Financial Analysis of

Netflix
Haseeb Ahmed 202291046003
Abdul Jabbar Alshami 202191047020
 Netflix
Netflix, in full Netflix, Inc., media-streaming and video-
rental company.
It was 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
An online subscription service that started in 1999
Allowed users to choose the series or movies that they
want to watch over the Internet, and then mail them to
them in the form of a DVD
 Netflix
In 2006, the number of Netflix users exceeded
one million subscribers. One of the reasons for
these successes is the awards offered by Netflix
for the films and series that you display and
make them a competition to reach the best
appreciation.

In 2007, the big surprise happened, which is that

the subscriber can watch his favorite movie or
series from his home, by directly subscribing to
Netflix.
 Netflix
This followed many developments in the types of
subscription, such as:
the family subscription
the personal subscription
Expansion of the Netflix network and its cinematic
production

Netflix has now become one of the great leaders

in the field of cinema and the production of films
and series.
Balance Sheet
Income Statement
 Current Ratio
Current Ratio 2022
Current ratio = current assets /
current liabilities 1.17
= $9,266,473 / $7,930,974
= 1.17 1
0.9

Current Ratio 2021

Current ratio = current assets /
current liabilities
= $8,069,825 / $8,488,966 Series1
= 0.95 Amazon Netflix Disney
 Quick Ratio
Quick Ratio 2022
Quick Ratio = Cash + Marketable
Securities + Account Receivable /
Current liabilities 0.96

= (6,058,452 + 988,898) / 7,930,974 0.8

= 0.962 0.7

Quick Ratio 2021

Quick Ratio = Cash + Marketable
Securities + Account Receivable /
Current liabilities Series1
= 6,027,804 + 804,320) / 8,488,966
Amazon Netflix Disney
= 0.823
 Cash Ratio
Cash Ratio 2022
Cash Ratio = Cash and cash 0.76

equivalent + Marketable
Securities/Current Liabilities
= (6,058,452 + 0) / 7,930,974
= 0.764
0.45

0.31

Cash Ratio 2021

Cash Ratio = Cash and cash
equivalent + Marketable
Securities/Current Liabilities Series1

= (6,027,804 + 0) / 8,488,966 Amazon Netflix Disney

= 0.711
 Gross Profit Margin
Gross Profit Margin 2022
Gross Profit Margin = Gross Profit /
Revenue 0.44

= (12,365,161 / 31,615,550) 39%

= 0.391 0.33

Gross Profit Margin 2021

Gross Profit Margin = Gross Profit /
Revenue
= (9,719,737 / 29,697,844)
Series1
= 0.327
Amazon Netflix Disney
 Operating Profit Margin
Operating Profit Margin 2022
Operating Profit Margin = EBIT / 19%

Revenue
= (5,970,141/ 31,615,550)
= 0.189

0.0812
0.07
Operating Profit Margin 2021
Operating Profit Margin = EBIT /
Revenue
= (6,605,723 / 29,697,844)
= 0.222 Series1

Amazon Netflix Disney

 Net Profit Margin
Net Profit Margin 2022
Net Profit Margin = Net Income / 0.19

Revenue
= (4,491,924 / 31,615,550)
= 0.142 14%

Net Profit Margin 2021

Net Profit Margin = Net Income / 0.0393
Revenue
= (5,116,228 / 29,697,844)
= 0.172 Series1

Amazon Netflix Disney

 Return on Assets
Return On Assets 2022
9%
ROA = Net Income / Total Assets
= (4,491,924 / 48,594,768)
= 0.092

Return On Assets 2021

ROA = Net Income / Total Assets 0.018

= (5,116,228 / 44,584,663) 0.01
= 0.115 Series1

Amazon Netflix Disney

 Return on Equity
Return On Equity 2022
ROE = Net Income / Stokholders
Equity 22%

= (4,491,924 / 20,777,401)
= 0.216

Return On Equity 2021

ROE = Net Income / Stokholders
0.036
Equity 0.03

= (5,116,228 / 15,849,248) Series1

= 0.323
Amazon Netflix Disney
 Debt Ratio
Debt Ratio 2022
Debt Ratio = Total Liabilities / Total
Assets 0.68
= (27,817,367 / 48,594,768)
= 0.572 0.57
0.51

Debt Ratio 2021

Debt Ratio = Total Liabilities / Total
Assets
= (28,735,415 / 44,584,663) Series1
= 0.645
Amazon Netflix Disney
 Debt to Equity Ratio
Debt to Equity Ratio 2022
Debt to Equity Ratio = Total Liabilities
/ Total Equity 2.17

= (27,817,367 / 20,777,401)
= 1.339
1.34

1.06

Debt to Equity Ratio 2021

Debt to Equity Ratio = Total Liabilities
/ Total Equity
= (28,735,415 / 15,849,248)
= 1.813 Series1

Amazon Netflix Disney

 Equity Ratio
Equity Ratio 2022
Equity Ratio = Total Equity/ Total
Assets 0.49
= (20,777,401 / 48,594,768)
= 0.428 0.43

0.32

Equity Ratio 2021

Equity Ratio = Total Equity/ Total
Assets
= (15,849,248 / 44,584,663)
= 0.355 Series1

Amazon Netflix Disney

 Vertical Analysis
Income Statement
  2022 % 2021 %
Revenue 31,615,550 100.00% 29,697,844 100.00%

Cost of Revenue 19,168,285 60.63% 17,332,683 58.36%

Gross Profit 12,447,265 39.37% 12,365,161 41.64%

Operating Expense 6,814,434 21.55% 6,170,652 20.78%

Operating Income 5,632,831 17.82% 6,194,509 20.86%

Net Non Operating Interest Income Expense -368,902 -1.17% -354,406 -1.19%

Pretax Income 5,263,929 16.65% 5,840,103 19.67%

Tax Provision 772,005 2.44% 723,875 2.44%

Net Income Common Stockholders 4,491,924 14.21% 5,116,228 17.23%

 Vertical Analysis
Balance Sheet
  2022 % 2021 %
Cash On Hand 6,058,452 12.47% 6,027,804 13.52%
Receivables - - - -
Inventory - - - -
Pre-Paid Expenses - - - -
Other Current Assets 3,208,021 6.60% 2,042,021 4.58%
Total Current Assets 9,266,473 19.07% 8,069,825 18.10%
Property, Plant, And Equipment 1,398,257 2.88%  1,323,453 2.97%
Long-Term Investments - - - -
Goodwill And Intangible Assets - - - -
Other Long-Term Assets 37,930,040 78.05% 35,191,390 78.93%
Total Long-Term Assets 39,328,300 80.93% 36,514,840 81.90%
Total Assets 48,594,770 100.00% 44,584,660 100.00%
Total Current Liabilities 7,930,974 16.32% 8,488,966 19.04%
Long Term Debt 14,353,080 29.54% 14,693,070 32.96%
Other Non-Current Liabilities 5,533,317 11.39% 5,553,377 12.46%
Total Long Term Liabilities 19,886,390 40.92% 20,246,450 45.41%
Total Liabilities 27,817,370 57.24% 28,735,410 64.45%
Common Stock Net 4,637,601 9.54% 4,024,561 9.03%
Retained Earnings (Accumulated Deficit) 17,181,300 35.36% 12,689,370 28.46%
Comprehensive Income -217,306 -0.45% -40,495 -0.09%
Other Share Holders Equity - - - -
Share Holder Equity 20,777,400 42.76% 15,849,250 35.55%
Total Liabilities And Share Holders Equity 48,594,770 100.00% 44,584,660 100.00%
 Horizontal Analysis
Income Statement
% 2022 % 2021
 
Revenue 106.46% 31,615,550 100% 29,697,844

Cost of Revenue 110.59% 19,168,285 100% 17,332,683

Gross Profit 100.66% 12,447,265 100% 12,365,161

Operating Expense 110.43% 6,814,434 100% 6,170,652

Operating Income 90.93% 5,632,831 100% 6,194,509

Net Non Operating Interest Income Expense 104.09% -368,902 100% -354,406

Pretax Income 90.13% 5,263,929 100% 5,840,103

Tax Provision 106.65% 772,005 100% 723,875

Net Income Common Stockholders 87.80% 4,491,924 100% 5,116,228

 Horizontal Analysis
Balance Sheet
  % 2022 % 2021
Cash On Hand 100.51% 6,058,452 100% 6,027,804
Receivables - - - -
Inventory - - - -
Pre-Paid Expenses - - - -
Other Current Assets 157.10% 3,208,021 100% 2,042,021
Total Current Assets 114.83% 9,266,473 100% 8,069,825
Property, Plant, And Equipment 105.65% 1,398,257 100%  1,323,453
Long-Term Investments - - - -
Goodwill And Intangible Assets - - - -
Other Long-Term Assets 107.78% 37,930,040 100% 35,191,390
Total Long-Term Assets 107.70% 39,328,300 100% 36,514,840
Total Assets 108.99% 48,594,770 100% 44,584,660
Total Current Liabilities 93.43% 7,930,974 100% 8,488,966
Long Term Debt 97.69% 14,353,080 100% 14,693,070
Other Non-Current Liabilities 99.64% 5,533,317 100% 5,553,377
Total Long Term Liabilities 98.22% 19,886,390 100% 20,246,450
Total Liabilities 96.81% 27,817,370 100% 28,735,410
Common Stock Net 115.23% 4,637,601 100% 4,024,561
Retained Earnings (Accumulated Deficit) 135.40% 17,181,300 100% 12,689,370
Comprehensive Income 536.62% -217,306 100% -40,495
Other Share Holders Equity - - - -
Share Holder Equity 131.09% 20,777,400 100% 15,849,250
Total Liabilities And Share Holders Equity 108.99% 48,594,770 100% 44,584,660