Strategy, Accounting and Financial Analysis of Netflix

Assignment #5–Strategy, Accounting and Financial Analysis of Netflix
Due Sunday Week 8
200 Points

Company Background and Strategy
Briefly describe the company’s industry, markets, products, and specific lines of business. Discuss its strategy for success and, most importantly, the sustainability of profits generated by the strategy. Refer especially to business description and risk factors of your company’s most recent 10-K (MD & A Analysis). You may also use information from the company website.

Notes to the Financial Statements
Discuss key aspects of the information provided in the company Notes to the Financial Statements. Address the following three areas:

● Significant Accounting Policies
● Contingent Liabilities (if any)
● Other specific notes that stick out as interesting or potentially significant to the business and/or important to investors such as M&A, R&D, business reorganizations, etc.

Discuss how this information is helpful for assessing the financial health of the company.

Financial Analysis Techniques
Discuss at least 3 techniques of financial analysis (one must be ratio analysis). The techniques chosen can be either quantitative or qualitative. Comment on the pros and cons/limitations of each technique.

Ratio Analysis & Common Size Statements (Trends)

(1) Using Appendix 5: Summary of Financial Ratios, choose two ratios from each category (liquidity, activity, leverage, profitability, and market). You will have a total of 10 ratios for each of the three years presented. Display ratios in a chart as follows.

Use the three most recent completed years for which financial statements are available.
20XX (1) 20XX (2) 20XX (3)
Liquidity
Ratio 1
Ratio 2

Activity
Ratio 1
Ratio 2

Leverage
Ratio 1
Ratio 2

Profitability
Ratio 1
Ratio 2

Market
Ratio 1
Ratio 2

(2) Create a common size balance sheet and income statement for the same 3-year period.

(3) Discuss the overall results of the ratios and common size statements. Be specific and thorough. It’s okay to speculate about what the numbers may mean and the potential impact on the company. What trends do you notice?

Industry Comparison

Search the company on the MSN Money website. Find the industry ratios for the following:

● Current Ratio
● Debt to Equity Ratio
● Return on Assets
● Return on Equity
● Inventory Turnover
● Asset Turnover

(1) Display the ratios in a chart as follows:

(Use the most recent year for which financial statements are available.)

Company Industry
20XX 20XX
Ratio 1
Ratio 2
Ratio 3
Ratio 4
Ratio 5
Ratio 6

(2) Compare and contrast the company with the industry ratios.

Overall Assessment of Company

Based on (1) the complete analysis conducted and (2) general company research (news articles), discuss the team’s overall assessment of the company. Be thorough. This is a detailed assessment bringing together all the elements of the analysis and research the team has conducted.

Evaluation Criteria for: Team Project
Team Project
200 points WD
180 to 200 Points Dev
140 to 179 Points NSW
0 to 139 Points
Content (60%)
120 points 120
All parts of the assignment are addressed in thorough detail. (Refer to project instructions for requirements in each section) Makes connections to concepts presented in the research and textbook. 100
All parts of the assignment are addressed but more detail is needed. (Refer to project instructions for requirements in each section) And somewhat connects to the research, and the textbook. 60
All f parts of the assignment are not addressed. There is very little detail presented. (Refer to project instructions for requirements in each section) Does not show how this connects to the research, textbook.
Design & Organization (30%)
60 points 60
The site is well organized, interesting, and easy to read. The site contains various design elements (e.g. colors, headings, visuals/pictures, videos, etc.) that makes the info. easy to read and allows the viewer to engage in different types of content. 40
The site is mostly organized, interesting, and easy to read. The site contains very few design elements (e.g. colors, headings, visuals/pictures, videos, etc.) that makes the info. easy to read and allows the viewer to engage in different types of content. 20
The site is disorganized and doesn’t flow well. The disorganization makes it difficult for the viewer to follow what is being presented. Did not include various design elements (e.g. colors, headings, visuals/pictures, videos, etc.).
Grammar, Spelling, Speech Patterns, Punctuation and APA (10%)
20 points 20
Clearly uses proper grammar, APA for in text citations and for all references. 10
Has more than five errors in APA, grammar and or punctuation. 5
Has more than ten errors in APA, grammar and or punctuation.
N S W = Needs Significant Work D = Developing WD = Well Developed