in PLN millions, unless otherwise stated
In accordance with market practice, the Group monitors the level of financial security, among others on the basis of the Net Debt/EBITDA ratio presented in the table below:
| Ratios | Calculations | 31 December 2020 | 31 December 2019 |
|---|---|---|---|
| Net Debt/EBITDA | relation of net debt to EBITDA | 0.9 | 1.5 |
| Net Debt* | borrowings, debt securities and lease liabilities less free cash and its equivalents | 4 834 | 6 891 |
| Adjusted EBITDA** | profit on sales plus depreciation/amortisation recognised in profit or loss and impairment losses on non-current assets | 5 277 | 4 569 |
In the management of liquidity and capital, the Group also pays attention to adjusted operating profit, which is the basis for calculating the financial covenant and which is comprised of the following items:
| from 1 January 2020 to 31 December 2020 |
from 1 January 2019 to 31 December 2019 |
|
|---|---|---|
| Profit on sales | 3 161 | 2 455 |
| Interest income on loans granted to a joint venture | 377 | 341 |
| Other operating income and (costs) | (624) | 186 |
| Adjusted operating profit* | 2 914 | 2 982 |
As at the end of the reporting period, in the financial period and after the end of the reporting period, up to the date of publication of these consolidated financial statements, the value of the financial covenant subject to the obligation to report as at 30 June 2020 and 31 December 2020, met the conditions stipulated in the credit agreements.
In order to maintain financial liquidity and the creditworthiness enabling the obtainment of external financing with the optimum level of costs, the Group’s long term aim for the level of the Net Debt/EBITDA ratio is to be not more than 2.0.