Compute and Analyze Measures for DuPont Disaggregation AnalysisThe 2018 balance sheets and income statement for Netflix Inc. follow. Refer to these financial statements to answer the requirements.NETFLIX INC. Consolidated Statements of EarningsFor Year Ended December 31, $ thousands2018Revenues$9,318,661Cost of revenues5,880,8471,397,987720,870630,294688,663MarketingTechnology and developmentGeneral and administrativeOperating incomeOther income (expense)Interest expenseInterest and other incomeIncome before income taxesProvision for income taxesNet incomeNETFLIX INC. Consolidated Balance Sheetsin thousands, except par value2018Current assetsCash and cash equivalentsCurrent content assets, netOther current assetsTotal current assetsNoncurrent content assets, netProperty and equipment, netOther noncurrent assetsTotal assetsCurrent liabilitiesCurrent content liabilitiesAccounts payableAccrued expensesDeferred revenue(248,091)41,725482,2978,977$473,320Total current liabilities.Noncurrent content liabilities2017$2,238,745 $1,665,4493,039,200 2,543,451441,595316,3855,719,540 4,525,2858,826,963 6,118,922418,281319,404531,608384,862$15,496,392 $11,348,473$2,764,751 $2,462,094332,161212,137281,676185,905448,930364,9873,827,518 3,225,1232,217,825 1.964,580 Total current assetsNoncurrent content assets, netProperty and equipment, netOther noncurrent assetsTotal assetsCurrent liabilitiesCurrent content liabilitiesAccounts payableAccrued expensesDeferred revenueTotal current liabilitiesNoncurrent content liabilitiesLong-term debtOther noncurrent liabilitiesTotal liabilitiesStockholders' equityPreferred stock, $0.001 par valueCommon stock, $0.001 par valueAccumulated other comprehensive lossRetained earningsTotal shareholders' equityTotal liabilities and shareholders' equityCombined federal and state statutory tax ratea. Compute ROE and ROA for 2018,Numerator DenominatorNumerator DenominatorNumerator DenominatorNumerator DenominatorRatioPMATFLROENumber%5,719,540 4,525,2858,826,9636,118,922418,281319,404531,608384,862$15,496,392 $11,348,473ROEAT$2,764,751 $2,462,094332,161 212,137185,905ROAb. Confirm that ROE equals ROE computed using the component measures for profit margin, assets turnover, and financial leverage: ROE = PM * AT * FL.Numerator DenominatorPM281,676448,930 364,9873,827,518 3,225,1232,217,825 1,964,5806,112,434 3,834,665129,231 135,2469,159,61412,287,008FL1,484,9451,179,629(11,553) (12,129)1,735,992 1,021,3593,209,384 2,188,859$15,496,392 $11,348,47322%09%0***ROE may be different due to roundingc. Compute adjusted ROA (assume a statutory tax rate of 22%).Numerator DenominatorAdjusted ROA

Return on Equity is a measure of profitability. It shows the relationship between the profits made…

Compute and Analyze Measures for DuPont Disaggregation Analysis The 2018 balance sheets and income statement for Netflix Inc. follow. Refer to these financial statements to answer the requirements. NETFLIX INC. Consolidated Statements of Earnings For Year Ended December 31, $thousands 2018 Revenues $9,318,661 Cost of revenues 5,880,847 Marketing 1,397,987 Technology and development 720,870 General and administrative 630,294 Operating income 688,663 Other income (expense) Interest expense Interest and other income Income before income taxes Provision for income taxes Net income (248,091) 41,725 482,297 8,977 $473,320

Compute and Analyze Measures for DuPont Disaggregation Analysis The 2018 balance sheets and income statement for Netflix Inc. follow. Refer to these financial statements to answer the requirements. NETFLIX INC. Consolidated Statements of Earnings For Year Ended December 31, $thousands 2018 Revenues $9,318,661 Cost of revenues 5,880,847 Marketing 1,397,987 Technology and development 720,870 General and administrative 630,294 Operating income 688,663 Other income (expense) Interest expense Interest and other income Income before income taxes Provision for income taxes Net income (248,091) 41,725 482,297 8,977 $473,320

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 55CE

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