Prepare a common-size income statement for >>> the Netflix company 2019
and
Calculate growth rates for sales and total operating expenses
recognizes interest and penalties related to uncertain tax positions in income tax expense. See Note 8 to the consolidated financial statements for further information regarding income taxes. 49 Table of Contents Foreign Currency The functional currency for the Company's subsidiaries is determined based on the primary economic environment in which the subsidiary operates. The Company translates the assets and liabilities of its non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenues and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in cumulative translation adjustment included in "Accumulated other comprehensive loss" in Stockholders' equity on the Consolidated Balance Sheets. The Company remeasures monetary assets and liabilities that are not denominated in the functional currency at exchange rates in effect at the end of each period. Gains and losses from these remeasurements are recognized in interest and other income (expense). Foreign currency transactions resulted in a gain of $7 million for the year ended December 31, 2019, and in a loss of $1 million and $128 million for the years ended December 31, 2018 and 2017, respectively. Earnings Per Share Basic earnings per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential common shares outstanding during the period. Potential common shares consist of incremental shares issuable upon the assumed exercise of stock options. The computation of earnings per share is as follows: Year ended December 31, 2019 2018 2017 (in thousands, except per share data) $ 1,866,916 $ 1,211,242 $ 558,929 437,799 4.26 435,374 2.78 431,885 1.29 $ $ $ Basic earnings per share: Net income Shares used in computation: Weighted average common shares outstanding Basic earnings per share Diluted earnings per share: Net income Shares used in computation: Weighted-average common shares outstanding Employee stock options Weighted-average number of shares Diluted earnings per share $ 1,866,916 $ 1,211,242 $ 558,929 437,799 13,966 451,765 435,374 15,870 451,244 431,885 14,929 446,814 $ 4.13 $ 2.68 $ 1.25 Employee stock options with exercise prices greater than the average market price of the common stock were excluded from the diluted calculation as their inclusion would have been anti-dilutive. The following table summarizes the potential common shares excluded from the diluted calculation: Year ended December 31, recognizes interest and penalties related to uncertain tax positions in income tax expense. See Note 8 to the consolidated financial statements for further information regarding income taxes. 49 Table of Contents Foreign Currency The functional currency for the Company's subsidiaries is determined based on the primary economic environment in which the subsidiary operates. The Company translates the assets and liabilities of its non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenues and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in cumulative translation adjustment included in "Accumulated other comprehensive loss" in Stockholders' equity on the Consolidated Balance Sheets. The Company remeasures monetary assets and liabilities that are not denominated in the functional currency at exchange rates in effect at the end of each period. Gains and losses from these remeasurements are recognized in interest and other income (expense). Foreign currency transactions resulted in a gain of $7 million for the year ended December 31, 2019, and in a loss of $1 million and $128 million for the years ended December 31, 2018 and 2017, respectively. Earnings Per Share Basic earnings per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential common shares outstanding during the period. Potential common shares consist of incremental shares issuable upon the assumed exercise of stock options. The computation of earnings per share is as follows: Year ended December 31, 2019 2018 2017 (in thousands, except per share data) $ 1,866,916 $ 1,211,242 $ 558,929 437,799 4.26 435,374 2.78 431,885 1.29 $ $ $ Basic earnings per share: Net income Shares used in computation: Weighted average common shares outstanding Basic earnings per share Diluted earnings per share: Net income Shares used in computation: Weighted-average common shares outstanding Employee stock options Weighted-average number of shares Diluted earnings per share $ 1,866,916 $ 1,211,242 $ 558,929 437,799 13,966 451,765 435,374 15,870 451,244 431,885 14,929 446,814 $ 4.13 $ 2.68 $ 1.25 Employee stock options with exercise prices greater than the average market price of the common stock were excluded from the diluted calculation as their inclusion would have been anti-dilutive. The following table summarizes the potential common shares excluded from the diluted calculation: Year ended December 31
