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Netflix Financial Analysis Paper

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Introduction The corporation selected for this week’s topic paper is Netflix, Inc. (NFLX), a streaming subscription service offering a rotating selection of network television shows, movies, comedy specials, documentaries, and feature films in a variety of genres and languages. According to Yahoo Finance (2023), Netflix has “approximately 222 million paid members in 190 countries.” The company is headquartered in Los Gatos, California, and has offices in countries all over the globe. This paper will provide an overview of the five principles that lay the foundation of finance and relate them to Netflix and its business practices. Additionally, it will report on the company’s income statement as well as its most recent quarterly report. Finally, …show more content…

For instance, in 2019, Netflix brought in a total revenue of $20,156,447 and a gross profit of $7,716,234; in 2021, those figures climbed to $29,697,844 and $12,365,161, respectively (Yahoo Finance, 2023). In the last twelve month, Netflix has continued to do better than it did in 2020, bringing in a total revenue of $31,472,815 and a gross profit of $12,469,115 (Yahoo Finance, 2023). Between 2019 and 2022, Netflix saw a 56% increase in total revenue and a 62% increase in gross profits. Total expenses increased in cost from $17,552,193 in 2019 to $25,758,118 over the last twelve months, a 46.8% increase (Yahoo Finance, 2023). However, Netflix has managed to increase their profits at a higher rate than their expenses, which is obviously essential to remain a successful company. Finally, Netflix’s quarterly report document contains some interesting information, as well. For example, in the first quarter of 2022, the firm had 221.64 million paid members around the world; by the fourth quarter of the year, those numbers had rose 4.1% to 230.75 million (Netflix Investors, 2023). In areas such as revenue, operating income, year-over-year growth, and net income, Netflix’s fourth quarter was behind its third quarter; however, the streaming giant predicts that several of these figures should be on the up again in the first quarter of …show more content…

Because of this success, it is expected that the company will continue growing, expanding, and investing for the benefit of its shareholders. As one of the most competitive firms in its industry, Netflix must consider ways to keep improving and drawing in new customers. Sun (2022) recommends improving the quality and expanding the quantity of its available movies and shows (p. 5); for example, different shows and movies are available to stream in different regions of the globe. Netflix could provide users with the option to select a region different from their own to access the media there. Additionally, the streaming platform could enter new technological realms (Sun, 2022, p. 5) and introduce virtual reality (VR) experiences or even interactive quizzes to recommend shows and movies to subscribers who do not know what to watch. Netflix has consistently been a boundary-breaking corporation on the cutting edge of its field, and if it wants to stay ahead of the competition, it will have to continue taking risks to reap the

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