Comparative financial statements for Netflix and Outerwall Inc. (Redbox) are provided at the bottom of this document. Use the information in these statements to respond to the numerical questions below.

1. Compute the dollar amount of the change in the total holdings of content for Netflix and for Outerwall Inc. (Redbox) between 12/31/2013 and 12/13/2015.

2. Describe the risk associated with Netflixs investment in content.

3. Describe the risk associated with Outerwall Inc.s (Redbox) investment in content.

4. What are the primary sources of financing that Netflix used to acquire the funds needed to implement a strategy that focused on growing their content holdings? (include in your answer specific numerical data taken from the financial statements provided)

5. Compute the percent change in the total assets for Netflix and Outerwall Inc. (Redbox) between 12/31/2013 and 12/31/2015. How do these percentages align with the strategic visions of the two companies?

6. Outerwall Inc. (Redbox) reported substantial sums of cash from operations over the three year period ($326,085,000; $338,351; $327,834). What did they do with the cash they generated from operations? (include specific numerical data taken from the financial statements provided) And, how does the manner in which they used the cash generated from operations align with the strategic vision for the company?

7. Outerwall Inc. (Redbox) reported each year a positive number ($2,829; $2,683; $1,538) in the Cash Flow Statement under the heading Effect of Exchange Rate Changes. Explain what this number represents. And, identify the circumstances that would cause this number to be negative rather than positive?

NETFLIX, INC: FINANCIAL STATEMENTS (values in 000's) E F G Balance Sheets December 31, December 31, December 31, 2015 2014 2013 Assets I 6 Current assets Cash and cash equivalents 1,809,330 1,113,608 604.965 Short-term investments 501,385 494.888 595.440 Current content assets, net 2,905,998 2.166.134 1.747.293 215,127 89.554 10 Other current assets 152,423 5.431.840 3.927.053 3.037.252 l 11 Total current assets 4,312,817 2,773,326 2,091,071 12 Non-current content assets, net 133,605 13 Property and equipment, net 173,412 149.875 14 Other non-current assets 284.802 192,246 142.097 10.202.871 7.042.500 5.404.025 15 Total assets 16 Liabilities and Stockholders' Eguity 17 Current liabilities: I 18 Current content liabilities 2,789,023 2,117,241 1,775,983 108,435 19 Accounts payable 253,491 201,581 140,389 20 Accrued expenses 69.746 54,018 21 346.721 274,586 215.767 Deferred revenue 3.529.624 2.663.154 2.154.203 Total current liabilities 23 Non-current content liabilities 2,026,360 1,575,832 1,345,590 24 Long-term debt l 2,371,362 885,849 491,462 25 Long-term debt due to related party 52,099 59,957 T9.209 26 Other non-current liabilities Total liabilities 7,979,445 5.184.792 4,070,464 27 I 28 Stockholders' equity: 29 Common Stock 1,324,809 1,042,870 30 Other Common Stock (43,308) 31 Retained Earnings 2.223.426 1.857.708 1.333.561 32 Total stockholders' equity 33 Total liabilities and stockholders' equity S 10.202.871 ST.042.500 S 5.404.025