This problem is based on Netflix Inc. and it is designed to underscore the power of financial ratios and the relationship between numbers and strategy. Whether we are making a personal plan for retirement or we are leading an organization, when making decisions that involve financial resources and strategies, ratios are an important because they highlight relationships. In the introductory paragraphs of their SEC Form 10-K, prepared for the 2018 fiscal year, Netflix describes their company as the worlds leading internet entertainment service with over 139 million paid memberships in over 190 countries enjoying TV series, documentaries and feature films across a wide variety of genres and languages. (Netflix Inc., 2018) Numbers are an essential part of the Netflix story. Netflix was founded in 1997 on a business model that employed the then new idea of placing videos in mailers and mailing them to subscribers in return for small rents. Subscribers would take the videos out of the mailers, watch them on their players at home, and send them back to Netflix. The company has come a long way since 1997. Netflix is an outstanding example of a company that has continuously reinvented itself in response to challenges emanating from a rapidly changing environment. Still, their future success is in no way guaranteed. The excerpt which follows is taken from the 2018 10-K report Netflix filed with the SEC. We are a pioneer in the internet delivery of TV shows and movies, launching our streaming service in 2007. Since this launch, we have developed an ecosystem for internet-connected screens and have added increasing amounts of content that enable consumers to enjoy TV shows and movies directly on their internet-connected screens. As a result of these efforts, we have experienced growing consumer acceptance of, and interest in, the delivery of TV shows and movies directly over the internet. Our core strategy is to grow our streaming membership business globally within the parameters of our profit margin targets. We are continuously improving our members' experience by expanding our streaming content with a focus on a programming mix of content that delights our members. In addition, we are continuously enhancing our user interface and extending our streaming service to more internet-connected screens. Our members can download a selection of titles for offline viewing. (Netflix Inc., 2018) Netflix has embraced the concept of providing original programming. Their programs and documentaries have been honored with Emmy, Golden Globe, and Academy Oscar awards

.Like Netflix, GameStop is a company that sells entertainment. By 2019, GameStop had become the largest retailer of new and used video games, hardware, entertainment software, and accessories with roughly 4,000 GameStop, EB Games, and Micromania branded stores in the US and 2,000-plus stores in Europe, Australia, and Canada. Their stores and e-commerce websites stocked more than 6,000 video game related items, with more than half of sales coming from new video game hardware and software. GameStop was also selling downloadable add-on content from publishers and operating 1,300 smartphone retail locations under the AT&T, Cricket Wireless, Simply Mac, and Spring Mobile banners (note, Spring Mobile was slated for divestiture), and they published the video game magazine Game Informer. (Dun & Bradstreet, Inc., 2019) If Netflix is new school, then GameStop is old school. At the beginning of 2019, Netflix is a company in the growth phase and GameStop is a mature company in the harvest phase. Whereas, Blockbuster Video provides an example of a company thats in the extinction phase. In 2004 there were over 9,000 Blockbuster Video stores; and in July of 2018, the city of Bend, Oregon gained a new tourist attractionthey became the home of the last remaining Blockbuster Video Store. Presented below are SWOT analyses for Netflix and GameStop prepared as of March 20, 2019 and sourced from D&B Hoovers. SWOT is a familiar acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths and Weaknesses are intended to describe conditions internal to the organization. Opportunities and Threats are terms used to describe the external environment within which the organization operates.