Netflix Financial Statements and Financial Ratios

Netflix Financial Statements and Financial Ratios Analyzed

Hey All,

Thanks for visiting my Netflix Financial Report page. On this page, you will be able to find preliminary information about Netflix's current financial performance as well as some historical track records and trends. 

For a more detailed examination of Netflix financial performance, I offer two reports, which are "A Beginner's Guide to Netflix Financial Analysis" and "Netflix Financial Report by Paul Borosky, MBA."  Both reports are written by myself, Paul Borosky, MBA., Doctoral Candidate, and published author, and include:

  • Summarized income statements for the last 5 years.
  • Summarized balance sheets for the last 5 years.
  • Five years’ worth of over twenty common financial ratios presented with formulas, calculations, and analysis tips for each ratio.
  • Line by line description, explanation, and analysis tip for most financial statement line items and financial ratios.
  • Professional financial analysis tips are provided in each section to help YOU conduct your OWN financial analysis!
  • Each section includes an “in other words” segment.  This is where I use plain English to explain concepts.

 

For a MORE in-depth review of the company's financial statements and ratios, make sure to buy my "Netflix Financial Report".  The financial report includes all aspects of my "Beginner's Guide" plus a whole lot more...

  • Professional financial analysis of important income statements, balance sheets, and financial ratio trends.
  • "Letter Grade" is assigned to most financial statement line items and financial ratios to help you better understand their overall trends for the last 5 years.
  • Overall financial analysis summary for the company.

Enjoy the preliminary information and for a more detailed analysis, buy the financial report!

Sincerely,

Paul, MBA.

PDF/Downloadable Versions

Beginner's Guide to Netflix 2021 Financial Analysis

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Netflix 2021 Financial Report by Paul Borosky, MBA.

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Sample Financial Report

Sample Financial Report by Paul Borosky, MBA.
Financial Report Sample 2

Netflix: Brief Summary

Netflix headquarters is located in Los Gatos, CA.  The company competes in the communications services sector—specifically, the entertainment industry.  At present, the organization employs approximately 9,400 individuals. Netflix’s main revenue generator is the sale of monthly subscriptions to its movie streaming services.  A secondary revenue generator for the firm is the rental of DVDs.

From a financial perspective, Netflix’s market capitalization is about $242 billion as of August 2021.  Their beta is .75.  This indicates that the company’s stock is slightly less risky as compared to the overall market.  Their stock price range for the last 52 weeks has been between $458.60 to $593.29.  In the last year, the company has not paid out dividends.  This indicates that the firm is still in an expansionary business cycle.

Netflix Financial Report Sources

“Netflix 2020 Company Analysis: 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's 2020 10k, 2017 10k annual report, 2016 10k annual report, 2018 10k annual report, and Netflix's 2019 10k annual report as the basis for information gathering. 

 

 

Section 1: Netflix Income Statement Analyzed

In this section, I walk through a broad definition of what an income statement is and why it is important.  From this, I then discuss and define income statement line items, such as revenues, gross profits, etc., in detail.  After each line item is defined and discussed, I finally offer a summary analysis of Netflix's important income statement line item trends from 2016 to 2020, in most cases.

Netflix Revenue Growth:

Netflix’s average revenue growth rate over the last five years was approximately 26.4% annually.  However, the firm’s growth rate has been continually declining over this five-year period.  Specifically, in 2018, the organization’s revenue growth was 35.1%.  As of 2021, the firm’s revenue growth was 18.8% from the previous year.  This decline indicates that the organization may be entering a more mature phase of its business cycle.  From this, continued revenue declines should be expected.  From an investor’s perspective, this is a below-average trend.

Analyst Grade: B

Netflix 2021 Summary Income Statement

Column1

2021

2020 2019 2018

2017

Revenues

            29,697,844

            24,996,056             20,156,447             15,794,341

              11,692,713

COGS

            17,332,683

            15,276,319             12,440,213               9,967,538

                7,659,666

Gross Profit

            12,365,161

              9,719,737               7,716,234               5,826,803

                4,033,047

 
SG&A

              1,351,621

              1,076,486                  914,369                  630,294

                   431,043

Depreciation

                 208,412

                 115,710                  103,579                    83,157

                     71,911

R & D

              2,273,885

              1,829,600               1,545,149               1,221,814

                   953,710

Other                            -                            -                            -                            -                             -
Total Operating Expenses

              3,833,918

              3,021,796               2,563,097               1,935,265

                1,456,664

EBIT

              6,194,509

              4,585,289               2,604,254               1,605,226

                   838,679

Other Income                            -                            -                            -                            -                             -
Interest Expense

                 765,620

                 767,499                  626,023                  420,493

                   238,204

EBT

              5,840,103

              3,199,349               2,062,231               1,226,458

                   485,321

Taxes

                 723,875

                 437,954                  195,315                    15,216

                   (73,608)

Net Income

            5,116,228

            2,761,395             1,866,916             1,211,242

                 558,929

 

 

Section 2: Netflix Balance Sheet Analyzed

For Netflix's balance sheet, I again go through each important line item from the balance sheet.  In reviewing each line item, I will define Netflix's balance sheet line item, such as cash, property, plant and equipment, and liabilities between 2016 to 2020.  Next, I then offer a summary analysis of Netflix’s important balance sheet line items.

Netflix Cash.

Netflix’s cash position was $2.8 billion in 2017.  Over the next four years, the organization’s cash position would increase substantially, ending 2021 at $6 billion.  As compared to sales, the organization’s cash percentage was 24.1% in 2017.  In 2021, the cash, as compared to the sales, dropped to 20.3%.  This shows that the firm is holding less cash on hand as compared to the sales over this time span.  From an investor’s perspective, this is actually a good trend.  This shows that the company is not sitting idle on access cash.

Analyst Grade: A

Netflix 2021 Summary Balance Sheet

Column1

2021

2020 2019 2018

2017

Cash

                6,027,804

            8,205,550             5,018,437             3,794,483

            2,822,795

Short Term Investment                              -                         -                         -                         -                         -
Account Receivable                              -                         -                         -                         -                         -
Inventory                              -                         -                         -                         -                         -
Other                              -                         -                         -                         -                         -
Current Assets

              8,069,825

         9,761,580          6,178,504          9,694,135

         7,669,974

Net PPE

                1,323,453

               960,183                565,221                418,291

               319,404

Goodwill                              -                         -                         -                         -                         -
Other                              -                         -                         -                         -                         -
Total Assets

           44,584,663

       39,280,359        33,975,712        25,974,400

       19,012,742

Accounts Payable

                   837,483

               656,183                674,347                562,985

               359,555

Accrued Expense

                1,449,351

            1,102,196                843,043                477,417

               315,094

Accrued Taxes                         -                         -                         -                         -
Notes Payable

                   699,823

               499,878                         -                         -

                        -

LT Debt - Current                              -                         -                         -                         -                         -
Other                              -                         -                         -                         -                         -
Total Current Liabilities

                8,488,966

            7,805,785             6,855,696             6,487,320

            7,669,974

LT Debt

              14,693,072

          15,809,095           14,759,260           10,360,058

            6,499,432

Other                              -                         -                         -                         -                         -
Total Liabilities

           28,735,415

       28,215,119        26,393,555        20,735,635

       15,430,786

Common Stock

                4,024,561

            3,447,698             2,793,929             2,315,988

            1,871,396

Treasury

                   824,190

                        -                         -                         -

                        -

Retained Earnings

              12,689,372

            7,473,144             4,811,749             2,942,359

            1,731,117

Other                              -                         -                         -                         -                         -
Total Equity

           15,849,248

       11,065,240          7,582,157          5,238,765

         3,581,956

 

Section 3: Netflix Financial Ratios Analyzed

For this section, I have chosen several different financial ratios to review for Netflix from 2016 to 2020.  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’s Important Financial ratios. 

Netflix Current Ratio

Netflix’s current ratio was 1.0 in 2017.  In the next several years, the organization’s current ratio would fall slightly to .95.  The reduction in the current ratio, especially since the organization generates cash continuously, should be well received by investors.  This shows that the firm is able to cover its current liabilities with less cash and other current assets on hand.

Analyst Grade: A

Netflix Total Asset Turnover

Netflix’s total asset turnover was .61 in 2017.  Over the next several years, the firm’s total asset turnover would increase slightly to .67.  This trend indicates that the firm is doing a slightly better job in using assets under management to generate revenues.  However, because of the slow growth in this area, investors should be wary when the organization increases its property, plant, and equipment category at a faster pace as compared to sales.  From an investor’s perspective, this trend is above average.

Analyst Grade: B