# Net Debt / EBITDA Ratio Estimation (S&P Methodology)

## Step 1: Determine EBITDA

S&P typically uses adjusted EBITDA. From the data, I can see:

**Operating Profit Before Depreciations (EBITDA):** €1,842M (2022)

However, S&P methodology typically starts with comparable/recurring EBITDA rather than reported EBITDA that includes items affecting comparability. The "Comparable EBITDA" is given as €2,436M.

But S&P's EBITDA calculation typically starts from reported figures and makes their own adjustments. Let me work through this:

- Revenue: €8,804M
- Other Income: €101M
- Materials and Services: -€5,350M
- Employee Benefits: -€504M
- Other Expenses: -€615M
- **EBITDA (reported):** €1,842M (which matches the given figure, before D&A of €566M and after items affecting comparability of -€593M)

Wait - the reported EBITDA includes items affecting comparability. S&P would typically exclude non-recurring items. The comparable EBITDA of €2,436M excludes the -€593M items affecting comparability.

For S&P, I'll use the **Comparable EBITDA of €2,436M** as it better reflects recurring earnings, though S&P might make further adjustments.

## Step 2: Determine Net Debt

S&P Net Debt = Total Financial Debt - Cash and Cash Equivalents

**Financial Debt (as of Jan 1, 2023 = end of 2022):**
- Other Noncurrent Financial Liabilities: €3,658M
- Other Current Financial Liabilities: €4,127M
- Total Financial Debt: €7,785M

**Cash and Liquid Funds:** €3,919M

However, S&P typically does not give full credit for all cash. They might also consider operating leases and other adjustments. But with the data available:

**Net Debt = €7,785M - €3,919M = €3,866M**

S&P might also consider margin-related items. Margin receivables (€2,607M) and margin liabilities (€352M) are related to derivatives/trading and might be netted or excluded. For a cleaner calculation focusing on core financial debt:

Net Debt = €3,866M

## Step 3: Calculate Ratio

**Net Debt / EBITDA = €3,866M / €2,436M = 1.587**

However, if using reported EBITDA:
**Net Debt / EBITDA = €3,866M / €1,842M = 2.099**

S&P would likely use something closer to the comparable EBITDA but might also include some adjustments. Given that S&P focuses on recurring/adjusted metrics and the items affecting comparability include impairments (€905M) and fair value changes, the comparable EBITDA of €2,436M is more appropriate.

**Net Debt / EBITDA ≈ 1.6**

<answer>1.6</answer>