In either case, 28,143 - 1,736 = 26,407 or 28,143 + (-1,736) = 26,407. Then 26,407 - 7,205 = 19,202 19,202 - 1,140 = 18,062 18,062 - 599 = 17,463 Still not 17,510. Difference is 47. Maybe there's rounding, or maybe I'm missing something. The numbers are in millions, so 47 million is small (0.3% difference). Could be due to rounding of individual items. Let me just proceed with EBITDA = 26,454 based on the explicit add-back method, which is more reliable. Actually, I want to double-check: is "Write Off Of Tangible And Intangible Assets" part of operating activities or financing? It's in the P&L before operating profit, so yes. And for S&P EBITDA, do they include impairments and write-offs? Yes, these are added back as they're non-cash. So EBITDA = 17,510 + 7,205 + 1,140 + 599 = 26,454 million EUR. Net Debt = 21,713 million EUR. Ratio = 21,713 / 26,454 = 0.8208... Let me calculate more carefully: 21,713 ÷ 26,454 = ? 26,454 × 0.82 = 21,692.28 Remainder: 20.72 20.72 / 26,454 = 0.000783 So 0.8208, or approximately 0.82x, or 82.1%. Actually, let me recheck Net Debt. I want to make sure about lease liabilities. Under S&P methodology, post-IFRS 16, lease liabilities are typically included in debt. So my calculation should be correct. But let me also consider: should I include "Related Parties Member" amounts separately? No, the total amounts already include related parties. For example, "Shortterm Borrowings" 2023-01-01: 4446000000 EUR is the total, and "Shortterm Borrowings" "Related Parties Member" 2023-01-01: 307000000 EUR is the portion from related parties. The total is already 4,446. So my debt calculation is correct. Final calculation: Net Debt = 4,446 + 3,097 + 19,374 + 884 + 4,067 - 10,155 = 21,713 EBITDA = 17,510 + 7,205 + 1,140 + 599 = 26,454 Net Debt / EBITDA = 21,713 / 26,454 = 0.8208... Rounding to two decimal places: 0.82 Or should I present as 0.821? Let me calculate more precisely. 21,713 / 26,454 = 21713 / 26454 Let me do long division: 21713 / 26454 = 0.820782... So 0.821 when rounded to three decimal places, or 0.82 to two. For financial ratios, typically 2-3 decimal places are used. I'll provide 0.82 or more precisely 0.821. Actually, let me reconsider if I should include "Current Financial Assets At Fair Value Through Profit Or Loss" as part of "cash-like" items. These are 8,251 million. If these are very liquid (e.g., short-term investments, marketable securities), S&P might include them in the deduction. However, "Current Financial Assets At Fair Value Through Profit Or Loss" often includes trading assets, derivatives, and other items that may not be readily convertible to cash. Without more detail, I'll be conservative and not include them. But let me check: "Other Current Financial Assets" 2023-01-01: 1,504 million. These might be more cash-like. Actually, looking at typical S&P practice, they deduct "cash and cash equivalents" and "readily marketable securities". The 8,251 in FVTPL assets could include some of these. If I were to include all current financial assets as liquid: Cash + Current FVTPL + Other Current Financial Assets = 10,155 + 8,251 + 1,504 = 19,910 Net Debt = 31,868 - 19,910 = 11,958 Ratio = 11,958 / 26,454 = 0.452 This seems too low and probably incorrect as these assets likely include receivables and other non-liquid items. Actually, looking more carefully: "Current Financial Assets At Fair Value Through Profit Or Loss" - this typically includes things like short-term investments held for trading. But it could also include derivative assets used for hedging. "Other Current Financial Assets" might include things like loans to related parties, deposits, etc. I'll stick with just Cash and Cash Equivalents as the deduction, which is the most standard approach. Wait, I want to double-check one thing. Is "Cash And Cash Equivalents" at 2023-01-01 = 10,155,000,000 the right number for year-end 2022? The data says: "Cash And Cash Equivalents" 2023-01-01: 10155000000 EUR And for the prior year: "Cash And Cash Equivalents" 2022-01-01: 8254000000 EUR The period 2022-01-01 to 2023-01-01 is fiscal year 2022. So 2023-01-01 is year-end 2022. Yes, correct. Also, I want to verify: the EBITDA period 2022-01-01 to 2023-01-01 matches this. Yes. One more check: should I use average net debt or year-end net debt? S&P typically uses year-end net debt for leverage ratios, though some use average. The standard Net Debt/EBITDA uses year-end net debt. Actually, I want to make absolutely sure about EBITDA. Let me see if there's another way to calculate it. From the cash flow statement, the indirect method starts with profit and adds back non-cash items. The subtotal before working capital changes should equal EBITDA plus/minus some items. Let me calculate cash flow before working capital and other items: From my earlier calculation, starting from 17,510 and adding back all non-cash and non-operating items in the reconciliation: Actually, the cash flow reconciliation items are: - D&A: +7,205 (non-cash, add back) - Impairment: +1,140 (non-cash, add back) - Write-offs: +599 (non-cash, add back) - Undistributed profits of equity investments: +1,841 (this is equity-accounted earnings not received as cash, but it's not in EBITDA) - Gains on disposal: -524 (gain, subtract as it's non-operating or non-cash) - Dividend income: -351 (financing/investing, not operating) - Interest income: -159 (financing, not operating) - Interest expense: +1,033 (financing, add back) - Income tax expense: +8,088 (tax, add back) - Other adjustments: -2,773 (various) If I want EBITDA, I should add back to EBIT: - D&A: +7,205 - Impairment: +1,140 (if not already in EBIT... but it is) Wait, I need to be clearer. "Profit Loss From Operating Activities" of 17,510 is the starting point. This is EBIT excluding investments and financing. To get to a cash-like measure before working capital: 17,510 + 7,205 + 1,140 + 599 = 26,454 (this is EBITDA-like, but still includes some accruals) Then +1,841 (equity accounted) -524 (gains) -351 (dividends) -159 (interest income) +1,033 (interest expense) +8,088 (taxes) -2,773 (other) = 33,609 This 33,609 is not a standard measure. It's some kind of adjusted cash earnings. Then working capital +1,279 = 34,888 Then -1,545 (dividends received, investing) -116 (interest received, investing or operating?) +851 (interest paid, financing or operating?) -8,488 (taxes paid, operating) = 17,460 (final operating CF) Hmm, the classification of interest and dividends is confusing. In IFRS, interest and dividends can be classified as operating, investing, or financing depending on policy. Looking at the data: "Dividends Received Classified As Operating Activities" = 1,545 "Interest Received Classified As Operating Activities" = 116 "Interest Paid Classified As Operating Activities" = 851 "Income Taxes Paid Refund Classified As Operating Activities" = 8,488 So in this company's cash flow, these are all operating activities. This means the subtotal before these items is: 17,460 + 1,545 + 116 - 851 + 8,488 = 26,758? No wait, let me think. Actually, operating cash flow of 17,460 INCLUDES: + Dividends received 1,545 + Interest received 116 - Interest paid 851 - Taxes paid 8,488 So before these items: 17,460 - 1,545 - 116 + 851 + 8,488 = 25,238? That doesn't seem right either. Let me try: Cash from operations before these items = 17,460 - 1,545 - 116 + 851 + 8,488 = 25,238? No, if 17,460 already includes -1,545 (i.e., we received +1,545), then to remove it: 17,460 - 1,545 = 15,915. Actually, if dividends received are +1,545 in the cash flow (positive means inflow), then: CF before dividends = 17,460 - 1,545 = 15,915 CF before interest received = 15,915 - 116 = 15,799 CF before interest paid = 15,799 + 851 = 16,650 (interest paid is outflow, so to remove it, add back) CF before taxes = 16,650 + 8,488 = 25,138 This 25,138 should be cash from operations before working capital, dividends, interest, and taxes. It should equal: EBITDA + other adjustments - working capital changes Wait, we also had working capital of +1,279. So before working capital: 25,138 - 1,279 = 23,859? Or +1,279 depending on sign. Actually, let me check: if working capital is +1,279 and it's an inflow, then: Cash before working capital = 25,138 + 1,279 = 26,417? Hmm, 26,417 is close to my EBITDA of 26,454! Difference is 37, likely rounding. This confirms my EBITDA calculation is approximately correct! The small difference (37 vs 47 before) is due to rounding in the reported numbers. So EBITDA ≈ 26,454 million EUR. Net Debt / EBITDA = 21,713 / 26,454 = 0.821 Let me do a final precise calculation: 21713 / 26454 = ? 26454 goes into 21713 zero times. 26454 goes into 217130 about 8 times (26454 × 8 = 211632) 217130 - 211632 = 5498 54980 / 26454 = 2 times (52908) 54980 - 52908 = 2072 20720 / 26454 = 0 times 207200 / 26454 = 7 times (185178) 207200 - 185178 = 22022 220220 / 26454 = 8 times (211632) 220220 - 211632 = 8588... So 0.82078... ≈ 0.821 I'll round to 0.82 or provide 0.821. For financial ratios, two decimal places is typical, so 0.82. Actually, let me see if I should express this differently. Sometimes Net Debt/EBITDA is expressed as a multiple, like "0.82x" or just "0.82". Given the instructions say "no units", I'll provide just the number. Let me also consider: should I use trailing twelve months EBITDA or is the fiscal year 2022 correct? The data gives 2022-01-01 to 2023-01-01 which is fiscal year 2022. This is correct. One final verification: let me make sure about the debt figures. At 2023-01-01: - Short-term borrowings: 4,446 - Current portion of long-term borrowings: 3,097 - Long-term borrowings: 19,374 - Current lease liabilities: 884 - Noncurrent lease liabilities: 4,067 Total: 4,446 + 3,097 + 19,374 + 884 + 4,067 = 31,868 Cash: 10,155 Net debt: 21,713 Yes. I should also check if there are any "liabilities included in disposal groups classified as held for sale" that include debt. At 2023-01-01, this is 108 million. But this is already classified separately and likely not in the current/noncurrent liabilities totals. Actually, looking at the balance sheet: "Current Liabilities Other Than Liabilities Included In Disposal Groups Classified As Held For Sale" = 48,717 "Noncurrent Liabilities" = 48,075 "Liabilities Included In Disposal Groups Classified As Held For Sale" = 108 Total Liabilities = 48,717 + 48,075 + 108 = 96,900. Yes, matches. The debt items I used are from current and noncurrent liabilities, so they exclude the held-for-sale liabilities. This is correct for a going concern basis. My final answer: Net Debt / EBITDA = 21,713 / 26,454 = 0.82 (rounded) Or more precisely: 0.821 I'll provide 0.82 as a reasonable rounded figure, or should I provide more precision? Let me check if 0.821 is better. Actually, looking at typical financial reporting, this ratio is often given to one or two decimal places. I'll provide 0.82. Wait, I want to double-check one thing. Should "Current Portion Of Longterm Borrowings" be included in debt? Yes, absolutely. And "Shortterm Borrowings" - yes. Is there any "bank overdraft" or similar in other items? I don't see any obvious ones. Also, I should verify: are the lease liabilities included in "borrowings" or separate? In IFRS 16, lease liabilities are separate from borrowings. My treatment is correct. Final answer: 0.82 Actually, let me also consider if S&P would adjust EBITDA for non-recurring items. The large impairment of 1,140 and write-offs of 599 might be considered non-recurring. However, in the oil & gas industry, impairments and write-offs are often recurring due to asset retirement, field abandonment, etc. S&P typically does not adjust these out unless they're clearly one-time. Also, the "Other Operating Income Expense" of -1,736 (expense) might include non-recurring items. But without detail, I won't adjust. My final answer remains 0.82. Let me do one more precise calculation to make sure: 21713 / 26454 = 0.820782... Rounded to two decimal places: 0.82 Rounded to three decimal places: 0.821 I'll provide 0.82 as it's standard for this ratio. 0.82