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Find the information for this case in the file 2. Netflix FY21 10-K Excerpts.pdf. Using only the provided financial statement excerpts from Netflixs FY21 10-K, answer the questions below.
Use Porters Five Forces to analyze Netflix and its position in the industry. Be sure to use information from the Item 1 disclosures from the 10-K in your assessment. (Your answer should be succinct and can be presented in an exhibit style format.)
What is the book value of equity of Netflix as of the end of fiscal years 2020 and 2021?
What is Netflixs market value of equity as of the end of fiscal year 2021? (NFLX closed at $612.09 on Dec. 31, 2021.)
Calculate the ratio of the market value of equity to the book value of equity as of Dec. 31, 2021. Identify two primary reasons why you think the market value is different from the book value in the case of Netflix.
If Netflix recognized all payments from customers as revenue upon receipt, what would Revenues have been in fiscal years 2020 and 2021?
Why does Stock-based compensation expense show up as a positive adjustment in the operating section of the Statement of Cash Flows for fiscal year 2021?
On pages 26-27 of the Netflix 10-K, there is a calculation of Non-GAAP free cash flow. A generic definition of free cash flow that you might see is Cash flows from operation activities (CFO) Cash outlflows from investing activities (CFI). For both fiscal years 2020 and 2021, discuss whether Netflixs Non-GAAP calculation is better or worse than if they had simply used CFO CFI.
Why did Interest and other income (expense) increase from an expense of $618,441 in FY20 to income of $411,214 in FY21?
What was the average price paid for stock issued in fiscal year 2020 and 2021? How does this compare to the average market price of the stock during these two years? (Use the average 2020 Netflix daily closing stock price of $446.45 and average 2021 daily closing stock price of $558.04 in your calculations.)
