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Netflix Financial Strength

: 6 (As of Mar. 2022)
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Netflix has the Financial Strength Rank of 6.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

Netflix's Interest Coverage for the quarter that ended in Mar. 2022 was 10.51. Netflix's debt to revenue ratio for the quarter that ended in Mar. 2022 was 0.46. As of today, Netflix's Altman Z-Score is 3.28.


Competitive Comparison

For the Entertainment subindustry, Netflix's Financial Strength, along with its competitors' market caps and Financial Strength data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Netflix Financial Strength Distribution

For the Media - Diversified industry and Communication Services sector, Netflix's Financial Strength distribution charts can be found below:

* The bar in red indicates where Netflix's Financial Strength falls into.



Netflix Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

Netflix's Interest Expense for the months ended in Mar. 2022 was $-188 Mil. Its Operating Income for the months ended in Mar. 2022 was $1,972 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Mar. 2022 was $14,535 Mil.

Netflix's Interest Coverage for the quarter that ended in Mar. 2022 is

Interest Coverage=-1*Operating Income (Q: Mar. 2022 )/Interest Expense (Q: Mar. 2022 )
=-1*1971.626/-187.579
=10.51

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

Netflix's Debt to Revenue Ratio for the quarter that ended in Mar. 2022 is

Debt to Revenue Ratio=Total Debt (Q: Mar. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(0 + 14534.561) / 31471.068
=0.46

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

Netflix has a Z-score of 3.28, indicating it is in Safe Zones. This implies the Z-Score is strong.

Good Sign:

Altman Z-score of 3.28 is strong.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Netflix  (NAS:NFLX) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

Netflix has the Financial Strength Rank of 6.


Netflix Financial Strength Related Terms

Thank you for viewing the detailed overview of Netflix's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.


Netflix Business Description

Netflix logo
Industry
Address
100 Winchester Circle, Los Gatos, CA, USA, 95032
Netflix's primary business is a streaming video on demand service now available in almost every country worldwide except China. Netflix delivers original and third-party digital video content to PCs, Internet-connected TVs, and consumer electronic devices, including tablets, video game consoles, Apple TV, Roku, and Chromecast. In 2011, Netflix introduced DVD-only plans and separated the combined streaming and DVD plans, making it necessary for subscribers who want both to have separate plans.
Executives
Hastings Reed director, officer: Co-CEO 100 WINCHESTER CIRCLE LOS GATOS CA 95032
Neumann Spencer Adam officer: Chief Financial Officer SIERRA INCOME CORPORATION 375 PARK AVE., SUITE 3304 NEW YORK NY 10152
Whetstone Rachel officer: Chief Communications Officer 185 TUSCALOOSA AVENUE ATHERTON CA 94027
Rice Susan E director 100 WINCHESTER CIRCLE LOS GATOS CA 95032
Belmer Rodolphe director 100 WINCHESTER CIRCLE LOS GATOS CA 95032
Neal Jessica officer: Chief Talent Officer 100 WINCHESTER CIRCLE LOS GATOS CA 95032
Sweeney Anne M director C/O 100 WINCHESTER CIRCLE LOS GATOS CA 95032
Peters Gregory K officer: COO and Chief Product Officer C/O NETFLIX, INC. 100 WINCHESTER CIRCLE LOS GATOS CA 95032
Hyman David A officer: Chief Legal Officer C/O NETFLIX, INC. 100 WINCHESTER CIRCLE LOS GATOS CA 95032
Sarandos Theodore A director, officer: Co-CEO & Chief Content Officer C/O NETFLIX, INC 100 WINCHESTER CIRCLE LOS GATOS CA 95032
Dopfner Mathias director C/O TIME WARNER INC. ONE TIME WARNER CENTER NEW YORK NY 10019
Kilgore Leslie J director 100 WINCHESTER CIRCLE LOS GATOS CA 95032
Haley Timothy M director 3000 SAND HILL ROAD, 2-290 MENLO PARK CA 94025
Barton Richard N director C/O IAC 152 WEST 57TH STREET NEW YORK NY 10019
Smith Bradford L director MICROSOFT CORPORATION ONE MICROSOFT WAY REDMOND WA 98052-6399

Netflix Headlines

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