Netflix Analysis

Historical Financial Analysis Time Series Analysis (Detailed in Exhibits 9-11) Overall, the historical financial statements of Netflix are characteristic of a lodge entering its suppuration stage. Revenues have grown at a rapid pace over the past five years, change magnitude from $996 million in FY 2006 to $1.6 billion in FY 2009. Assets have increase slightly over the same time period, to $663 million. Netflix is currently ontogenesis at a more rapid pace than it has in the confederacys history, which dates back to 1997. Netflix appears like a company that has figured verboten its task model and is looking to flesh upon that model. When analyzing Netflixs income statement, the most obvious factor standing out is that the companys earnings have increased apace over the past five years, more than doubling from FY 2005 to FY 2009. a lot of this growth can be attributed to increasing revenues. Earnings growth can also be attributed to improving moldings as the excess revenues come without additions to its fixed assets. In FY 2009, its EBIT contribution was 11.89% and the net margin was 6.94%. Each of these margins has increased by a couple of percentage points in comparison with prior years. Important items to look at in the internet retailing industry are revenues, taxation margin, and operating expenses.

Material costs in Netflixs business are its cost of goods interchange, depreciation, and SG&A expenses. Cost of goods sold represents about half of the companys total revenue. It is renowned that this expense increased by 2 percentage points congenator to Netflixs revenues. This increase may be due to a shift in its business strategy to emphasize its digital streaming offerings to consumers. Depreciation represents about 15% of total revenues. at that place was a spike of a couple of percentage points in 2007 and 2008, but it has declined again in 2009. We will look into this inclination further when we examine the cash flow statement. SG&A is the second largest expense... If you want to get a full essay, install it on our website: Orderessay

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