Netflix Financial Analysis Essay

To, Mr. Wilmot R. Hastings,
Chairman, President & Chief Executive Officer,
NETFLIX Inc.

This Report presents a complete analysis of the financial status of Netflix Inc. for the shareholders and other important institutions providing an in depth analysis of the business climate outlook as it might impact this company and its industry as well as the corporate analysis for the company. The financial health report, Stocks valuation report, Human Strategic Management analysis and past and future developments will help to understand the company thoroughly in order to take decisions regarding the stock developments . As the Business consultant for Netflix Inc., we provide major insights of the company and review the business completely for the investors to look upon. The financial data was gathered for the last 5 years, from 2009-2014,
from 10-k filings with the Securities and Exchange Commission (SEC) additional data. This analysis report does not undergo comparative analysis with competitors in the same sector of Internet Services, but only to the Industry average. This analysis will examine the financial data only through the interpretation from the financial Industry with the ratios and the effect of the result on the overall performance of the company.

Company Overview
Netflix, Inc. Founded in 1997 operates as an Internet subscription service company under consumer technology sector which provides subscription service, streaming movies and TV episodes over the Internet and sending DVDs by mail being one of the industry leader. The company advances to capture the forefront of this industry through expansion, acquisitions, licensing, growing content portfolio, and maintaining competitive pricing throughout by domestic segments, International Streaming and Domestic DVD. Netflix also assigns content from various studios along with other content providers through fixed-fee licenses, direct purchases and revenue sharing agreements. The company markets its service through various channels which includes online advertising and broad-based media through television, radio and as well as various partnerships. The company was founded by Marc Randolph and Wilmot Reed Hastings Jr., on August 29, 1997 and is headquartered in Los Gatos, CA. (edmunds, 2014) Most initial product offering by the company was a DVD rental service that allowed customers to retrieve DVDs online, once received through mail. Later in few years, Netflix expanded and diversified its product offering by providing the service of video streaming, featuring TV shows and movies with monthly subscription. By the end of the third quarter of 2007, the company boasted a collection of over 90,000 titles, and had almost 7 million subscribers. (Wrooney, 2011) While November 2010 marked with the video streaming service being separated from the DVD rental services with the monthly subscription pricing model and the continuous expansion of the company which eventually resulted in profitability. According to the Yahoo finance, it is currently selling at $427.84. Netflix has 48 million subscribers and it is available in 40 countries with a number of full time employees of 2,327.

Officers and Executives
Name
Age
Officer Since
Title
Mr. Wilmot Reed Hastings
54
1997
Chairman, President & Chief Executive Officer
Mr. David B. Wells
42
2004
Chief Financial Officer
Ms. Tawni Cranz
41
2007
Chief Talent Officer
Mr. William J. Holmes
-
2008
Chief Business Development Officer
Mr. Gregory K. Peters
-
-
Chief Streaming & Partnerships Officer
1
MISSION : "Our core strategy is to grow our streaming subscription business domestically and globally. We are continuously improving the customer experience, with a focus on expanding our streaming content, enhancing our user interface and extending our streaming service to even more Internet-connected devices, while staying within the parameters of our consolidated net income and operating segment contribution profit targets." (NETFLIX)

"In October, 2011, co-founder and CEO Reed Hastings expressed a clear vision for the future of Netflix:
Becoming the best global entertainment distribution service
Licensing entertainment content around the world
Creating markets that are accessible to film makers
Helping content creators around the world to find a global audience" (NFLXVISION)

HISTORY
YEAR
Developments
1997
Reed Hastings and Marc Randolph co-founded Netflix to offer online movie rentals
1999
Launched the subscription service, offering unlimited rentals for one low monthly subscription
2000
Launched the personalized movie recommendation system that use members’ ratings to accurately predict choices for all Netflix members
2002
Netflix 's initial public offering on Nasdaq under the ticker “NFLX” with 600,000 members in the US.
2005
The number of Netflix members rises to 4.2 million.
2007
Introduction of streaming, instant access to television shows and movies on personal computers
2008
Partnership with consumer electronics companies to stream on the Xbox 360, Blu-ray disc players and TV set-top boxes.
2009
Partnership with consumer electronics companies to stream on the PS3, Internet connected TVs and other Internet connected devices.
2010
Availability on the Apple products, the Nintendo Wii, and other Internet connected devices. Netflix launch its service in Canada.
2011
Launch at Latin America and the Caribbean.
2012
Available in Europe, United Kingdom, Ireland and in the Nordic Countries. Netflix wins its first Primetime Emmy Engineering Award.
2013
Expanded to the Netherlands.
2014
Launch in 6 new countries in Europe (Austria, Belgium, France, Germany, Luxembourg and Switzerland). Netflix wins 7 creative Emmy Awards for House of Cards and Orange is the New Black. Netflix now has over 50 million members globally

SWOT
Brand Recognition
Most significant (Strength)
Accessibility
Most significant (Strength) Original Content .
Most significant (Strength)
DVD Subscribers
Not Significant (Weakness)
Raising Subscription Prices .
Not Significant (Weakness)
International Expansion
Most Significant (Opportunity)
Original In-House Programming
Most significant (strength)
Word-of-Mouth Campaigns
Significant (opportunity)
ISPs
Significant (Strength in long term)
Competition (Amazon Prime, YouTube)
Significant (Threat)
Content Price
Good (Weakness)
Cost of Content
Not significant (Threat)
High profitability
Most Significant (Strength)
Strong Management Team
Most Significant (Strength)
Talented employees and excellent work culture
Most Significant (Strength)
Strengths
Netflix brand stands as a market leader for being very well known and has become a verb among many internet users today. One of the most significant fact is that, Netflix App has enabled their subscribers the ability to stream media on nearly all internet enabled devices making it user-friendly. Netflix also derives the Award winning original content for series House of Cards and Hemlock Grove and other critically acclaimed titles which is quite difficult to get on other sites. Its cost for mass licensing packages and the in house original content production has the company undertaking a large amount, eventually causing debt to incur. Netflix 's streaming operation ended the third quarter with 53.1 million members worldwide posing positive Growth to continue at a good pace going ahead as more customers opt for the convenience of consuming entertainment online and Netflix continues to expand internationally.
Weaknesses
But, prior to end of 2011, streaming and DVD-by-mail operations were combined and members could receive both offerings under one hybrid plan which later was separated to two individual plans. This has led to decrease in paid subscriptions for its original service from roughly 11.0 million at December, 2011 to about 5.9 million at September, 2014. The decline in membership is expected to continue going forward. Also its going through a difficult time raising subscription prices as last attempt to raise monthly subscription by Netflix made current subscribers upset and Netflix stocks tumbling down. In spite of strong growth in revenue, Netflix 's international operations remain in the negative side. Netflix experienced a contribution loss from the international streaming business in 2013 totaled to $274 million which again generated a contribution loss of $81 million in the first nine months of 2014 leaving Netflix expecting a loss of $95 million for the December period too. This contribution loss has been seen to decline up until the third quarter of 2014 with the growing number of paid members. However, the current European expansion have added new expenses for Netflix making it pay higher Value Added Tax during the January, 2015 in most of Europe due to changes in European law. The strategies that put efforts to continue its international expansion shall result in contribution losses but constrain overall profitability in the future. "Netflix is prioritizing long-term performance over short-run profits. This looks to be a sound strategy, but it does create added uncertainty in the near term." (stock reports)
Opportunities
Most of the opportunities lie in its strong ability to create original content that will help to enhance growth internationally. Netflix Inc., originally began its international streaming business in Canada in September of 2010 and recently expanded its overseas presence considerably through Latin American, Caribbean, and European markets. Recently the company’s streaming service was launched in Germany, Luxembourg, France, Switzerland, Austria and Belgium adding over 60 million broadband households which significantly increased the company’s European presence resulting in raise of international imminent market to over 180 million broadband households. Abundance of house-hold entertainment devices are connected to the internet incurring an opening for internet TV along with Netflix’s exclusive in-house content poising the company for that demand all over. Very recently Netflix is concentrating on expanding hugely into Australian and New Zealand markets.
These is a decrease in marketing expenses due to word-of-mouth campaigns based on original content. Reports display Netflix accounting for about 30% of internet traffic daily. Netflix has been distributing a number of exclusive programs including the original series such as Lily hammer, House of Cards, and Orange is the New Black along with continuations of previously cancelled series from cable channels, such as Arrested Development, The Killing, and Longmire. Also, Netflix distributes a maximum of stand-up comedy series and documentary films and holds a healthy slate of upcoming titles scheduled for release as upcoming.
Threats
Due to net neutrality laws striking low, Netflix would assume more debt or cut down the content. Increase in competition poses as the most formidable threat the company faces. This is due to the market which is susceptible to rapid technology changes in online entertainment with fewer barriers to entry in the streaming business leading to greater competition from adversaries. Amazon Prime and YouTube have become direct competitor to Netflix by announcing their own original content productions. The largest threat remains to be the price of licensing and renewing those license agreements to the company’s ability to operate at a profit. "Cable channel HBO has announced its HBOGO will be made available without a television subscription in 2015. Its large catalogue of original titles ought to be tough competition for Netflix’s own streaming offerings. CBS network has also announced a subscription streaming service. We expect competition will continue to increase in the coming years." (stock reports).
Recommendations:
Currently as per analysis the immediate threat to the company is Financing and licensing to operate on the short-term. Recommended is consideration of management to introduce a conditional price increase that would supplement some of these costs by implementing limited advertising between programs. One of the most noteworthy investment has been the in-house original that has benefited the company by generating a word-of-mouth campaign and proving that the company can be an award winning content producer always.
CORPORATE GOVERNANCE

"The Company 's Lead Independent Director is responsible for:
Coordinating the activities of the independent directors, and is authorized to call meetings of the independent directors;
Coordinating with the Chief Executive Officer and Corporate Secretary to set the agenda for Board meetings, soliciting and taking into account suggestions from other members of the Board;
Chairing executive sessions of the independent directors; providing feedback and perspective to the Chief Executive Officer about discussions among the independent directors; and helping facilitate communication between the Chief Executive Officer and the independent directors;
Presiding at Board meetings where the Chair is not present; and,
Performing other duties assigned from time to time by the Board" (NFLXCG)

Current CSR strategy
Code of ethics
Insider trading policy
Audit committee charter
Compensation Committee Charter
Nominating and governance committee Charter
5 of 7 directors in the board are independent
360 reviews rather than performance reviews
Focuses on communication and honesty
High level of transparency
SEC filings
Stock information
Financial statements
Financial releases

CORPORATE SOCIAL ISSUES

Net neutrality and bandwidth caps: - it holds public policies prevalent for the whole society whilst promoting innovative techniques. It also involves in utilizing the corporate power in a non abusive way. Neutrality caused Netflix to account to 34.2% of downstream usage the last month due to which the ISP’s are hesitant to invest further in network expansion.
Technology : - this is one area where Netflix has to be one step ahead to the consumers, as newer technology that makes entertainment as mobile as possible, keeping up with the advancements in technology is very important. Being advanced boosts the competitive advantage.
Data and privacy: - currently as much as 53.1 million subscribers’ financial data is with Netflix in their servers. Currently there is a deficit of a Chief information officer. Although the job can be given to an outsourced entity who has more experience handling confidential information from being stolen, there is a risk of increasing the number of people who can access Netflix’s server network. It so happened that in 2006 once a video-algorithm used to analyze the customer’s ratings provided anonymous data to customers and the data could be used to identify customers.
Intellectual property: - all the content that’s steamed online is a product of Netflix and the viewers are bound to respect the copyrights and stay updated. Netflix does not share any kind of data from other sources as it sticks to its own product.
Marketing : - marketing is one of the most important criteria as it is what that reaches the customers eye. They have to be notified about any technological advancement in Netflix’s products or the type of services. There have been issues in the past where a customer had filed a case in September 2004 where his service was slowed down and the “unlimited rentals” along with “one day delivery” weren’t as fast as they were meant to be. Netflix was willingly slowing down the service for high usage customers.
Netflix - Company Culture
Netflix is renounced for having an employee-oriented culture which includes unlimited vacation time for salaried workers and allowing employees to take any amount of their paychecks in stock options where the teamwork is highly valued in the with team members even contributing to provide peer employee reviews with professionalism.
Jobs at Netflix
Netflix hires for their corporate headquarters in Los Altos, CA and as well as their offices in Beverly Hills, CA along with Hillsboro, OR in operations facilities throughout the United States. Job profiles they look for are :
Software Engineer
IT Operations
Database Administrator – Oracle Database
System Administrator
Senior QA Engineer
Electronic Delivery Operations
Database Architect
Compensation and Benefits
Netflix encompasses a great entrepreneurial spirit which is viewed by many as a benefits or perks for working at Netflix. From the Netflix corporate website, the following are “8 Great Reasons to Work at Netflix”
Netflix delights
Connecting people with movies they’ll love is why Netflix exists.
We 're democratizing movie distribution
We pay well
Our values are real
Rules annoy us
Our consistently outstanding people
We love movies
Our amazing future
Netflix delights Netflix is ranked #1 in customer satisfaction across all of ecommerce and above other great companies such as Apple and Amazon in independent studies not commissioned by Netflix.
Reports has shown when someone wears Netflix clothing in public, it 's not unusual for strangers to have you approach with the statement "I love Netflix!"” Netflix is passionate about helping connect people to great movies. Netflix also helps to promote the small films widely.
"Our promise to filmmakers is simple: make a film that our customers love, and we will feature it as aggressively as the biggest Hollywood hit."
It believes that one outstanding employee does more and costs less than two adequate performers thus confining to talent with high pays. Their compensations and benefits are guided by market rates and performance rather than seniority or resume. Also, Netflix offers investment vehicles such as fully vested stock options granted every month where the employee stock purchase program along with a company matched 401K program to allow employees to make decisions specific to each individual 's financial plans ahead in life.

"At Netflix we value – and reward – the following nine behaviors. The more these sound like you, the more likely you will thrive at Netflix.
Judgment, Productivity, Creativity, Intelligence, Honesty, Communication,
Selflessness, Reliability, Passion." Every year, the company conducts a 360 degree review during which they give feedback and receive feedback from employees within the workforce.
They believe in faster innovation with faster growth. The work culture provides employees great freedom and they believe if employees demonstrate great responsibility, they accomplish amazing things. They believe in a high-performance. "In our view, the benefit of a high-performance culture is that you work with consistently outstanding colleagues which is exhilarating. You do your best work, you learn the most, and you achieve a high level of professional satisfaction, when you are surrounded by excellence." (review)
"Our goal is to expand to over 20 million subscribers in the near future and along the way provide our customers the additional option of Internet movie delivery." (review)
"A final note about the connection between corporate success and respect. A great company earns, and is able to maintain, the respect of its customers, suppliers, investors and employees in large part to delivering on promises made. A great company, and a great brand, is essentially that promise fulfilled. 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. Delivering on these promises is our quest." (NETFLIX)
STOCK OWNERSHIP

Clearly, The stocks of Netflix are held by various institutions and the shares are not concentrated with one institution, rather is diverse. This would lead to equal stance in voting as well as decision- making when stakeholders are considered for the further decisions of the company 's future. The highest number of shares is owned by Capital Research Global investors.

CORPORATE HEALTH
To analyze the corporate health of Netflix Inc., We would go through different kind of Financial ratios, and figures in comparison with the Industry average.
Liquidity Ratios : A company 's ability to turn short-term assets into cash to cover debts is of the utmost importance when creditors are seeking payment. Bankruptcy analysts and mortgage originators frequently use the liquidity ratios to determine whether a company will be able to continue as a going concern.
Industry Average= 1.10
The Current Ratio of Netflix determines the ability to pay off its short-term liabilities with its current assets. We mark current ratio to be high in 2010, while dropping down in 2011 and further in 2012. Further the current ratio improves slowly with the years. Since the past 5 Years shows a trend of Current Ratio being more than 1, it denotes that the company has enough current assets to pay off its short term debts. Through the balance sheet we see an increasing trend of both Current assets as well as Current liabilities. This is merely due to the International expansion of Netflix, which holds long term gains. Also Netflix is performing better than the Industry average of 1.10. Industry average = 0.80
The Quick Ratio of Netflix determines the ability to pay its current liabilities when they come due with only quick assets, which can be converted into cash within 90days. The trend of quick Ratio is again follows the same as the current ratio. A sharp decline from 2010 to 2013, and then slow growth in later years. Netflix uses its long-term assets to generate revenues, therefore selling them would bring in huge losses. Since the ratios are lesser than 1, The quick assets are not substantial enough to meet the requirement to pay off current liabilities. Also the Industry average is higher than Netflix 's quick ratio, at 0.80 requiring the company to improve. The Financial leverage of Netflix Inc., determines the amount of capital that is generated through debt and assesses the company 's ability to meet the financial obligations. We see very high leverage ratios denoting the company 's aggressiveness towards financing its growth through debt. But these ratios also show a decline from 2012, indicating returns on the investments. These ratios are sometimes called equity multipliers too. The leverage ratio is high for Netflix due to its vigorous investments in international platform, which yearns for long term capital returns.

The Cash ratio in Netflix determines the ability to pay off its current liabilities with cash and cash equivalents only.
We see a rapid decline in this ratio since 2011 to 2013, determining lot of investment activities. But 2014 brought in more liquid cash as returns and is expected to keep increasing. This shows Netflix 's ability to be Financially productive . Industryaverage=252.54%
This ratio analysis what portion of its debt or equity is Netflix Inc., using to finance its activities. 0.81 in 2010 shows a high debt/equity ratio indicating the company 's aggressiveness to finance through debt. But in later years, the value of ratio reduces, determining that Netflix has been able to finance through equity and other sources lately keeping the financial status of the company firm and showing no signs towards bankruptcy or losses. The company must have a low Debt/Equity ratio, which indicates a strong balance sheet. The Debt/Equity ratio should not be greater than 20% or should be less than the average Debt/Equity for its industry whish is 252.54%. NFLX 's Total Debt/Equity of 48.45% is considered acceptable
.

Cash flow from operations ratio: This ratio measures the capability of Netflix to how well its current liabilities are covered by the cash flow generated from a company 's operations. We see a negating operating cash flow in 2010, followed by a positive growth. 2013 marked to be a huge growth in operating cash flows with almost 330% of positive growth where as a sudden fall to -83.15% in 2014. This was seen due to major investments in 2013 which used this cash flows from operations.
Receivables turnover : Netflix 's determines through this ratio the quantify of effectiveness in extending credit as well as collecting debts. Netflix, Inc. Receivable turnover ratio sequentially improved to 6.26, above company average by 2014.
Industry Average= 18.0
Inventory Turnover Ratio: This ratio depicts how fast Netflix turns over its inventory in an year. A higher inventory turnover means the company has light inventory. Therefore the company spends less money on storage, write downs, and obsolete inventory. If the inventory is too light, it may affect sales because the company may not have enough to meet demand. Netflix 's inventory turnover rate determines that the company is able to fulfill its demands, and there are higher sales. In comparison to the Industry, there are 58 more companies which have better turnover than Netflix but the Industry as a whole is not as good as Netflix.
PROFITABILITY RATIOS:
"A class of financial metrics that are used to assess a business 's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time. For most of these ratios, having a higher value relative to a competitor 's ratio or the same ratio from a previous period is indicative that the company is doing well." (investopedia). It determines the overall efficiency and performance of the company. Industry average : 58.0
The Gross Margin of Netflix depicts how well it controls the cost of its inventory and the manufacturing of its products and subsequently passes on the costs to its customers. We see in the given chart above, the Gross Margin is not very high percent but subsequently has been decreasing till 2012, and then slow growth is perceived. Netflix has managed to improve its Revenue sequentially to $1,485 millions by 5.34 % faster than Gross Profit increase of 3.38 % to $470millions, this led to contraction in Gross Margin to 31.83 %, which is below company average. Netflix Inc gross margin has been in long term decline. The average rate of decline per year is -4.5%.
Industry Average= 18.92%
Operating Profit Margin : This profit percent measures overall operating efficiency, incorporating all of the expenses of ordinary, daily business activity of Netflix. We see a decline in operating profit margin from 2010-2012 and then inclining growth towards 2014. But the company 's operating margin is way below than the industry average and need to encompass strategies to gain better profits in future.
Industry average= 29.68
EBITDA margin : This figures of Netflix measures a company’s profitability before deductions that are often considered irrelevant in the decision making process. It determines how much profitable a company is before paying interest to creditors, taxes to the government, and taking paper expenses like depreciation and amortization, determining a fall from 2010 to 2012, and eventually growing back higher slowly in Netflix. Netflix falls below the industry average due to its long term investments and slower returns currently.
Industry average= 17.65%
Net margin is calculated as net income divided by its revenue. Netflix Inc 's net income for the three months ended in Dec. 2014 was $83 Mil. Netflix Inc 's revenue for the three months ended in Dec. 2014 was $1,485 Mil. Therefore, Netflix Inc 's net margin for the quarter that ended in Dec. 2014 was 4.85% which is much lower than the industry average of 17.65% making it unreliable. But when closely analyzed, Netflix has been improving in its income and expects to improve more by next 2 years.
Industry average=9.86%
The Return on Assets ratio is an important profitability ratio because it measures the efficiency of Netflix, with which it 's managing its investment in assets and using them to generate profit.
We see high Return on assets in the year 2010 which eventually falls down by 2012 due to aggressive pricing of content. Eventually after 2012, it started increasing in a very slow pace. Netflix has comparatively lower ROA than the industry average which doesn 't hold to be good. Though ROA has always been a topic of argument, A higher return might judge the company very vulnerable too.
Industry average= 35.6%
The Return on Equity percentage measures a firm 's efficiency at generating profits from every unit of shareholders ' equity Netflix Inc 's annualized net income for the quarter that ended in Dec. 2014 was $333 Mil. Netflix Inc 's average shareholder equity for the quarter that ended in Dec. 2014 was $1,791 Mil. Therefore, Netflix Inc 's annualized return on equity (ROE) for the quarter that ended in Dec. 2014 was 18.62% with an annual ROE of 16.72%. Even though the returns are high, they are far below the industry average, showing the risks of major competition to Netflix.

Return on Invested Capital is used to assess a company 's efficiency at allocating the capital under its control to profitable investments. The return on invested capital measure gives a sense of how well a company is using its money to generate returns. Comparing a company 's return on capital (ROIC) with its cost of capital (WACC) reveals whether invested capital was used effectively. (investopedia). The ROIC % in Netflix was quite high during 2010-11 but fell drastically from 2012 and had confined growth since then. This is due to the aggressive developments Netflix took over from 2012 to till date. Netflix Inc generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases. Also WACC for Netflix is 14.22% which indicates an effective use of invested capital.
VALUATION RATIOS :
"A valuation ratio is a measure of how cheap or expensive a security (or business) is, compared to some measure of profit or value. A valuation ratio is calculated by dividing a measure of price by a measure of value, or vice-versa." (val)
Industry average=9.2
Asset Turnover measures how quickly a company turns over its asset through sales. It is calculated as Revenue divided by Average Total Assets. Netflix Inc 's Revenue for the three months ended in Dec. 2014 was $1,485 Mil. Netflix Inc 's Average Total Assets for the quarter that ended in Dec. 2014 was $6,917 Mil. Therefore, Netflix Inc 's asset turnover for the quarter that ended in Dec. 2014 was0.22. Asset Turnover is linked to Return on Equity (ROE) through Du Pont Formula. Netflix Inc 's annualized Return on Equity (ROE) for the quarter that ended in Dec. 2014 was18.62%. It is also linked to Return on Assets (ROA) through Du Pont Formula. Netflix Inc 's annualized Return on Assets (ROA) for the quarter that ended in Dec. 2014 was 4.82% .
Industry average=22.6
"As of today, Netflix Inc 's share price is $416.69. Netflix Inc 's diluted earnings per share for the trailing twelve months (TTM) ended in Dec. 2014 was $4.32. Therefore, Netflix Inc 's P/E ratio for today is 96.48. During the past 13 years, Netflix Inc 's highest P/E Ratio was 2387.86. The lowest was 14.52. And the median was41.43. Netflix Inc 's diluted earnings per share (Diluted EPS) for the three months ended in Dec. 2014 was $1.35. Its diluted earnings per share (Diluted EPS) for the trailing twelve months (TTM) ended in Dec. 2014 was $4.32. As of today, Netflix Inc 's share price is $416.69. Netflix Inc 's earnings per share without non-recurring items for the trailing twelve months (TTM) ended in Dec. 2014 was$4.32. Therefore, Netflix Inc 's P/E (NRI) ratio for today is96.46. During the past 13 years, Netflix Inc 's highest P/E (NRI) Ratio was 3343.00. The lowest was 14.48. And the median was 41.49." (htt2) The positive growth in the price to earnings ratio increases the value of the company. Also, Netflix has higher P/E ratio in compared to the industry average which equals to 22.6

The above two graphs indicates the Earning Per share for Netflix for last 5years. There has been remarkably a negative growth in the 5year trend, where as a very minute growth from 2012-2014. EPS is much lower in comparison to the Industry average which is 19.2% indicating lower profitability of the stocks for Netflix.
Beta value of stocks : The Beta value of stocks is currently 0.96 whereas the industry average is around 0.67 indicating a higher volatility of stocks. This measures the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM), a model that calculates the expected return of an asset based on its beta and expected market returns.
Debt-Equity Ratio

The graph shows that the company has raised lots of its capital from debt and slowly started reducing the debt amount and sold its equity to raise the capital with its reputation and again from 2013 it started raising the capital from the market.

Initially in 2010 the company was very strong in meeting its interest cost of the capital with its earnings but 2012 was a very slow year for the company and from 2103 it is showing positive signs of recovery in meeting its own interest costs inventory turnover

Initially the company showed huge inventory turnover but it has slowly stabilized from 2011 and from 2012 it has a stable inventory turnover ratio indicating positive signs of efficiency development within the management.

R-squared value for Netflix
R-squared measures the relationship between a portfolio and its benchmark. It can be thought of as a percentage from 1 to 100.
R-squared is not a measure of the performance of a portfolio. A great portfolio can have a very low R-squared. It is simply a measure of the correlation of the portfolio 's returns to the benchmark 's returns. We have R^2 value for Netflix equal to 0.9167 which is 91%. This determines a strong correlation between the portfolio 's returns and the bench mark returns.
Netflix Inc (NAS:NFLX): Weighted Average Cost Of Capital (WACC)
13.36% (As of Today)
As of today, Netflix Inc 's weighted average cost Of capital is 13.36%. Netflix Inc 's return on invested capital is38.03%. Netflix Inc generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases. (htt3)

Capital Structure
Most Recent (Dec 2014) sept2014 Historical

Type
%
Amount

Debt
38.5
402.3 Mil

Preferred
---
---

Equity
61.5
642.8 Mil

Dec 2013 Dec 2011

Type
%
Amount

Debt
32.6
900.0 Mil

Preferred
---
---

Equity
67.4
1.9 Bil

EFN ANALYSIS
Your company name: NETFLIX,INC
Your company ticker symbol: NFLX
Sales net current year:
5.5B
Sales one year back:
4.37B
Sales two years back:
3.61B
Sales three years back:
3.2B
Sales four years back:
2.16B
Sales five years back:
1.6B
Sales six years back:
1.3B
Sales seven years back:
1.2B
Sales eight years back:
0.997B
Sales nine years back:
0.682B
Calculated growth rate:
-17.13%
Total assets:
7.06B
Current year sales:
6.827B
Accounts payable:
201.58M
Accruals:
-
Sum of AP and accruals:
201.58M
Profit margin:
4.8%
Retained earnings retention ratio:
-
EFN for 100% capacity:
-0.03
EFN for 70% capacity:
-3.4
Internal growth rate for your company:
0.11
Sustainable growth rate for your company:
18.62

The above data shows positive growth as an estimation towards 2015-16. Since there are no dividend payouts, it reduces the EFN value at 100%. The company stocks are strong buy by analysts as it projects positive and growing growth..

The above graph shows the growth in balance sheet determining the book value per share and cash flow per share from 2009 to 2019. The book value per share has been increasingly high and is still expected to grow till 2019, where as the cash flow per share has been very low and fluctuating determining low returns. The earning per share value 's surprise has been comparatively high since 2009 to 2014, with the actual share earning higher than the estimated. This determines that the shares have been doing above expectations with quite a lot of fluctuations.

The financial leverage graph determines higher sales than the debt or finance, but lower returns before tax and depreciation. This means the profits has been low, and Netflix needs to currently expand strategically to gain higher returns. This graph denotes the net sales surprise. There have been slightly higher sales than the estimated since 2011 due to growing demand in the market and expansion to overseas . The DVD Program has got Netflix a higher demand for quality and originality. This graph denotes The income growth of Netflix. The green line shows the net income which drastically fell down in 2012 due to higher investments , and then steadily has been increasing. It is estimated to increase further with higher operating profits by 2019.
The above graph shows 6 companies under the Internet service sector compared on basis of growth in revenue, profitability, capitalization, finances, valuations and PER. These companies are namely Netflix, Naspers LTD, Zillow group Inc, IAC, ADR and Qunar Cayman Islands Ltd. It can be clearly distinguished that Netflix is doing quite well than the other companies in the same sector.

Other indicators
FACTORS
%/RATIOS/FIGURES(2015)
INTERPRETATION
Altman Z-Score

4.26
When Z-Score is greater than 2.99, it is in Safe Zones.

Beneish M-Score

-2.15
An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
E10
2.68
10YR valuation of overall market through inflation growth.
Financial strength rank
6
The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

EV
19,932
GOOD
PROFITABILITY RANK
7
The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Piotroski F-Score
5
Financial situation is stable.

NET INCOME:
Netflix Inc Annual Data

Dec05
Dec06
Dec07
Dec08
Dec09
Dec10
Dec11
Dec12
Dec13
Dec14
Net Income

49
67
83
116
161
226
17
112
267

We see a steady growth in Net income of Netflix which determines its internal growth and development and higher profits or returns on investments.
Dividends:
Netflix doesnot have dividend pay outs. Therefore, the NPVGO model for Netflix doesnot hold good here. The current EV value of the company is $27.99 Billion with the value of EBITDA from the income statement as $456.68Million and the value of EV to EBITDA as 61.381, comparatively higher than the industry average of 55.51.
DCF Forecasting and Valuation (Kelly, 2014)
A discounted cash flow (DCF) valuation is conducted to determine the value of Netflix. Discussion of Assumptions for all the assumptions made during the forecast period and the forecasted financial statements respectively. We explain a few assumptions below.
Revenue Growth – Assumptions about growth rate in revenues are critical for Netflix, which is a growing company. For the years 2010E to 2015E, the expected growth rates according to our assumptions are 29%, 29%, 17%, 10%, 8% and 6% The 29% rates for 2010 and 2011 are partially based on the three-year historic growth in revenues of 28% which is adjusted to incorporate the current popularity of streaming, newly launched Canadian service, and a moderate growth for DVD shipments. After 2011, we project the revenue growth to gradually decrease to 6% in 2015 which is the estimated terminal growth rate. This reduction is attributed to the increase in competition due to low barriers of entry, sharp declines in DVD rentals, and saturation of the streaming market. Growth Rates for Costs - Our assumption of their cost profile is high in the short run due to their current and potential expansion and the related marketing expenses as well as the rapid increase in the content acquisition cost. The cost of revenues as a percent of revenues is forecasted as 62%, 65%, 65%, 63%, 60%, and 60% for the years 2010 to 2015). We forecast that their cost profile will improve in the long run due to the anticipated reduction in labor, postage, and warehousing costs with respect to DVD fulfillment and lower content acquisition expenses in comparison to the early years.
Growth Rates for Cash - We assess the decline trend in cash as % of revenues. This declined to 8.0% in 2009 from 10.3% in 2008 and 14.7% in 2007. We think that their cash amount in relation to revenues will stay the same as the current level of 8% because the company is currently aggressive about stock buyback with the newest amount approved by Netflix’s board being $300 million of potential stock repurchase until 2012 (Quarterly Earnings Report, 2010).
Based on our forecasted financial statements, I discounted these free cash flows by the WACC 8.92%. We added back the value of non-operating assets and subtracted debt that consisted of long-term debt, both operating and financing lease obligations and other liabilities. Thus, we computed the intrinsic value of equity as $10.20 billion. Using the 58.4 million shares outstanding, we determined Netflix’s value per share as $174.65

Summarized
Netflix is a global Internet TV network offering movies and TV series commercial-free, with unlimited viewing on any Internet-connected screen for an affordable no-commitment monthly fee. They have many competitors like Sky, Amazon, Apple, Microsoft, Sony, or Google paying huge taxes unlike Netflix, there will surely evolve a system in the coming future where Netflix will get to pay taxes on entertainment and other usage charges. The new innovative company is innovatively bypassing many taxes with its new portfolio of products using the tax loopholes which will become more stringent and eventually the after tax earnings will be affected by this .
Interest rates in the markets are rising as the economic slump period is over and many small startups have boosted their performance and actively seeking loans the market seems to be perfect for investing , so it is easy for Netflix to borrow money but the capital cost might go up when compared to the previous balance sheets. Unemployment levels would affect Netflix as the number or users will drop down due to no money. Since Netflix works on Internet services sector, It doesn 't see a downward slope of business due to economy boom or downfall. It merely is technologies which is making people rely on it more day by day giving a sharp growing edge to the business.
Netflix Inc has few patents too ,
7,848,968 Processing returned rental items
7,631,323 Method of sharing an item rental account
7,617,127 Approach for estimating user ratings of items
7,568,613 Mailer envelope with inventory control window
7,546,252 Approach for managing rental items across a plurality of distribution locations
7,403,910 Approach for estimating user ratings of items
7,401,727 Mailing and response envelope and method of making the same
7,024,381 Approach for renting items to customers
6,966,484 Mailing and response envelope
The financial ratios of the company are strong and robust indicating the company’s strong financial future. The trends have been seen improving at all levels for Netflix. The company has an innovative model of revenue generation and it doesn’t act like a traditional company generating its revenue from adds based programs its model can be slightly modified and bit focused on the revenue generation for pushing the profit margin a bit. From a fundamental viewpoint, the company shows impressive sales growth contrasted with poor business predictability. In fact, the launch of its European operations suggests an increase of revenue in the coming years but analysts have difficulties to estimates how the European market will respond to Netflix arrival. Moreover, the company seems overvalued with a P/E ratio of 65.8 for 2015 estimates. Finally, the consensus is mixed and the share offers no potential of progression. Furthermore, the investor is exposed to less risk of "accounting gimmickry", and companies of this size have more staying power. NFLX has a market cap of $25,565 million, therefore failing.
Technically, the security could run out of steam close to the USD 455 resistance. Indeed, the stock is moving in an upward trend in the short term but it could know a halt. In this context, the downward movement could improve and it should expect a return to USD 402.4. Indicators that show an overbought situation confirm this scenario.
The company in question should have a yield that is high and that can be maintained or increased. NFLX 's current yield is not available (or one is not paid) at the present time, while the market yield is 2.54%. Hence, this criterion cannot be evaluated.
Due to the technical configuration and a bad fundamental situation that does not justify the current valuation of the group, investors can open a short position close to the USD 455 resistance. The price target is set at USD 402.4 and a stop loss will be placed above USD 472.5.
"Slowing domestic growth was the first -- and most consequential way -- in which Netflix disappointed investors. In July, Netflix projected that it would add 1.33 million members in the U.S. during Q3. However, Netflix only managed to add 0.98 million domestic subscribers.
Netflix 's management tried to downplay this missed forecast. For the past few quarters, Netflix has provided its internal forecast for various metrics including subscriber growth. It had warned investors that sometimes it would beat this forecast and sometimes it would fall short. However, this was the first time it fell short by more than 1% on any metric. Apparently, Netflix 's forecasts aren 't as conservative as many investors had believed.
A bigger warning sign was the fact that domestic growth was much slower than in Q3 2013, when Netflix added 1.29 million domestic streaming subscribers. This is the second straight quarter with lower domestic subscriber growth year-over-year. However, while the Q2 shortfall could be explained by seasonality, that can 't explain what happened last quarter.
Netflix executives attributed the weaker Q3 growth to the impact of a $1 price increase applied to new subscribers back in May, stating "Slightly higher prices result in slightly less growth." Netflix is also projecting slower domestic growth for Q4, with 1.85 million subscriber additions, down from 2.33 million in Q4 2013.
For the full year, Netflix now expects to add approximately 5.65 million domestic streaming subscribers. That 's down 10% from the 6.27 million added in 2013.
This indicates that saturation may be setting in, leading to progressively slower growth in each of the next few years. It 's too early to be sure that this is the case, as subscriber growth has only been slowing for 2 quarters now. Nevertheless, Netflix investors now need to take this threat seriously."

(http://www.fool.com/investing/general/2014/10/21/4-ways-that-netflix-inc-disappointed-investors-las.aspx)

I don 't have any personal experience of working at this company. But as per my analysis of the company, I would definitely diversify my knowledge to work with Netflix at their customer-oriented work ethics. Netflix Inc shows high potential towards growth in the upcoming future and I would definitely like to see it growing rapidly with new technologies.
BALANCE SHEET

Assets
Column1
Column2
Column3
Column4
Column5
Column6
Column7
Fiscal year is January-December. All values USD millions.
2010
2011
2012
2013
2014
5-year trend Cash & Short Term Investments
350.39M
798.81M
748.08M
1.2B
1.61B
Increasing Cash Only
194.5M
389.95M
290.29M
604.97M
1.11B

Short-Term Investments
155.89M
408.86M
457.79M
595.44M
494.89M

Cash & Short Term Investments Growth
-
127.98%
-6.35%
60.47%
34.00%
Decreasing Cash & ST Investments / Total Assets
35.68%
26.03%
18.85%
22.18%
22.79%
Decreasing
SHORT TERM INVESTMENTS Total Accounts Receivable
0
0
0
0
0

Accounts Receivables, Net
-
-
-
-
-

Accounts Receivables, Gross
-
-
-
-
-

Bad Debt/Doubtful Accounts
-
-
-
-
-

Other Receivables
-
-
-
-
-

Inventories
0
0
0
0
-

Finished Goods
0
0
0
0
0

Work in Progress
0
0
0
0
0

Raw Materials
0
0
0
0
0

Progress Payments & Other
0
0
0
0
0

Other Current Assets
290.58M
1.03B
1.49B
1.86B
2.33B

Miscellaneous Current Assets
228.36M
976.04M
1.43B
1.86B
2.33B

Total Current Assets
640.97M
1.83B
2.24B
3.06B
3.94B
Increasing

2010
2011
2012
2013
2014
5-year trend Net Property, Plant & Equipment
128.57M
136.35M
131.68M
133.61M
149.88M

Property, Plant & Equipment - Gross
265.15M
306.04M
336.04M
357.2M
414.69M

Buildings
40.68M
40.68M
40.68M
40.68M
40.68M

Land & Improvements
-
-
-
-
-

Computer Software and Equipment
87.25M
102.45M
123.27M
139.31M
189.27M

Other Property, Plant & Equipment
47.97M
61.78M
63.6M
72.21M
83.1M

Accumulated Depreciation
136.58M
169.69M
204.36M
223.59M
264.82M

Total Investments and Advances
4.56M
3.5M
4.8M
5.2M
-

Other Long-Term Investments
4.56M
3.5M
4.8M
5.2M
-

Long-Term Note Receivable
0
0
0
0
0

Intangible Assets
182.56M
1.05B
1.51B
2.09B
2.77B

Net Goodwill
-
-
-
-
0

Net Other Intangibles
-
-
-
-
2.77B

Other Assets
7.94M
23.25M
27.71M
54.82M
86.08M

Tangible Other Assets
2.46M
23.25M
27.71M
54.82M
86.08M

Total Assets
982.07M
3.07B
3.97B
5.41B
7.06B
Increasing Assets - Total - Growth
-
212.52%
29.28%
36.41%
30.38%
Decreasing
INTERNAL GROWTH RATE
Liabilities & Shareholders ' Equity

2010
2011
2012
2013
2014
5-year trend ST Debt & Current Portion LT Debt
2.08M
2.32M
1.2M
1.1M
1.2M

Short Term Debt
0
0
0
0
0

Current Portion of Long Term Debt
2.08M
2.32M
1.2M
1.1M
1.2M

Accounts Payable
222.82M
1.01B
86.47M
108.44M
201.58M

Accounts Payable Growth
-
354.42%
-91.46%
25.40%
85.90%

Income Tax Payable
-
-
-
-
-

Other Current Liabilities
163.67M
210.17M
1.59B
2.04B
2.46B

Dividends Payable
-
-
-
-
-

Accrued Payroll
8.52M
17.76M
-
-
-

Miscellaneous Current Liabilities
155.15M
192.41M
1.59B
2.04B
2.46B

Total Current Liabilities
388.58M
1.23B
1.68B
2.15B
2.66B
Increasing Long-Term Debt
234.12M
231.8M
230.6M
529.5M
928.4M

Long-Term Debt excl. Capitalized Leases
200M
200M
200M
500M
900M

Non-Convertible Debt
200M
200M
200M
500M
900M

Convertible Debt
0
0
0
0
0

Capitalized Lease Obligations
34.12M
31.8M
30.6M
29.5M
28.4M

Provision for Risks & Charges
-
-
-
68.2M
34.81M

Deferred Taxes
(17.47M)
(28.3M)
(56.9M)
(69.1M)
(106.9M)

Deferred Taxes - Credit
-
-
-
-
-

Deferred Taxes - Debit
17.47M
28.3M
56.9M
69.1M
106.9M

Other Liabilities
69.2M
969.53M
1.32B
1.33B
1.57B

Other Liabilities (excl. Deferred Income)
69.2M
969.53M
1.32B
1.33B
1.57B

Deferred Income
0
-
-
0
0

Total Liabilities
691.9M
2.43B
3.22B
4.08B
5.2B
Increasing Non-Equity Reserves
0
0
0
0
0

Total Liabilities / Total Assets
70.45%
79.06%
81.23%
75.36%
73.67%
QUITE CONSTANT
DEBT RATIO
Preferred Stock (Carrying Value)
0
0
0
0
0

Redeemable Preferred Stock
0
0
0
0
0

Non-Redeemable Preferred Stock
0
0
0
0
0

Common Equity (Total)
290.16M
642.81M
744.67M
1.33B
1.86B
Increasing Common Stock Par/Carry Value
53,000
55,000
56,000
60,000
60,000

Retained Earnings
237.74M
422.93M
440.08M
552.49M
819.28M

ESOP Debt Guarantee
0
0
0
0
0

Cumulative Translation Adjustment/Unrealized For. Exch. Gain
-
-
-
-
(4.62M)

Unrealized Gain/Loss Marketable Securities
750,000
706,000
0
3.58M
169,000

Revaluation Reserves
0
0
0
0
0

Treasury Stock
0
0
0
0
0

Common Equity / Total Assets
29.55%
20.94%
18.77%
24.64%
26.33%
Increasing
TCE Ratio Total Shareholders ' Equity
290.16M
642.81M
744.67M
1.33B
1.86B
Increasing Total Shareholders ' Equity / Total Assets
29.55%
20.94%
18.77%
24.64%
26.33%
Increasing equity multiplier ratio
Accumulated Minority Interest
0
0
0
0
0

Total Equity
290.16M
642.81M
744.67M
1.33B
1.86B

Liabilities & Shareholders ' Equity
982.07M
3.07B
3.97B
5.41B
7.06B
Increasing

INCOME STATEMENT

Fiscal year is January-December. All values USD millions.
2010
2011
2012
2013
2014
5-year trend Sales/Revenue
2.16B
3.2B
3.61B
4.37B
5.5B

Sales Growth
-
48.18%
12.63%
21.20%
25.83%

Cost of Goods Sold (COGS) incl. D&A
1.36B
2.04B
2.63B
3.08B
3.75B

COGS excluding D&A
1.02B
1.2B
923.78M
841.58M
970.96M

Depreciation & Amortization Expense
338.7M
839.62M
1.7B
2.24B
2.78B

Depreciation
-
-
-
-
-

Amortization of Intangibles
-
-
-
-
-

COGS Growth
-
50.29%
28.73%
17.42%
21.71%

Gross Income
805.27M
1.16B
983.42M
1.29B
1.75B

Gross Income Growth
-
44.63%
-15.56%
31.31%
35.67%

Gross Profit Margin
-
-
-
-
31.83%

2010
2011
2012
2013
2014
5-year trend SG&A Expense
527.72M
779.61M
933.42M
1.06B
1.35B

Research & Development
163.33M
259.03M
329.01M
378.77M
472.32M

Other SG&A
364.39M
520.58M
604.42M
684.19M
876.93M

SGA Growth
-
47.73%
19.73%
13.88%
26.93%

Other Operating Expense
0
0
0
0
0

Unusual Expense
0
9M
0
25.13M
0

EBIT after Unusual Expense
0
(9M)
0
(25.13M)
0

Non Operating Income/Expense
8.09M
700,000
(4M)
(8.4M)
(3.06M)

Non-Operating Interest Income
1.68M
2.78M
4.47M
5.4M
0

Equity in Affiliates (Pretax)
0
0
0
0
-

Interest Expense
19.63M
20.03M
19.99M
29.14M
50.22M

Interest Expense Growth
-
2.02%
-0.19%
45.81%
72.33%

Gross Interest Expense
19.63M
20.03M
19.99M
29.14M
50.22M

Interest Capitalized
0
0
0
0
0

Pretax Income
267.7M
359.52M
30.48M
171.07M
349.37M

Pretax Income Growth
-
34.30%
-91.52%
461.27%
104.22%

Pretax Margin
-
-
-
-
6.35%

Income Tax
106.84M
133.4M
13.33M
58.67M
82.57M

Income Tax - Current Domestic
107.79M
152.06M
42.24M
73.71M
96.49M

Income Tax - Current Foreign
-
-70,000
1.16M
7M
16.14M

Income Tax - Deferred Domestic
-949,000
(18.6M)
(30.07M)
(21.68M)
(28.79M)

Income Tax - Deferred Foreign
-
-
-
-363,000
(1.28M)

Income Tax Credits
0
0
0
0
-

Equity in Affiliates
0
0
0
0
-

Other After Tax Income (Expense)
0
0
0
0
0

Consolidated Net Income
160.85M
226.13M
17.15M
112.4M
266.8M

Minority Interest Expense
0
0
0
0
0

Net Income
160.85M
226.13M
17.15M
112.4M
266.8M
INCREASING
Net Income Growth
-
40.58%
-92.41%
555.33%
137.36%

Net Margin Growth
-
-
-
-
4.85%

Extraordinaries & Discontinued Operations
0
0
0
0
0

Extra Items & Gain/Loss Sale Of Assets
0
0
0
0
0

Cumulative Effect - Accounting Chg
0
0
0
0
0

Discontinued Operations
0
0
0
0
0

Net Income After Extraordinaries
160.85M
226.13M
17.15M
112.4M
266.8M

Preferred Dividends
0
0
0
0
0

Net Income Available to Common
160.85M
226.13M
17.15M
112.4M
266.8M

EPS (Basic)
3.06
4.28
0.31
1.93
4.44

EPS (Basic) Growth
-
39.87%
-92.76%
522.58%
130.05%

Basic Shares Outstanding
52.53M
52.85M
55.52M
58.2M
60.08M

EPS (Diluted)
2.96
4.16
0.29
1.85
4.32

EPS (Diluted) Growth
-
40.54%
-93.03%
537.93%
133.51%

Diluted Shares Outstanding
54.3M
54.37M
58.9M
60.76M
61.7M

EBITDA
616.24M
1.22B
1.75B
2.47B
3.18B

EBITDA Growth
-
98.73%
43.06%
40.98%
28.92%

EBITDA Margin
-
-
-
-
57.85%

CASH FLOW STATEMENTS

Fiscal year is January-December. All values USD millions.
2010
2011
2012
2013
2014
5-year trend Net Income before Extraordinaries
160.85M
226.13M
17.15M
112.4M
266.8M

Depreciation, Depletion & Amortization
338.7M
839.62M
1.7B
2.24B
2.78B

Depreciation and Depletion
-
-
-
-
-

Amortization of Intangible Assets
-
-
-
-
-

Deferred Taxes & Investment Tax Credit
-962,000
(18.6M)
(30.07M)
(22.04M)
(30.06M)

Deferred Taxes
-962,000
(18.6M)
(30.07M)
(22.04M)
(30.06M)

Investment Tax Credit
-
-
-
-
-

Other Funds
(449.56M)
(848.58M)
(1.69B)
(2.35B)
(3.14B)

Funds from Operations
49.03M
198.56M
(3.24M)
(22.04M)
(120.62M)

Extraordinaries
0
-
0
-
-

Changes in Working Capital
227.37M
119.15M
26.01M
119.87M
137.1M

Receivables
-
-
-
-
-

Accounts Payable
139.98M
24.31M
(3.76M)
18.37M
83.81M

Other Assets/Liabilities
20.18M
25.93M
19.96M
99.55M
(2.35M)

Net Operating Cash Flow
276.4M
317.71M
22.77M
97.83M
16.48M

Investing Activities

2010
2011
2012
2013
2014
5-year trend Capital Expenditures
(158.24M)
(134.84M)
(89.73M)
(120.07M)
(144.52M)

Capital Expenditures (Fixed Assets)
(33.84M)
(49.68M)
(41.46M)
(54.14M)
(69.73M)

Capital Expenditures (Other Assets)
(124.41M)
(85.15M)
(48.28M)
(65.93M)
(74.79M)

Net Assets from Acquisitions
0
0
0
0
0

Sale of Fixed Assets & Businesses
12.92M
0
-
-
-

Purchase/Sale of Investments
29.31M
(134.65M)
(165M)
(141.84M)
100.32M

Purchase of Investments
(107.36M)
(223.75M)
(477.32M)
(550.26M)
(426.93M)

Sale/Maturity of Investments
136.68M
89.1M
312.32M
408.43M
527.25M

Other Uses
-70,000
0
0
0
0

Other Sources
-
3.67M
8.82M
5.94M
1.33M

Net Investing Cash Flow
(116.08M)
(265.81M)
(245.92M)
(255.97M)
(42.87M)

Financing Activities

2010
2011
2012
2013
2014
5-year trend
Cash Dividends Paid - Total
0
0
0
0
0

Common Dividends
0
0
0
0
0

Preferred Dividends
0
0
0
0
0

Change in Capital Stock
(160.48M)
19.9M
3.66M
615.14M
60.54M

Repurchase of Common & Preferred Stk.
(210.26M)
(199.67M)
-464,000
0
0

Sale of Common & Preferred Stock
49.78M
219.56M
4.12M
615.14M
60.54M

Proceeds from Stock Options
49.78M
199.95M
4.12M
615.14M
60.54M

Other Proceeds from Sale of Stock
-
19.61M
-
-
0

Issuance/Reduction of Debt, Net
(1.78M)
195.98M
(2.61M)
(220.54M)
391.83M

Change in Current Debt
0
(2.08M)
0
(1.18M)
0

Change in Long-Term Debt
(1.78M)
198.06M
(2.61M)
(219.36M)
391.83M

Issuance of Long-Term Debt
0
198.06M
0
0
392.92M

Reduction in Long-Term Debt
(1.78M)
0
(2.61M)
(219.36M)
(1.09M)

Other Funds
62.21M
45.78M
4.54M
81.66M
89.34M

Other Uses
0
0
0
0
0

Other Sources
62.21M
45.78M
4.54M
81.66M
89.34M

Net Financing Cash Flow
(100.05M)
261.66M
5.59M
476.26M
541.71M

Exchange Rate Effect
0
0
-197,000
(3.45M)
(6.69M)

Miscellaneous Funds
0
0
0
0
0

Net Change in Cash
60.28M
313.55M
(217.76M)
314.67M
508.64M

Free Cash Flow
242.56M
268.03M
(18.69M)
43.69M
(53.24M)

Works Cited
(n.d.). Retrieved from http://www.gurufocus.com/term/pe/NFLX/P%252FE%2BRatio/Netflix%2BInc
(n.d.). Retrieved from http://www.gurufocus.com/term/wacc/NFLX/Weighted%2BAverage%2BCost%2BOf%2BCapital%2B%2528WACC%2529/Netflix%2BInc edmunds, M. J. (2014). Netflix, Inc. . ACCOUNTING FUNDAMENTALS. http://www.fool.com/investing/general/2014/10/21/4-ways-that-netflix-inc-disappointed-investors-las.aspx. (n.d.). investopedia. (n.d.). Retrieved from http://www.investopedia.com/terms/p/profitabilityratios.asp
Kelly, R. (2014). Financial analysis of netflix.
MARKETWATCH. (n.d.). Retrieved from http://www.marketwatch.com/investing/stock/nflx/profile
NETFLIX. (n.d.). Retrieved from http://netflixcompanyprofile.weebly.com/
NFLXCG. (n.d.). Retrieved from http://ir.netflix.com/governance.cfm
NFLXVISION. (n.d.). Retrieved from http://retailindustry.about.com/od/retailbestpractices/ig/Company-Mission-Statements/Netflix-Movies-Mission-Statement.htm review, j. (n.d.). Retrieved from http://jobsearchtech.about.com/od/companyprofiles/a/Netflix_3.htm stock reports. (n.d.). Retrieved from http://www.valueline.com/Stocks/Highlights/Netflix__A_Short_SWOT_Analysis.aspx#.VRLRhY54qF5 val. (n.d.). Retrieved from http://moneyterms.co.uk/valuation-ratios/
Wrooney. (2011). Netflix Paper. Business and economy.