Financial Analysis: Netflix Financial Statement Analysis

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Netflix Financial Statement Analysis

The online video streaming media has been in demand. But the most popular and shown to be on top of its competitors is Netflix. The company’s financial statement will be explained on how much of their success has increased in the past few years. Every company would like to expand their business and aim to be the best and the most successful they can be. But, being successful also includes taking risks. For example, taking a loan from a creditor. If a company is credit worthy, a company will be approved for a loan. That’s not all. A creditor also looks at their savings, investments and assets that can be used to repay them. This is first financial statement I will be explaining. An acceptable current
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This reveals how much the company is worth. The shareholder’s equity is pretty much what is left of the assets after the liabilities. The company’s total liabilities are much higher than its equity, which gives a high debt-to-equity ratio of 3.06 in 2013. And in 2014, their debt to equity ratio decreased, but it’s still higher than one. This indicates that, if the company needed to repay their debt right away, the company would struggle to pay it off since their liabilities are more than the equity. However, its competitor also has a high debt-to-equity ratio. Amazon had a total liability of $43,764,000 and an equity of $10,741,000 with a debt-to-equity ratio of 4.07. So, in comparison to their competitor, it’s still looking a bit …show more content…
Without people subscribing, Netflix won’t continue to be successful with online streaming video. Based on Yahoo Finance, Netflix has 57 million customers in approximately 50 countries. On their Income Statement, it shows that in 2013, they have a net income of $112,403 and total cost of revenue is $4,374,562 with a 2.57% profit margin. The year after, it showed that their net income had increased to $266,799 and revenues of $5,504,656 and a profit margin of 4.85%. This clearly shows how profitable their company has increased within a year. Normally, to calculate the basic EPS, the preferred dividends are subtracted from Net Income and divided that by the shares outstanding. But, our company doesn’t have any dividends, which I will explain later on. When looking at a company’s stock, all their financial statement are given or shown to let investors know about the company before investing. It shows that the basic earnings per share have increased over the years. In 2013, the basic earnings per share were 1.93 and increased to 4.44 the year

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