Netflix

Key Performance Metrics

  • 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 18.16%, 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 – 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 6.46% increase was recorded between 2021 and 2022. There also occurred a 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 decreased from 1.17:1 to 1.12:1 on the last year. Which implies that the company does not have 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 increasing year on year. The gearing position of the company appears to be high as it stood at 71% in the current year.

Source: Netflix Annual Report

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