Hello, I am looking for someone to write an essay on Financial Statement on Netflix. It needs to be at least 500 words.
Looking at the cash flow statement of the year, certain major components stand out. During this year, they bought back $90 million worth of their own stock. The buying of this stock was made possible due to the large increase in price (Houston and Brigham, p. 248).
In the year 2013 and 2014, the company spent over half of the total revenues on subscription. Expenses on subscription were 57.2% of the total revenue in 2013 and 55.1% of the total revenue in 2014. It therefore means that subscription expenses increased by 14.1%. These subscription expenses are as a result of shipping off DVDs to customers. They also result from buying of content from distributors. Shipping costs include package, postage and labels. In 2013, more DVDs were shipped since there were more subscribers.
The operating expenses for Netflix include expenses incurred on technology and development, marketing and administration. There was an increase of 26.3% for expenses on technology and development between 2013 and 2014. The increase in these expenses was because of need for more personnel to stream content on the internet. In terms of total revenue, these expenses were 6.2% in 2013 compared to 5.7% in 2014. Expenses incurred on marketing reduced by 8.5% from 2013 to 2014 and comprised 15.6% of total revenues in 2014 compared to 16.8% in 2013. The reduction in marketing expenses is a reflection of Netflix’s resolution to decrease its advertisements to potential customers.
In terms of assets, cash and cash equivalents accounted for 94% of current assets owned by Netflix in the year 2013. In 2014, cash represented 47% of Netflix’s current assets. This reduction in cash is attributed to the company’s use of cash for short term-term investments. The company invested in corporate debt securities, asset and mortgage backed securities and agency securities (Houston
