How would you explain your Return on Equity (ROE) performance over two years based on Du Pont Identity Analysis? What drove the increase in your ROE over the 2-year period?
Below is a picture of Netflix Inc.'s calculated ROE for 2017 (15.6040%) and 2018 (23.1208%)
Income Statement
Balance Sheet
Cash Flows Statement
15.6040% 23.1208% 1 Breakdown TTM 12/31/18 12/31/17 2 Total Revenue 17,630,323 15,794,341 11,692,713 _ 3 Cost of Revenue 11,140,799 9,967,538 7,659,666 4 Gross Profit 6,489,524 5,826,803 4,033,047 5 Operating Expenses 6 Research Development 1,396,406 1,221,814 1,052,778 7 Selling General and Administrative 3,231,180 2,999,763 2,141,590 8 Total Operating Expenses 4,627,586 4,221,577 3,194,368 9 Operating Income or Loss 1,861,938 1,605,226 838,679 10 Interest Expense 525,231 420,493 238,204 11 Total Other Income/Expenses Net -115,154 12 Income Before Tax 1,398,781 1,226,458 485,321 13 Income Tax Expense 247,310 15,216 -73,608 14 Income from Continuing Operations 1,151,471 1,211,242 558,929 15 Net Income 1,151,471 1,211,242 558,929 16 Net Income available to common shareholders 1,151,471 1,211,242 558,929 17 Reported EPS 18 Basic 2.78 1.29 19 Diluted 2.68 1.25 20 Weighted average shares outstanding 21 Basic 435,374 431,885 22 Diluted 451,244 446,814 23 EBITDA 9,303,408 7,053,910 Income Statement Balance Sheet C ash Flow Statement 1 Breakdown 12/31/18 12/31/17 Assets Current Assets Cash Cash And Cash Equivalents 3,794,483 2,822,795 Short Term Investments Total Cash 3,794,483 2,822,795 Net Receivables 9 Inventory 10 Other Current Assets 5,899,652 4,847,179 11 Total Current Assets 9,694,135 7,669,974 12 Non-current assets 13 Property, plant and equipment 14 Gross property, plant and equipment 786,800 641,218 15 Accumulated Depreciation -368,519 321,814 16 Net property, plant and equipment 418,281 319,404 17 Equity and other investments 18 Goodwill 19 Intangible Assets 14,960,954 10,371,055 20 Other long-term assets 901,030 652,309 21 Total non-current assets 16,280,265 11,342,768 22 Total Assets 25,974,400 19,012,742 23 Liabilities and stockholders' equity 24 Liabilities 25 Current Liabilities 26 Total Revenue 27 Accounts Payable 562,985 359,555 28 Taxes payable 29 Accrued liabilites 477,417 315,094 30 Deferred revenues 760,899 618,622 31 Other Current Liabilities 4,686,019 4,173,041 32 Total Current Liabilities 6,487,320 5,466,312 33 Non-current liabilities 34 Long Term Debt 10,360,058 6,499,432 35 Deferred taxes liabilites 36 Deferred revenues 17 Other long-term liab 3,888,257 3,465,042 38 Total non-current liabilities 14,248,315 9,964,474 19 Total Liabilities 20,735,635 15,430,786 10 Stockholders' Equity 11 Common Stock 2,315,988 1,871,396 12 Retained Earnings 2,942,359 1,731,117 13 Accumulated other comprehensive income -19,582 -20,557 14 Total stockholders' equity 5,238,765 3,581,956 5 Total liabilites and stockholders' equity 25,974,400 19,012,742 16 TTM 12/31/18 12/31/17 1,151,471 8,450,554 -11,786 376,078 447,868 1,211,242 7,656,457 -85,520 320,657 1,293,647 558,929 6,330,385 -208,688 182,209 958,983 -9,759199,198 -3,090,660 -2,893,011 -13,237,282 -13,003,009 -2,849,036 -2,680,479 74,559 -2,012,970 -9,748,556 -1,785,948 - - -241,624 -212,532 -227,022 0 Breakdown Cash flows from operating activities Net Income Depreciation & amortization Deferred income taxes Stock based compensation Change in working capital Accounts receivable Inventory Accounts Payable Other working capital Other non-cash items Net cash provided by operating activites Cash flows from investing activities Investments in property, plant and equipment Acquisitions, net Purchases of investments Sales/Maturities of investments Other investing activites Net cash used for investing activites Cash flows from financing activities Debt repayment Common stock issued Common stock repurchased Dividends Paid Other financing activites Net cash used privided by (used for) financing activities Net change in cash Cash at beginning of period Cash at end of period Free Cash Flow Operating Cash Flow Capital Expenditure ochflow -74,819 342,859 -6,689 34,329 -137,567 -379,191 -126,588 -339,120 86,099 124,502 88,378 -38,174 4,352,973 1,114,211 3,913,994 5,038,740 -37,827 4,048,527 989,246 2,822,795 3,812,041 -31,898 3,076,990 1,355,219 1,467,576 2,822,795 -2,849,036 -2,680,479 -1,785,948 -241,624 -212,532 -227,022 onco2002011201220
