Netflix (Essay Sample)

(Name) (Instructors' name) (Course) (Date) Netflix Inc Netflix is a pioneer streaming service company that provides a broad array of films, TV shows, and documentaries (Venkatesan, Shea, and Daniel 1). Netflix is still the market leader in the subscription services market. Nonetheless, numerous other streaming service companies have emerged that pose a huge competitive threat. Its key competitors include Hulu, Disney plus, HBO Max, Paramount Plus, and Apple TV+ (Venkatesan, Shea, and Daniel 1). Despite the stiff competition in the streaming service industry, Netflix still controls a substantial market share. The company differentiates itself from its competitors by offering a broad selection of quality content. The company also has a database algorithm useful for separating content based on user history (Venkatesan, Shea, and Daniel 2). In addition, the firm has partnered with numerous production companies, allowing them to publish their content directly on its platform. All these factors give the company a competitive edge and allow Netflix to charge a premium price for its content. In light of this, a detailed summary of the firm's recent financial information will be provided. Summary of key financial information (SEC) 2021 (000)2020 (000)Global Revenue $29,696,844$24,996,056Profit/loss$5,031,335$2,829,314Current assets (A)$8,069,825$9,761,580Current liabilities (B)$8,488,966$7,805,785Shareholder's equity (K)$15,849,248$11,065,240The total liability (L)$28,735,415$28,215,119Current ratio (A/B)0.951.25Debt/equity ratio (L/K)1.812.55 Global consolidated revenue In 2021, Netflix reported total revenue from streaming and DVD services amounted to approximately $29 billion. In the previous year, the company's revenue was around $25 billion, indicating a 19% growth in consolidated revenue (SEC 20). The growth is attributed to the increased number of paying subscribers during that period. The company's executive also credits the increase in its average streaming revenue to a favorable foreign exchange rate considering the US dollar reported a strong growth in 2021, unlike in 2020 at the peak of the Covid-19 outbreak (SEC 21). Earnings Between 2020 and 2021, Netflix reported a 56% growth in its net profit. The strong growth of Netflix's net profit can also be attributed to an increase in the average number of paying subscribers (SEC 20). In 2020, the Covid-19 outbreak was at its peak, and there were a lot of uncertainties (Lozic 78). Thousands of people worldwide had been laid off due to the effects of the lockdown. Additionally, more people were forced to work from home. Streaming giants such as Netflix were not severely affected by the pandemic and even experienced increased demand for their services as compared to the previous years. However, in 2021 when millions of people had gotten used to working from home, Netflix earnings further strengthened, and this boosted investor confidence. The current ratio and a debt-to-equity ratio In 2021, Netflix had a current ratio of 0.95 compared to a ratio of 1.25 in the previous year. A high current ratio indicates a firm's ability to meet its short-term debt obligations u...