Financial Performance of Netflix: Subscribers Growth, Covid-19 Impact, and Dividend Policy

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Name:
Student I.D:
Date:

Table of Contents
INTRODUCTION...............................................................................................................3
1. Company Name:.........................................................................................................3
1.1-Selling Products.......................................................................................................3
1.2- Revenue of the Company.......................................................................................4
1.3- Purpose...................................................................................................................4
Section A............................................................................................................................5
1- Development one: Subscribers growth......................................................................5
2- Development two: Covid19........................................................................................6
Section B............................................................................................................................7
2. Dividend Policy........................................................................................................7
Netflix Dividend...............................................................................................................7
Section C: Ratio Analysis................................................................................................10
1. Profitability Ratios:.................................................................................................10
 Return on Capital Employed..............................................................................10
 Operating Profit margin......................................................................................10
 Return on Equity.................................................................................................11
2. Liquidity Ratio:...........................................................................................................11
 Current ratio...........................................................................................................11
 Quick ratio..............................................................................................................12
4. Gearing Ratio:...........................................................................................................13
 Interest Coverage Ratio.........................................................................................13
5. Investment Ratio.......................................................................................................14
 Earnings Per Share...............................................................................................14
Conclusion.......................................................................................................................14
References.......................................................................................................................15
Appendices......................................................................................................................20
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INTRODUCTION
1. Company Name:
Netflix, in full system Netflix, Inc., is a video rental and broadcasting flowing
organization that was originated by Americans in 1997. Headquarters is located in
California, Los Gatos, which is also elaborate in creative software design formation. (L.
& Hosch., 2022). Reed Hastings and Marc Randolph In 1997 formed in California. Via
mail both came up with the idea of starting the idea as a DVD charge service. The
company was launched in 1998 as a DVD payment site (Gregory. & Kathryn., 2021)
Today’s paid membership of this company is 183 mln now, it is the world’s largest
flowing performing in all over 190 countries which provide biographies, TV succession,
movies, and variability of languages across the world (Netflix, 2020a).
Figure 1 – Netflix’s Global Presence
(Global, 2022)
1.1-Selling Products
Selling products of Netflix shop will be necklaces, hoodies, caps, and charms these
items will be sold on location of the company. The company originates an operational
store with a tech corporation, in this period Netflix made a deal with different
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organizations such as; Walmart, Sephora, and products which is selling online items
related to films and series like toys, clothes, and housewares. (Maheshwari., et al.,
2022).
1.2- Revenue of the Company
In Canada and the U.S revenue of this firm the in the year 2021 increased by 11.0% to
3.3 billion, in the fourth quarter which was very slowest growing. Revenue of Netflix firm
is 18.1% which is collected from Middle East, Africa and Europe in year 2021 (Zhao. &
Ziqian., 2022).
Annual Revenue
Figure 2: Netflix Revenue earned from 2013 to 2021
(Zhao. & Ziqian., 2022)
1.3- Purpose
Objective of the statement is to estimate the monetary performance of Netflix for last 2
years 2020-2021. Moreover, expansions which is affecting the financial performance
are drawn, manages the risk which is associated with its sources of finance and
dividend.
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