Financial statement analysis and common stock valuation

Balance Sheet: Liabilities and Stockholders’ Equity
Quarterly Data

The liabilities and stockholders’ equity reports major classes and amounts of external claims on assets and owners’ capital contributions, and other internally generated sources of capital.

Capital Asset Pricing Model (CAPM)

CAPM is a theory concentrated with deriving the expected rates of return on risky assets based on the assets’ systematic risk levels. Systematic risk is the variability of returns that is due to macroeconomic factors that affect all risky assets. It cannot be eliminated by diversification.

• Rates of Return
• Variance and Covariance
• Systematic Risk (β) Estimation
• Expected Rate of Return

Balance Sheet: Assets
Quarterly Data

The assets reports major classes and amounts of resources owned or controlled by Netflix Inc..

Analysis of Geographic Areas

Netflix Inc. operates in 2 regions: United States and International.

• Area Asset Turnover
• Revenues
• Long-lived tangible assets

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
Quarterly Data

Liabilities and stockholders’ equity components shown as percentage of total liabilities and stockholders’ equity.

Statement of Comprehensive Income

Comprehensive income is the change in equity (net assets) of Netflix Inc. during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

Balance Sheet: Liabilities and Stockholders’ Equity

The liabilities and stockholders’ equity reports major classes and amounts of external claims on assets and owners’ capital contributions, and other internally generated sources of capital.

Cash Flow Statement
Quarterly Data

The cash flow statement provides information about Netflix Inc. cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on Netflix Inc. balance sheet.

Analysis of Short-term (Operating) Activity Ratios
Quarterly Data

Evaluates revenues and output generated by the Netflix Inc. assets. Operating performance ratios describe the relationship between the Netflix Inc. level of operations and the assets needed to sustain operating activities.

• Short-term Activity Ratios (Summary)
• Payables Turnover
• Working Capital Turnover
• Average Payables Payment Period

Common Stock Valuation Ratios
Quarterly Data

Relative valuation technique determine the value of Netflix Inc. by comparing it to similar entities (like industry or sector) on the basis of several relative ratios that compare its stock price to relevant variables that affect the stock value, such as earnings, book value, and sales.

• Historical Valuation Ratios (Summary)
• Price to Earnings (P/E)
• Price to Operating Profit (P/OP)
• Price to Sales (P/S)
• Price to Book Value (P/BV)

Cash Flow Statement

The cash flow statement provides information about Netflix Inc. cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on Netflix Inc. balance sheet.

Common-Size Income Statement
Quarterly Data

Income statement components (revenues and expenses) shown as percentage of total sales.