Netflix Financial Statements and Financial Ratios Analyzed from 2015 to 2019

 “Netflix 2019 Company Analysis… For Beginners: Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by, Paul Borosky, MBA. and owner of Quality Business Plan.  In this book, the author selected Netflix, 2019 10k, 2018 10k, 2017 10k annual report, 2016 10k annual report, and 2015 10k annual report as the basis for information gathering. 

Netflix: Brief Summary

Netflix ticker symbol is NFLX. Netflix headquarters is located at 100 Winchester Circle in Los Gatos, CA.  The firm competes in the communication services industry.  At present, they employ about 7,100 people.

Section 1: Netflix Income Statement Analyzed 2015 to 2019

In this section, I walk through a broad definition as to what an income statement is and why it is important.  From this, I then discuss each of Netflix's important income statement line items, such as revenues, gross profits, etc. in detail.  After each line item is defined and discussed, I then offer an analysis of Netflix income statement line item from 2015 to 2019, in most cases.

Netflix Income Statement 2019

Column1 2019 2018 2017 2016 2015
Revenues             15,794,341             11,692,713               8,830,669                 6,779,511
COGS               2,369,469               1,436,281               1,097,519                 4,591,476
Gross Profit                            -             13,424,872             10,256,432               7,733,150                 2,188,035
SG&A                  630,294                  431,043                  315,663                    407,329
Depreciation                            -                            -                            -                             -
R & D               1,221,814                  953,710                  780,232                    650,788
Other                            -                            -                            -
Operating Expenses                            -               1,852,108               1,384,753               1,095,895                 1,058,117
EBIT               1,605,226                  838,679                  379,793                    305,826
Other Income                            -                            -                            -
Interest Expense                  420,493                  238,204                  150,114                    132,716
EBT               1,226,458                  485,321                  260,507                    141,885
Taxes                    15,216                   (73,608)                    73,829                    141,885
Net Income             1,211,242                558,929                186,678                  122,641

Section 2: Netflix Balance Sheet Analyzed from 2015 to 2019

For Netflix balance sheet, I again go through each important line item from the balance sheet.  In reviewing each line item, I will define the Netflix balance sheet line item, such as cash, property, plant and equipment, and liabilities between 2015 to 2019.  Next, I then offer an analysis of Netflix balance sheet line item.

Netflix Summary Balance Sheet 2019

Column1 2019 2018 2017 2016 2015
Cash             3,794,483             2,822,795             1,467,576             1,809,330
Short Term Investment                         -                         -                266,206                501,385
Account Receivable                         -                         -                         -                         -
Inventory                         -                         -                         -                         -
Other                         -                         -                         -                         -
Current Assets          9,694,135          7,669,974          5,720,291          5,431,840
Net PPE                418,291                319,404                250,395                173,412
Goodwill                         -                         -                         -                         -
Other                         -                         -                         -                         -
Total Assets        25,974,400        19,012,742        13,586,610        10,202,871
Accounts Payable                562,985                359,555                312,842                253,491
Accrued Expense                477,417                315,094                197,632                140,389
Accrued Taxes                         -                         -                         -                         -
Notes Payable                         -                         -                         -                         -
LT Debt - Current                         -                         -                         -                         -
Other                         -                         -                         -                         -
Total Current Liabilities             6,487,320             7,669,974             5,720,291             3,529,624
LT Debt           10,360,058             6,499,432             3,364,311             2,371,362
Other                         -                         -                         -                         -
Total Liabilities        20,735,635        15,430,786        10,906,810          7,979,445
Common Stock             2,315,988             1,871,396             1,599,762             1,324,809
Treasury                         -                         -                         -                         -
Retained Earnings             2,942,359             1,731,117             1,128,603                941,925
Other                         -                         -                         -                         -
Total Equity          5,238,765          3,581,956          2,679,800          2,223,426
Total Equity & Liability                              -        25,974,400        19,012,742        13,586,610        10,202,871

Section 3: Netflix Financial Ratios Analyzed from 2015 to 2019

For this section, I have chosen about 16 different financial ratios to review for Netflix Inc from 2015 to 2019.  In reviewing each of Netflix's financial ratios, I first start with defining the financial ratio.  Next, I supply the financial formula for calculating the specific ratio.  Finally, I offer a brief analysis of Netflix Financial ratios.  Ratios calculated and analyzed for the last five years include:

  • the current ratio for 2015 to 2019
  • quick ratio for 2015 to 2019
  • cash ratio for 2015 to 2019
  • total asset turnover for 2015 to 2019
  • fixed asset turnover for 2015 to 2019
  • Days Sales Outstanding for 2015 to 2019
  • Inventory Turnover for 2015 to 2019
  • Accounts Receivable Turnover for 2015 to 2019
  • accounts payable turnover for 2015 to 2019
  • return on assets (ROA) for 2015 to 2019
  • return on equity (ROE) for 2015 to 2019
  • profit margin for 2015 to 2019
  • gross profit margin for 2015 to 2019
  • operating profit margin for 2015 to 2019
  • long-term debt ratio for 2015 to 2019
  • debt to equity ratio for 2015 to 2019
  • times interest earned for 2015 to 2019

Netflix Liquidity Ratios

Ratios 2019 2018 2017 2016 2015
Current Ratio #DIV/0!                    1.49                    1.00                    1.00                    1.54
Cash Ratio #DIV/0!                    0.58                    0.37                    0.26                    0.51
Quick Ratio #DIV/0!                    1.49                    1.00                    1.00                    1.54
Net Working Capital                              -           2,754,081           2,148,146              957,102           1,415,450

Netflix Asset Utilization

Ratios 2019 2018 2017 2016 2015
Total Asset Turnover #DIV/0!                    0.61                    0.61                    0.65                    0.66
Fixed Asset Turnover #DIV/0!                  37.76                  36.61                  35.27                  39.09
Days Sales Outstanding #DIV/0!                        -                        -                        -                        -
Inventory Turnover #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Accounts Receivable Turnover #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Working Capital Turnover #DIV/0!                    5.73                    5.44                    9.23                    4.79
AP Turnover #DIV/0!                  28.05                  32.52                  28.23                  26.74
Average Days Inventory #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Average Days Payable #DIV/0!                    0.08                    0.09                    0.08                    0.07

Netflix Profitability Ratios

Ratios 2019 2018 2017 2016 2015
Return on Assets #DIV/0! 4.66% 2.94% 1.37% 1.20%
Return on Equity #DIV/0! 23.12% 15.60% 6.97% 5.52%
Net Profit Margin #DIV/0! 7.67% 4.78% 2.11% 1.81%
Gross Profit Margin #DIV/0! 85.00% 87.72% 87.57% 32.27%
Operating Profit Margin #DIV/0! 10.16% 7.17% 4.30% 4.51%
Basic Earning Power #DIV/0! 6.18% 4.41% 2.80% 3.00%
ROCE #DIV/0! 8.24% 7.39% 4.83% 4.58%
Capital Employed                              -         19,487,080         11,342,768           7,866,319           6,673,247
ROIC #DIV/0! 49.97% 39.14% 22.54% 0.00%

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