THE YENEPOYA INSTITUTE OF ARTS SCIENCE COMMERCE AND

MANAGEMENT
BALMATTA MANGALORE
 CHAPTER -1

INTRODUCTION ABOUT THE ORGANISATION AND INDUSTRY

OTT (OVER THE TOP) INDUSTRY

For some of us, streaming has always been a part of our lives. Others lived through the birth of the
internet, and still others will remember a time when there were only a handful of TV networks and not
even cable television. No matter how you experienced the growth of over-the-top (OTT) streaming, all of us
are squarely in the middle of the OTT revolution.

Over the last few years there has been a new global trending of media consumption which increased during
pandemic when people were confined at home, they literally needed some kind of entertainment which
would help them in times of boredom. At the safety of their home. Due to the national lockdown, people
were restricted to their homes and didn't have much options for entertainment. Film theatres were closed.
Entertainment programs on Television were not that interesting for the educated middle class. So, they
began to watch programs on OTT platforms like Netflix and Amazon Prime.

The use of Digital technologies across the globe has changed the way media is consumed. Increase in
number of internet connections, better connections, new technological innovations and availability of smart
devices have resulted in the rise of new OTT media that offers services to viewers directly via the internet.
With the estimated growth, India is likely to come out as the second-biggest OTT market by the end of
2023. Over the last few years, the OTT subscribers were drastically increased especially among generation
z, there seems a high probability that OTT services will soon outwit the traditional media distribution
channels.

Almost everyone who has a smartphone or with smart tv at home knows either one or many of the OTT
platforms that are now available in the market. OTT which stands for “Over the Top” is a platform that
distributes movies and tv series/shows over the internet, unlike traditional cable TV. These OTT platforms
are the same as that of any other apps or services available on the internet, all you need to have been a
device that supports OTT and an internet connection. You can have access to a wide range of content, but
you don’t get every movie or a TV show ever made on a single platform. Each platform offers content that is
different from other platforms. The large number of platforms and offerings available across languages and
genres has increased the appetite for content consumption, executives at platforms said, on the back of cheap
data packs and smartphone penetration.

HARDWARE INDUSTRY

The computer hardware industry encompasses the companies that research, develop, design, assemble, test,
manufacture, and sell these various devices. Technological advances continue to produce complex
microchips in smaller sizes, enabling the computer hardware industry to provide smaller, more compact
devices to consumers. Flat-screen computer monitors and thinner, lighter laptops or tablet computers are but
a few of the innovative new products now available or in the planning stages. Also expected to lead the
growth in the industry are electronics with computing platforms such as those used in the medical and
healthcare industries, the telecommunications industry, and the automotive industry, as well as the growing
consumer demand for and use of mobile devices like smartphones that perform various functions of
computers

Although computer hardware companies can be found worldwide, including in India, Japan, and China,
many companies are located in the United States. Silicon Valley in California, Route 128 in Massachusetts,
Research Triangle in North Carolina, and Austin, Texas, are among areas in the United States with high
concentrations of computer hardware companies.

The industry employs workers of all education and skill levels. Computer scientists and engineers;
development, design, and production engineers; system analysts and set-up specialists; service technicians;
quality assurance specialists; and computer sales representatives are but a few of the career choices open to
those seeking work in the computer hardware field.
 Chapter -2

ORGANISATION PROFILE

NETFLIX

2.1 Back ground:

Netflix, in full Netflix, Inc., media-streaming and video-rental company founded in 1997 by

American entrepreneurs Reed Hastings and Marc Randolph. It is also involved in the creation of original
programming. Corporate headquarters are in Los Gatos, California. The company's primary business is a
subscription-based streaming service offering online streaming from a library of films and television series,
including those produced in-house.

In 1999 Netflix began offering an online subscription service through the Internet. Subscribers chose movie
and television titles from Netflix’s Web site; the shows were then mailed to customers in the form of DVDs,
along with prepaid return envelopes, from one of more than 100 distribution centres. Although customers
typically rented for a flat monthly fee as many movies per month as they wished, the number of DVDs in
their possession at any one time was limited according to their subscription plans. Netflix had tens of
thousands of movie titles in its catalogue.

In 2006 Netflix launched the $1 million Netflix Prize contest to see if anyone could improve by 10 percent
its recommendation system, an algorithm for predicting an individual’s movie preferences based on previous
rental data. Three years later the prize was awarded to Bell Kor's Pragmatic Chaos, a team made up of seven
mathematicians, computer scientists, and engineers from the United States, Canada, Austria, and Israel.

In 2007 Netflix began offering subscribers the option to stream some of its movies and television shows
directly to their homes through the Internet. For most subscription plans, the streaming service was
unlimited. Netflix subsequently partnered with manufacturers of various consumer electronics products,
including video game consoles and Blu-ray Disc players, in order to enable its videos to be streamed over an
Internet connection to those devices.

In 2010 Netflix introduced a streaming-only plan that offered unlimited streaming service but no DVDs.
Netflix then expanded beyond the United States by offering the streaming-only plan in Canada in 2010,
in Latin America and the Caribbean in 2011, and in the United Kingdom, Ireland, and Scandinavia in 2012.
By 2016 its streaming service was available in more than 190 countries and territories. Netflix had
announced in September 2011 that it would split its streaming and mail-based services, with the latter to be
called Qwikster, but abandoned the planned split a month later, citing an outcry from its subscribers. While
its streaming services became the biggest revenue generator—with more than 130 million subscribers in
2018—the rental division remained profitable.

Beginning in 2013 with the episodic drama series House of Cards, the company offered video content
produced specifically for its streaming service. Such content became a major focus of Netflix, and by the
end of 2018 it offered approximately 1,000 original titles. Its notable series included Unbreakable Kimmy
Schmidt, Stranger Things, Narcos, and The Crown. It also produced numerous movies—
notably Roma (2018), which won three Academy Awards, including best foreign language film.

Netflix's mail-order rental model would directly challenge the market dominance of bricks-and-mortar rental
giants like Blockbuster. In fact, Blockbuster could ultimately not compete with the move to online streaming
and rentals and filed for bankruptcy in 2010.  

But this never needed to happen. Years earlier, Blockbuster had the opportunity to partner with Netflix, or
even buy the company out.

2.2 Nature of business:

Netflix, Inc. operates as a streaming entertainment service company. The firm provides subscription service
streaming movies and television episodes over the Internet and sending DVDs by mail. It operates through
the following segments: Domestic Streaming, International Streaming and Domestic DVD.

2.3 Vision mission quality policy:

Netflix Inc.’s mission statement and vision statement target the entertainment market. The online company’s
strategic management uses the corporate vision statement to inform organizational development direction,
and the corporate mission statement to guide higher performance achievement. Netflix’s operations
management accounts for multinational business growth, including that of subsidiaries and franchises like
StoryBots. Based on its corporate mission and vision statements, the company targets the international
entertainment market’s biggest share, as executives seek new partnerships to penetrate current and new
markets. Furthermore, Netflix’s corporate vision and mission statements keep the business open to
diversification into other markets that are not limited to online media. This possibility points to potential
higher growth and expansion of the movie streaming business, in line with the corporate mission statement’s
aims in entertainment products and the corporate vision statement’s emphasis on industry leadership.

2.4 Workflow model:

Conductor was built to serve the above needs and has been in use at Netflix for almost a year now. To date, it
has helped orchestrate more than 2.6 million process flows ranging from simple linear workflows to very
complex dynamic workflows that run over multiple days.

2.5 Service profile:

The world's leading internet streaming company distributes movies and TV shows in a variety of genres and
languages to with nearly 183 million paid subscribers in more than 190 countries. Netflix creates its own
content and strikes deals with other producers for the rights to distribute programming. To keep viewers
binging, it deploys sophisticated algorithms to predict viewer preferences and make recommendations on
what to watch. Netflix still sends DVDs to US customers through the mail, though the legacy business gets
smaller every year.

2.6 Ownership pattern:

Institutional investors hold a majority ownership of NFLX through the 81.28% of the outstanding shares that
they control. This interest is also higher than at almost any other company in the Cable/Satellite TV
industry. Last, during the quarter ended June 2019, these large investors purchased a net $2.0 million shares.

2.7 Achievement/Awards:

Netflix has won fifteen awards from eighty-nine nominations.

Netflix became the first streaming service to earn major nominations and eventually win a
primetime emmy award.

2.8 Future growth and prospects:

Predicting the future is hard, but Netflix's future as the streaming video on-demand ("SVOD") king is
virtually assured. That's because no other SVOD service has anywhere near Netflix's $15 billion content
budget to pose a serious threat. And no other service can justify having a Netflix-like content budget without
first having the subscribers to support such a budget. It's a classic chicken-or-the-egg problem.
HP (Hewlett -Packard)

2.1.1 Back ground:

The Hewlett-Packard Company, commonly shortened to HP, was an American multinational information

technology company headquartered in Palo Alto, California. HP developed and provided a wide variety of
hardware components, as well as software and related services to consumers, small and medium-sized
businesses (SMBs), and large enterprises, including customers in the government, health and education
sectors. 

2.1.2 Nature of business:

Hewlett-Packard Company, American manufacturer of software and computer services. The company split
in 2015 into two companies: HP Inc. and Hewlett Packard Enterprise. Headquarters were in Palo Alto,
California.

2.1.3 Vision Mission Quality Policy:

HP vision statement is “to create technology that makes life better for everyone, everywhere — every
person, every organization, and every community around the globe.” 

HP mission statement is “we earn customer respect and loyalty by consistently providing the highest quality
and value.

HP Quality Policy is "Providing products, services, and solutions of the highest quality and delivering more
value to our customers that earn their respect and loyalty."
Providing products, services, and solutions of the highest quality and delivering more value tour customers
that earn their respect and loyalty." "To provide products, services and solutions of the highest quality and
deliver more value to our customers that earns their respect and loyalty. “To view change in the market as an
opportunity to grow; to use our profits and our ability to develop and produce innovative products, services
and solutions that satisfy emerging customer needs."

2.1.4 Workflow model:

HP a name popularly known for their PC’s and printers, but when it comes to the company as a whole, they
have used demographic and geographic segmentation variables to address the needs of the retail and
corporate customers.Targeting is one of the important pillars of the marketing strategy. HP uses
differentiating targeting strategy to provide customised products & services to the enterprises. HP uses a mix
of value/ product and pricing based positioning strategies to compete in the market.

2.1.5 Product profile:

HP Inc. engages in the provision of personal computing and other access devices, imaging and printing
products, and related technologies, solutions, and services. It operates through following business segments:
Personal Systems, Printing, and Corporate Investments. 

2.1.6 Ownership pattern:

Institutional investors hold a majority ownership of HPQ through the 80.49% of the outstanding shares that
they control. This interest is also higher than at almost any other company in the Computer Processing
Hardware industry. Last, during the quarter ended April 2019, these large investors purchased a net $15.2
million shares

.2.1.7 Achievements/Awards:
HP honoured with Most Trusted Company for Privacy Award,

HP named to Working Mother magazine's list of 100 Best Companies for Working Mothers Magazine
(September 2004).

HP Tops Customer Satisfaction Survey.

2.1.8 Future growth and prospects:

Although HP has been a leader in almost all of the major hardware systems for decades, it has recently had
to overcome negative assumptions about its forward growth for many reasons. For one, industry competition
has increased to the point of reducing HP’s market share slightly over the past few years. Secondly, the
perception of HP as the undisputed market leader in hardware is being challenged by a number of these
competitors. HP maintains its dominance in certain segments such as printers and printer accessories, but
there is definitely room for improvement in other areas.

Chapter -3
 Mckensy's 7s framework and porters five force model

The McKinsey 7s model is a strategic tool and framework that helps managers and businesses assess their
performance. The McKinsey 7s model identifies 7 key elements for an organization that need to be focused
and aligned for successful change management processes as well as for regular performance enhancements.

Netflix:

Netflix makes use of the McKinsey 7s model to regularly enhance its performance, and implement
successful change management processes. Netflix focuses on the 7 elements identified in the model to
ensure that its performance levels are consistently maintained, and improved for the offerings.

the McKinsey 7s model comprise of strategy, structure, staff, skills, style and shared value.

Strategy:

Netflix aims to deliver streamed content at an affordable cost, to consumer’s different platforms such as
smart phones, tablets, computers and smart TV’s. For a monthly fee, customers can access a large library of
movies, series and documentaries, free of commercials (Granados, 2015).

Netflix does not use a Freemium Model, which is widely used among competitors and other streaming
services such as Spotify. Instead, all content is free of advertisements. This has had a major impact on TV
networks, who have now started to decrease the amount of advertisement during prime time shows
(McAloney, 2015).

Netflix has opted for a dual strategy in order to attract as many customers as possible. Their first strategy is
to offer one of the markets most affordable service. Compared to its competitors, Netflix price is one of the
lowest on the market. Their second strategy is to move from being a distributor of content to offer original
content that is exclusive to Netflix (Shah, 2015).

Structure:

Netflix has been commended for pioneering innovations in the area of human resource management
(McCord, 2014). The organisation has a functional organisation structure, which is notably flat. The
worldwide operations of Netflix are run by a senior management that is segmented into different functional
departments rather than by customer segment or region. The departments are each headed by Chief Officers
that report directly to the Chief Executive Officer. In this regard, the top-level management is considered as
having a centralised structure. The organisational structure below shows the top-level management structure.

Systems:

Netflix has five main systems that the organisation runs on a day-to-day basis. They are acquisition,
packaging, exhibition, distribution and sales.

Staff:

Netflix staff’s main strengths lay in their Finance and Computer Engineering Departments, but have had
weaknesses in their PR and Marketing Departments. These weaknesses in leadership have been addressed
and the company continues to grow today. The staff are highly skilled and well-educated, coming from
universities such as Stanford and Yale.

Style:

By hiring the right people and providing the right environment, Netflix has achieved a well-balanced AGES
Framework (Architecture, Governance, Entrepreneurship, Stewardship approach) that provides them with a
sustainable competitive advantage through ongoing innovative strategies such as these. The management
style incorporates psychological and situational factors, such as empowerment, involvement orientation and
a collectivistic culture.

Skills:

Netflix entrusts that the majority of the staff they hire will act in the best interests of the company, so much
so that they have made it policy. Netflix moved from standard performance reviews to social performance
software in the infancy stages, and then progressed to face to face 360-degree feedback as a result of
transcending the “Crisis of Autonomy”.

Shared Values:

The companies shared values are its culture, vision and mission. These three aspects permeate through
company and help the employees understand their purpose, direction and leadership goals. Netflix mission is
as follows “We promise our customers stellar service, our suppliers a valuable partner, our investors the
prospects of sustained profitable growth, and our employees the allure of huge impact.”

HP (Hewlett – Packard)

Strategy:

An important aspect of the strategy at HP is that it takes into constant consideration the changing consumer
trends and demands, as well as the evolving consumer market patterns and consumption behaviour. This is
an important part of the strategic direction at HP as it allows the company to remain competitive and
relevant to its target consumer groups, as well as allows the company to identify demand gaps in the
consumer market. 

Structure:

HP has a flatter organizational hierarchy that is supported by learning and progressive organizations. With
lesser managerial levels in between and more access to the senior management and leadership, the
employees feel more secure and confident and also have higher access to information. 

System:

HP has defined and well-demarcated systems in place to ensure that the business operations are managed
effectively and that there are no conflicts or disputes. The systems at HP are largely departmental in nature.

Staff:

HP has a sufficient number of employees employed across its global operations. Employees for different job
roles and positions are hired internally as well as externally – depending on the urgency and the skill levels
required.

Style:

HP has a participative leadership style. Through a participative leadership style, HP is able to engage and
involve its employees in decision-making processes and managerial decisions. This also allows the
leadership to regularly interact with the employees and different managerial groups to identify any potential
conflicts for resolution, as well as for feedback regarding strategic tactics and operations.

Skills:

HP has a commendable workforce, with high skills and capacities. All employees are recruited based on
their merit and qualifications. HP prides itself on hiring the best professionals and grooming them further to
facilitate growth and development.
Shared values:

The core values at HP are defined and communicated to foster a creative and supportive organizational
structure that will allow employees to perform optimally, and enhance their motivation and organizational
commitment.

Porter's five force model

Netflix

Threat of New Entrants: The presence of new entrants becomes a threat when the industry has dynamics that
support the business to become well-established and profitable. Netflix is a part of the media and
entertainment industry, where the threat of new entrants is moderate. The moderate level of threat is created
due to the evolving technology and changes that emerge as a result of technology up gradation.

Bargaining Power of Buyers: The media and entertainment industry dynamics allow the customers to have a
high level of bargaining power over the service providers. The sales and revenue generated by the company
is dependent on the subscribers who are located in different regions across the globe.

Bargaining Power of Suppliers: The suppliers of Netflix can be viewed as holding high bargaining power.
This high degree of influence on pricing is due to the few numbers of entities producing media and
entertainment-based content. 

Threat of Substitute Products:

The substitute products pose moderate level of risk in the media and entertainment industry. Netflix faces
threat from substitute service which are offering similar products through rental DVDs and online streaming.

Competitive Rivalry:
Netflix is facing severe competition from traditional broadcasters, rival companies providing videos on
demand and retailers selling DVDs (Netflix, Inc., 2018). Amazon is the main direct competitor of Netflix as
both of the companies are providing DVDs on rent, thus competing for the similar target market in this
domain.

HP (Hewlett -Packard)
Competitive Rivalry in the Market:
The personal computer industry is highly competitive in nature. The laptop market has taken off in the late
last decade, and then it changed the way world works. There are many companies with specific departments
manufacturing computers. HP is among the top personal computer manufactures. HP’s competitors in the
industry are Lenovo, Dell, and Apple. Lenovo is the market leader with 24.1% market share, HP, Dell, and
Apple has 22.2%, 16.8%, and 7% market share, respectively; whereas Lenovo and HP shipped 63 million,
58 million units.

Threat of Substitutes:
The smartphones and tablets are there for over a decade now; in the short-term, there is no complete
alternative for laptops. The threat of substitutes is moderate in the short-term and in the medium-term threat
is high of alternatives.

The Threat of New Entrants:

The personal computer market is highly competitive. Lenovo and HP have almost half the market share of
the total personal computer market. 

Bargaining Power of Buyers:

Buyers of personal computers can be broadly categorized into two categories business users and personal
users. information is available, and the buyer has options, a potential buyer can search for the best-suited
item. As a result, companies offer a range of products to attract a large number of buyers. Buyers have
moderate bargaining power.

Bargaining Power of Supplier:

There are three sources of supply component suppliers, software suppliers, and human resource expertise.
Companies are trying to reduce their reliance on this hardware and operating system providers by
manufacturing personal computers by using products from other vendors. Overall, suppliers have moderate
bargaining power.
 Chapter -4

SWOC and PESTEL analysis

SWOC ANALYSIS

NETFLIX

Strength: As an essential component of SWOT, a company's strength is its asset to plan its expansion.
Netflix has several strengths that make them one of the top streaming services.

 Netflix has a strong brand reputation The company has also shown exponential growth in recent
years.
 Netflix has a global presence and is affordable to many Southeast Asian countries. It has given them
an advantage in the continually changing market scenario.

Weakness: Though Netflix is one of the top companies, there is a particular weakness that is working as a
hindrance to their growth:

 Netflix has limited copyright, which tolls upon their revenue. The debts of the company are also
increasing.
 There is a lack of original content in several countries. Therefore, they have less demand for high
price subscriptions in some countries.

Opportunities: The need for OTT platforms is also rising, which is a good sign for Netflix. So, some of the
significant opportunities that the firm can grasp from the current market are:

 As Netflix has a brand reputation, the great demand for OTT platforms in the current market can
allow the brand to expand.
 Netflix is already a global presence. They can strengthen their subscriber base by a strategic
partnership with local markets that will help them to capture the local market.

Challenges: the companies may have to face the threats posed in the way of their expansion. As one of the
biggest OTT companies, Netflix is not an exception. So, the threats and risks that Netflix is exposed to are:

 COVID-19 has affected the reproduction of new original shows and movies. Like most parts of the
entertainment industry, Netflix is also affected by the pandemic. Gradually with normalization, the
condition will improve.
 The government regulations in certain countries can hold them from expansion.
HP (Hewlett -Packard)

Strength:

 HP has maintained a strong brand image as a maker of computing and printing products. 
 HP’s focus on innovation has helped the company retain its leadership position in the US market.

Weakness:

 The demand for computing products and mainly desktops has been steadily declining, driven by
mobile computing and cloud technology growth. 
 HP’s long-term debt has grown in 2020.

Opportunities:

 Focusing on product innovation helps the company maintain sales and demand. Apart from that, it
also helps reduce competitive pressure.
 Digital marketing can help the company grow brand awareness stronger as well as beat the
competitive pressure in key markets. 

Challenges:

 The competitive pressure on HP has continued to intensify. The two leading competitors of HP are
Lenovo and Dell.
 The tech industry is facing heavier government scrutiny and legal oversight in recent years. 

PESTEL analysis

NETFLIX
Political: In the case of Netflix, we need to look at what can be digitized in certain countries, based on the
laws and the culture. The last thing Netflix would want is to have a scandal because one of their programs has
offended the population of a country. This is the reason why Netflix shows different films and programs in
different countries and also why some programs or films are locked out of certain regions.

Economic: In Netflix's case, they need to charge a different monthly fee based not only on the country's
economy but also on the shows and films they can provide in that country. Every title generates a different
type of revenue and costs them a certain amount to stream on their service. 

Social: Sociocultural factors focus on the consumers as well as the potential consumers present in a certain
geographical location. the success of Netflix has been linked very much to the influence it’s had on social
media promotion as well as the fact that it leans more towards the younger generation.

Technological: This section should be the most important, especially because we’re living in the era of
digitalization. From a technological point of view, Netflix is pretty much straightforward. The website or
application can be accessed by any smart device or computer connected to the internet. They have more than
enough servers to offer and maintain a solid connection of the stream to the consumer.

Environmental: This section is becoming more and more important as times goes by because of factors such
as climate change and scarcity of raw materials. Netflix does not really produce any products; they’re not
wasting any natural resources. However, they do produce carbon dioxide by using electricity to keep their
servers running. 

Legal: The legal section is more straightforward, looking at such things as the consumer’s rights, product
safety, and the terms that you set if you offer a service. Netflix needs to make sure that they respect the
regional restrictions of certain shows or films. 

HP (Hewlett -Packard)

Political:  The political analysis of HP pertaining to government controls and rules in the effort of HP to
keep up with the Environmental and CSR (Corporate Social Responsibility) Codes and in terms of decency,
quality and environmental concerns.

Economical:  HP mainly relies on revenue from its printing hardware, financial investments, investments in
small and medium enterprises and internet solutions for its maintenance.

Social:  HP has the local US consumer base well captured but it seems that there is very little to be done
here in terms of attracting the upcoming young generation of IT zealot and unless there is a stress upon
updating the models of its hardware for printing and PCs to catch up with the hype created by HP and Intel
who unveil new models almost every other month.
Technological:  HP went “cyber” almost a decade ago, which is fairly recent in comparison to its 70-
yearlong market presence (HP, 2009). In fact, the turning point of HP’s luck came in 1998 when HP’s
corporate software and support division and corporate systems division was amalgamated and Ann
Livermore took over to run this new Enterprise Computing Solutions Organisation (ECSO), with an
investment of $15 billion and an employee base of 44,000 employees (Moore and Snyder, 2000).

Environmental:  HP’s operations are subject to regulations under federal, state, local and foreign laws
concerning the environment, including laws addressing the discharge of pollutants into the air and water, the
management and disposal of hazardous substances and wastes, and the clean-up of contaminated sites.

Legal: Patent Reform Legislation – As one of the largest patent holders in U.S, HP is on average granted
four patents every day. HP is a constant target of frivolous patent lawsuits. These lawsuits force HP to divert
resources away from innovation and product development, leading to reduced economic benefits from
invention (HP, 2009).

CHAPTER –5

ANALYSIS OF FINANCIAL STATEMENT

NETFLIX:
Consolidated balance Sheet From 2019-2020

2019 ($) 2020 ($) Absolute change Percentage

change
Assets
Current Assets:
Cash and cash equivalents 5018437 8205550 3187113 63.50 %
Short-term investment 0 0 - -
Current content assets, net 0 0 - -
Other current assets 1160067 1556030 395963 34.13%
Total current assets 6178504 9761580 3583076 57.99 %
Non-current content, net 24504567 25383950 879383 3.588%
Property and equipment, net 565221 960183 394962 69.87%
Other non-current assets 2727420 3174646 447226 16.3%
Total assets 33975712 39280359 5304647 15.61%
Liabilities and stockholders' equity
Current liabilities:
Current content liabilities 4413561 4429536 15975 0.36%
Accounts payable 674347 656183 (18164) 2.69%
Accrued expenses 843043 1102196 259153 30.74%
Deferred revenue 924745 1117992 193247 20.89%
Short term debt 0 499878 - -
Total current liabilities 6855696 7805785 950089 13.85%
Non-current content liabilities 3334323 2618084 (716239) 21.48%
Long-term debt 14759260 15809095 1049835 7.11%
Other non-current liabilities 1444276 1982155 537879 37.24%
Total liabilities 23393555 28215119 4821564 20.61%
Stock holders' equity:
Common stock 2793929 3447698 653769 23.39%
Accumulated other comprehensive loss (23521) 44398 (20877) 88.75%
Retained earnings 4811749 7573144 2761395 57.38%
Total stock holders' equity 7582157 11065240 3483083 45.93%
Total liabilities and stock holders' 33975712 39280359 53046447 15.61%
equity

The balance sheet is a report of a company’s financial worth in terms of book value. It is

comprised of three parts: assets, liabilities and shareholder’s equity (Kenton). The balance sheets

is a basic overview of what the company owns, owes and the amount invested by shareholders?

The balance sheet plays a significant role in the financial analysis process. According to CFI, the

balance sheet is based on the following fundamental equation: Assets = Liabilities + Equity

(“Balance Sheet - Definition & Examples (Assets = Liabilities + Equity)”).

(1) The comparative balance sheet of the company reveals that during 2020 there has been an increase in
fixed asset of $ 4176251 i.e., 16.47 % while long-term liabilities to outsiders have relatively increased by $
14151475 and equity share capital has increased by $3483083. This fact depicts that the policy of the
company is to purchase fixed assets from the long-term sources of finance thereby not affecting the working
capital.

(2) The current assets have increased by 3583076 i.e., 57.99% and cash has increased by $3187113. The
current liabilities have increased only by $950089 i.e., 13.85%. This further confirms that the company has
raised long-term finances even for the current assets resulting into an improvement in the liquidity position
of the company.

(3) The total liability and stock holders' equity has increased by $53046447 i.e., 15.61%

(4) The overall financial position of the company is satisfactory,