Netflix in $2011$

By: Willy Shih, Stephen P$.$ Kaufman

provide an ROIC or ROE model. Analysis the information from the financial statements to assess the strengths and weaknesses of the subject firm by comparing certain of the firm's financial ratio values to the firm's own historical values and those of competitors. This mathematical relationship confirms that the source of a higher return on equity can be traced to favorable values of one or more of the constituent ratios, and the cause of a low ROE can be similarly traced to unfavorable values of at least one of the component ratios.

Once the ratio$($s$)$ with favorable or unfavorable values are identified, recommendations for operational improvement of the unfavorable ratios can be developed to assist the firm in improving its performance.