NETFLIX

FINANCIAL
(
ANALYSIS
(RATIO ANALYSIS,DU-POINT ANALYSIS
, HORIZONTAL&VERTICAL ANALYSIS,
TREND ANALYSIS)

ANSHIK SHARMA

FORECASTED PERIOD 2024-2028

 RATIO ANALYSIS

Particulars in Millions 2023A 2024E 2025E 2026E 2027E 2028E

Liquidity Ratios:
Current Ratio 1.12 0.56 1.09 1.91 2.63 3.26
Quick Ratio 0.95 0.33 0.89 1.72 2.45 3.11
Cash Ratio 0.81 0.12 0.66 1.48 2.20 2.84

Efficiency Ratios:
Receivables turn over ratio 17.32 17.53 18.12 18.13 18.13 18.14
Accounts Payables T/O ratio 27.79 29.67 30.19 30.21 30.22 30.24
Working capital turnover ratio -8.88 -8.65 2.93 1.25 0.87 1.67
Total assets turnover ratio 0.69 0.86 0.99 0.97 0.93 0.91
Days of sale outstanding 21.07 20.82 20.15 20.14 20.13 20.12
Number of days of payable 13.13 12.30 12.09 12.08 12.08 12.07
Equity Turnover Ratio 1.63 1.63 1.43 1.30 1.22 1.15
Current assets turnover ratio 3.52 5.85 7.92 4.63 3.28 2.68
Fixed assets turnover ratio 23.34 26.79 31.35 36.85 43.51 51.61

Profitability Ratios:
Gross Profit Margin 42% 41% 41% 41% 41% 41%
Operating Profit Margin 21% 20% 20% 20% 20% 20%
Pretax Margin 16% 16% 18% 17% 17% 17%
Net Profit Margin 16% 18% 17% 17% 17% 17%
Cash Flow Margin 22% 14% 16% 14% 13% 12%
Return On Assets 11% 16% 17% 17% 16% 16%
Return On Capital Emp 17% 20% 0% 0% 0% 0%
Return on Invested Capital 19% 0% 0% 0% 0% 0%
Return On Equity 26% 30% 25% 23% 21% 20%

Solvency ratio :
Interest coverage ratio -9.94 19.49 140.25 0.00 0.00 0.00
Fixed charge coverage ratio -9.94 19.49 140.25 0.00 0.00 0.00
Financial leverage ratio 2.36 1.78 1.55 1.47 1.42 1.38
Debt to equity 0.71 0.10 0.00 0.00 0.00 0.00
Debt to capital 0.41 0.09 0.00 0.00 0.00 0.00
Debt to assets 0.30 0.07 0.00 0.00 0.00 0.00
Proprietory ratio 0.42 0.65 0.73 0.76 0.78 0.80
Fixed asset to proprietory ratio 3530 2287 2013 1915 1833 1758

Cash Flow Ratios:

Operating Cash Flow Ratio 0.82 0.85 1.02 0.94 0.92 0.92
 DU POINT ANALYSIS
(RETURN ON EQUITY & RETURN ON ASSET)

Particulars in Millions 2023A 2024E 2025E 2026E 2027E 2028E

Return on Equity
Net profit 5408 7261 8079 9327 10856 12646
Average shareholders Equity 20683 24363 32300 41234 51523 63444
Return on Equity 26% 30% 25% 23% 21% 20%

Return on Equity DU point equation

Net profit 5408 7261 8079 9327 10856 12646

Revenue 33,723 39,832 46,264 53,791 62,604 72,929
Net profit margin( A ) 16% 18% 17% 17% 17% 17%

Revenue 33,723 39,832 46,264 53,791 62,604 72,929

Average total assets 48663 46068 46682 55353 66995 80501
Asset turn over ratio( B ) 69% 86% 99% 97% 93% 91%

Average total assets 48663 46068 46682 55353 66995 80501

Average shareholders equity 20683 24363 32300 41234 51523 63444
Equity multiplier ( C ) 2.352836 1.890939 1.445246 1.342417 1.3003 1.268852

RETURN ON EQUITY=A*B*C 26% 30% 25% 23% 21% 20%

RETURN ON ASSET(ROA)
Net profit 5408 7261 8079 9327 10856 12646
Average total assets 48663 46068 46682 55353 66995 80501
RETURN ON ASSET(ROA) 11% 16% 17% 17% 16% 16%

RETURN ON ASSET(ROA)-DU POINT EQUATION

Net profit 5408 7261 8079 9327 10856 12646
Revenue 33,723 39,832 46,264 53,791 62,604 72,929
Net profit margin( A ) 16% 18% 17% 17% 17% 17%

Revenue 33723 39832 46264 53791 62604 72929

Average total assets 48663 46068 46682 55353 66995 80501
Asset turn over ratio( B ) 0.69 0.86 0.99 0.97 0.93 0.91

RETURN ON ASSET(ROA) 11% 16% 17% 17% 16% 16%

 HORIZONTAL ANALYSIS
(INCOME STATEMENT)

HISTORICAL FORECASTED
Particulars in Millions 2021A 2022A 2023A 2024E 2025E 2026E 2027E 2028E

Revenues 6% 7% 18% 16% 16% 16% 16%

Cost of revenues 11% 3% 19% 16% 16% 16% 16%
Marketing -1% 5% 20% 16% 16% 16% 16%
Technology and development 19% -1% 19% 16% 16% 16% 16%
General and administrative 16% 9% 16% 16% 16% 16% 16%
Operating income -9% 23% 15% 16% 16% 16% 16%
Other income (expense):
Interest expense -8% -1% -158% -84% -100% 0% 0%
Interest and other income (expense) -18% -114% -100% 0% 0% 0% 0%
Income before income taxes -10% 18% 35% 11% 15% 16% 16%
Provision for income taxes 7% 3% 40% 11% 15% 16% 16%
Net income -12% 20% 34% 11% 15% 16% 16%
 HORIZONTAL ANALYSIS
(BALANCE SHEET)

HISTORICAL FORECASTED
Particulars in Millions 2022A 2023A 2024E 2025E 2026E 2027E 2028E

Assets:
Current assets:
Cash and cash equivalents 38% -89% 508% 144% 63% 42%
Short-term investments -98% 0% 0% 0% 0% 0%
Trade receivables 30% 8% 16% 16% 16% 16%
Other current assets -33% 0% 0% 0% 0% 0%
Total current assets 7% -63% 115% 91% 51% 37%
Content assets, net -3% 3% 7% 10% 12% 14%
Property and equipment, net 7% -1% -1% -1% -2% -2%
Other non-current assets 9% 0% 0% 0% 0% 0%
Total assets 0% -11% 15% 22% 21% 20%
Liabilities and Share holder Equity: 0% 0% 0% 0% 0% 0%
Current liabilities: 0% 0% 0% 0% 0% 0%
Current content liabilities 0% -42% 21% 16% 16% 16%
Accounts payable 11% 12% 16% 16% 16% 16%
Accrued expenses and other liabilities 19% 0% 0% 0% 0% 0%
Deferred revenue 14% 0% 0% 0% 0% 0%
Short-term debt 0% -100% 0% 0% 0% 0%
Total current liabilities 12% -25% 10% 9% 10% 10%
Non-current content liabilities -16% 21% 16% 16% 16% 16%
Long-term debt -1% -79% -100% 0% 0% 0%
Other non-current liabilities 4% 0% 0% 0% 0% 0%
Total liabilities 1% -46% -12% 9% 10% 11%
0% 0% 0% 0% 0% 0%
Preferred stock 0% 0% 0% 0% 0% 0%
Common stock 11% 6% 5% 4% 3% 3%
Treasury stock at cost 740% 0% 0% 0% 0% 0%
Accumulated other comprehensive loss 3% 0% 0% 0% 0% 0%
Retained earnings 31% 32% 27% 25% 23% 22%
Total stockholders’ equity -1% 37% 30% 26% 24% 22%
Total liabilities and stockholders’ equity 0% -11% 15% 22% 21% 20%
 Vertical analysis
(INCOME STATEMENT)

HISTORICAL FORECASTED
Particulars in Millions 2021A 2022A 2023A 2024E 2025E 2026E 2027E 2028E

Revenues 100% 100% 100% 100% 100% 100% 100% 100%

Cost of revenues 58% 61% 58% 59% 59% 59% 59% 59%
Marketing 9% 8% 8% 8% 8% 8% 8% 8%
Technology and development 8% 9% 8% 8% 8% 8% 8% 8%
General and administrative 5% 5% 5% 5% 5% 5% 5% 5%
Technology and development 21% 18% 21% 20% 20% 20% 20% 20%
Other income (expense):
Interest expense -3% -2% -2% 1% 0% 0% 0% 0%
Interest and other income (expense) 1% 1% 0% 0% 0% 0% 0% 0%
Income before income taxes 20% 17% 18% 21% 20% 20% 20% 20%
Provision for income taxes -2% -2% -2% -3% -3% -3% -3% -3%
Net income 17% 14% 16% 18% 17% 17% 17% 17%
 Vertical analysis
(BALANCE SHEET)

HISTORICAL FORECASTED
Particulars in Millions 2021A 2022A 2023A 2024E 2025E 2026E 2027E 2028E

Assets:
Current assets:
Cash and cash equivalents 11% 15% 2% 10% 19% 26% 31%
Short-term investments 2% 0% 0% 0% 0% 0% 0%
Trade receivables 2% 3% 3% 3% 3% 3% 3%
Other current assets 5% 3% 3% 3% 2% 2% 2%
Total current assets 19% 20% 9% 16% 25% 31% 36%
Content assets, net 67% 65% 75% 70% 63% 59% 56%
Property and equipment, net 3% 3% 3% 3% 2% 2% 2%
Other non-current assets 11% 12% 13% 11% 9% 8% 6%
Total assets 100% 100% 100% 100% 100% 100% 100%
Liabilities and Share holder Equity:
Current liabilities:
Current content liabilities 9% 9% 6% 6% 6% 6% 6%
Accounts payable 1% 2% 2% 2% 2% 2% 2%
Accrued expenses and other liabilities 3% 4% 4% 4% 3% 2% 2%
Deferred revenue 3% 3% 3% 3% 2% 2% 2%
Short-term debt 0% 1% 0% 0% 0% 0% 0%
Total current liabilities 16% 18% 15% 15% 13% 12% 11%
Non-current content liabilities 6% 5% 7% 7% 7% 7% 6%
Long-term debt 30% 29% 7% 0% 0% 0% 0%
Other non-current liabilities 5% 5% 6% 5% 4% 3% 3%
Total liabilities 57% 58% 35% 27% 24% 22% 20%
0% 0% 0% 0% 0% 0% 0%
Preferred stock 0% 0% 0% 0% 0% 0% 0%
Common stock 10% 11% 13% 11% 10% 8% 7%
Treasury stock at cost -2% -14% -16% -14% -11% -9% -8%
Accumulated other comprehensive loss 0% 0% -1% 0% 0% 0% 0%
Retained earnings 35% 46% 69% 76% 78% 79% 81%
Total stockholders’ equity 43% 42% 65% 73% 76% 78% 80%
Total liabilities and stockholders’ equity 100% 100% 100% 100% 100% 100% 100%
 TREND ANALYSIS
INCOME STATEMENT

HISTORICAL FORECASTED
Particulars in Millions 2021A 2022A 2023A 2024E 2025E 2026E 2027E 2028E

Revenues 100% 106% 114% 134% 156% 181% 211% 246%

Cost of revenues 100% 111% 114% 136% 157% 183% 213% 248%
Marketing 100% 99% 104% 125% 145% 169% 197% 229%
Technology and development 100% 119% 118% 140% 163% 189% 220% 257%
General and administrative 100% 116% 127% 147% 171% 199% 232% 270%
Operating income 100% 91% 112% 129% 149% 174% 202% 235%
Other income (expense):
Interest expense 100% 92% 91% -53% -9% 0% 0% 0%
Interest and other income (expense) 100% 82% -12% 0% 0% 0% 0% 0%
Income before income taxes 100% 90% 106% 143% 160% 184% 214% 250%
Provision for income taxes 100% 107% 110% 154% 171% 198% 230% 268%
Net income 100% 88% 106% 142% 158% 182% 212% 247%
 TREND ANALYSIS
BALANCE SHEET

HISTORICAL FORECASTED
Particulars in Millions 2021A 2022A 2023A 2024E 2025E 2026E 2027E 2028E

Assets:
Current assets:
Cash and cash equivalents 100% 138% 15% 94% 230% 375% 533%
Short-term investments 100% 2% 2% 2% 2% 2% 2%
Trade receivables 100% 130% 141% 164% 190% 222% 258%
Other current assets 100% 67% 67% 67% 67% 67% 67%
Total current assets 100% 107% 40% 86% 164% 248% 340%
Content assets, net 100% 97% 99% 106% 117% 132% 150%
Property and equipment, net 100% 107% 106% 105% 104% 102% 100%
Other non-current assets 100% 109% 109% 109% 109% 109% 109%
Total assets 100% 100% 89% 103% 125% 151% 181%
Liabilities and Share holder Equity:
Current liabilities:
Current content liabilities 100% 100% 58% 69% 81% 94% 109%
Accounts payable 100% 111% 125% 145% 168% 196% 228%
Accrued expenses and other liabilities 100% 119% 119% 119% 119% 119% 119%
Deferred revenue 100% 114% 114% 114% 114% 114% 114%
Short-term debt 0% 0% 0% 0% 0% 0% 0%
Total current liabilities 100% 112% 84% 92% 101% 110% 122%
Non-current content liabilities 100% 84% 101% 117% 136% 158% 185%
Long-term debt 100% 99% 20% 0% 0% 0% 0%
Other non-current liabilities 100% 104% 104% 104% 104% 104% 104%
Total liabilities 100% 101% 55% 49% 53% 58% 64%

Preferred stock 0% 0% 0% 0% 0% 0% 0%
Common stock 100% 111% 117% 122% 127% 131% 134%
Treasury stock at cost 100% 840% 840% 840% 840% 840% 840%
Accumulated other comprehensive loss 100% 103% 103% 103% 103% 103% 103%
Retained earnings 100% 131% 174% 221% 275% 338% 412%
Total stockholders’ equity 100% 99% 135% 175% 221% 275% 336%
Total liabilities and stockholders’ equity 100% 100% 89% 103% 125% 151% 181%