Case Netflix Here below you will find selected financial data of Netflix. Use this data to study a hypothetical situation, when the otherwise very quick pace of acquiring new subscribers, at Netflix, significantly slows down and comes to a virtual standstill, as a result of competition with new streaming platforms, such as Disney +. What kind of change in market structure would that represent? How would such a slowdown, and then standstill impact the business of Netflix and its financials? In the process, calculate total liabilities of Netflix, and calculate the average cost of capital in those liabilities, i.e. the average interest that Netflix pays on borrowed capital. As of December 31, (in $thousands) 2018 2017 Consolidated Balance Sheets $3 794 483 $20 112 140 $25 974 400 $2 822 795 $14 681 989 $19 012 742 Cash, cash equivalents and short-term investments Total content assets, net Total assets $3 759 026 $3 329 796 Non-current content liabilities $8 445 045 $7 502 837 Total content liabilities Total liabilities Total stockholders' equity $3 581 956 $5 238 765 Consolidated Cash Flows ($13 043 437) ($9 805 763) ($238 204) Additions to streaming content assets Interest expense ($420 493) Market capitalization $110 620 00 $80 590 000 Consolidated statement of operations $11 692 713 $8 033 000 $1 436 281 Revenues $15 794 341 $9 967 538 $2 369 469 $1 221 814 Cost of revenues Marketing Technology and development $953 710 General and administrative $630 294 $431 043 $1 605 226 Oporating income $838 679 Case Netflix Here below you will find selected financial data of Netflix. Use this data to study a hypothetical situation, when the otherwise very quick pace of acquiring new subscribers, at Netflix, significantly slows down and comes to a virtual standstill, as a result of competition with new streaming platforms, such as Disney +. What kind of change in market structure would that represent? How would such a slowdown, and then standstill impact the business of Netflix and its financials? In the process, calculate total liabilities of Netflix, and calculate the average cost of capital in those liabilities, i.e. the average interest that Netflix pays on borrowed capital. As of December 31, (in $thousands) 2018 2017 Consolidated Balance Sheets $3 794 483 $20 112 140 $25 974 400 $2 822 795 $14 681 989 $19 012 742 Cash, cash equivalents and short-term investments Total content assets, net Total assets $3 759 026 $3 329 796 Non-current content liabilities $8 445 045 $7 502 837 Total content liabilities Total liabilities Total stockholders' equity $3 581 956 $5 238 765 Consolidated Cash Flows ($13 043 437) ($9 805 763) ($238 204) Additions to streaming content assets Interest expense ($420 493) Market capitalization $110 620 00 $80 590 000 Consolidated statement of operations $11 692 713 $8 033 000 $1 436 281 Revenues $15 794 341 $9 967 538 $2 369 469 $1 221 814 Cost of revenues Marketing Technology and development $953 710 General and administrative $630 294 $431 043 $1 605 226 Oporating income $838 679
