The review of Net Profit Margin witnessed a surging trend. The Net Profit Margin improved from 9.26% in 2019 to 16.04% in 2023.
The average EBIT Margin for the period under analysis was 18.2%, with 2019 and 2021 performing the worst and best, respectively.
In the current year, Netflix was able to cover its interest liabilities 9.87 times in the current year compared to 2019 when it was 4.29 times.
The Asset turnover stood at 0.68 times in 2023 from 0.66 in 2019, implying a high performance on Assets of the business in relation to revenue
Profitability
The revenue of Netflix has fluctuated year on year. The revenue increased by 24.01% between 2019 and 2020 and a further 18.81% increase was recorded between 2020 and 2021. There also occurred an increase of 6.67% between 2022 and 2023 (the current period).
Netflix’s performance in profitability looks good as the return on capital employed also recorded good performance during the period of analysis.
Liquidity
The company’s result in liquidity looks strong, as current increased from 1.09:1 to 1.12:1 in the last year. Which implies that the company has enough assets to settle its current liabilities.
Capital Structure
Netflix is both equity and debt financed.
The debt-to-equity (D/E) ratio has been decreasing year on year. The gearing position of the company appears to be high as it stood at 71% in the current year.
