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. You are free to access information using the Internet and other sources.

NETFLIX FINANCIAL STATEMENTS:

REDBOX FINANCIAL STATEMENTS:

1. (3 points) 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. (3 points) Describe the risk associated with Netflixs investment in content.

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

4. (4 points) 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. (4 points) 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. (4 points) 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. (4 points) 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?

A B Netflix, Inc I Balance Sheets December 31, December 31, December 31 2015 2014 2013 5 Assets 6 Current assets: I I$ 1,809,330 608 604,965 Cash and cash equivalents I 501,385 494,888 595,440 Short-term investments Current content assets, net l 2,905,998 2.166.134 1,747,293 10 Other current assets l 215.12 152.423 B9.554 11 Total current assets I 4312,817 2,773,326 2,091,071 12 Non-current content assets, net l 173,412 149,875 133,605 13 Property and equipment, net l 284.802 192.246 142.097 14 Other non-current assets 15 RS 10,202,871 S 7,042,500 S 5,404,025 Total assets 16 Liabilities and Stockholders' Equity I I 17 Current liabilities: I$ 18 Current content liabilities 2,789,023 2,117,241 1,775,983 19 Accounts payable l 253,491 201,581 108,435 20 l 140,389 69,746 54,018 Accrued expenses 21 346,721 Deferred revenue 22 l 3,529,624 2,663,154 2,154,203 l 026.360 1.575.832 1,345,590 Total current liabilities 23 Non-current content liabilities 24 Long-term debt l 2,371,362 885,849 491,462 25 Long-term debt due to related party l l 52.099 59957 79209 26 Other non-current liabilities 27 l 7.979.445 5.184,792 4070.464 Total liabilities I 28 Stockholders' equity: Common Stock I 1,324,809 1,042,870 777,501 29 30 Other Common Stock I 43,308) (4,446) 3,575 I 94.925 819284 552.485 Retained Earnings 31 32 I 2.223.426 1.857708 1333561 Total stockholders' equity 33 Total liabilities and stockholders' equity 10,202,871 7,042,500 5,404,025