FINANCIAL ANALYSIS OF NETFLIX COMPANY

Financial Analysis of Netflix Company



Analysis of Netflix Company

Analysis of financial statements

Here, I have taken years 2009 and 2010 for the analysis of financial statements of Netflix Company. In 2009 the gross profit was $590,998, and in 2010 it was $805,270. The net income for the year 2009 was $115,860 and $160,853 for 2010. It means that the financial position of the company was improved in the year 2010 as compared to 2009. Stockholders' equity for the year 2009 is $199,143 and $290,164 for 2010. Total assets for 2009 are $679,734 and 2010 is $982,067. Total liabilities for the year 2009 are $480,591 and $691,903 for 2010. Through this analysis, we can say that the financial position of the company is moving towards better position in the year 2010. And it is a cost advantage company.

SWOT Analysis

With more than 12 million subscribers, Netflix is the world's largest subscription service streaming movies and TV episodes over the Internet and sending DVDs by mail. The company's business model gives it a competitive advantage as against the traditional outlets. However, increase in postage rates will put higher pressures on Netflix's profit margins (Lieberman, 2010).

Strengths

Flexibility: usage of internet, pre-paid postage envelopes, combined with no due dates, provide superior value proposition

With more than 12 million subscribers, Netflix is the world's largest subscription service streaming movies and TV episodes over the internet and sending DVDs by mail. The company operates an internet based subscription model which has done away with many disadvantages experienced in the traditional outlets model. An increased number of customers opt for Netflix as it is convenient. Apart from this, the company enjoys additional competitive advantages. Netflix can provide a wide range of collection which is not possible for outlets as they cannot stack large number ...