Common-Size Balance Sheet: Assets
Netflix Inc., common-size consolidated balance sheet: assets
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The financial data presents notable shifts in the asset composition over the five-year period ending December 31, 2024. There is a discernible trend towards a reduced proportion of current assets relative to total assets, particularly evident in the earlier years, followed by a rebound in the final year.
- Cash and Cash Equivalents
- Starting at 20.89% of total assets at the end of 2020, the cash and cash equivalents ratio decreased significantly by 2022 to a low of 10.59%. A moderate recovery is seen in 2023 and 2024, climbing back to approximately 14.6%, suggesting a strategic adjustment towards holding more liquid assets after a period of decline.
- Short-term Investments
- Short-term investments were not reported until 2022, where they began at 1.88%, drastically reduced to 0.04% in 2023 but then increased substantially to 3.32% in 2024. This volatility could indicate opportunistic allocation to short-duration assets reflecting a dynamic investment strategy.
- Trade Receivables and Prepaid Expenses
- Trade receivables consistently increased from 1.56% in 2020 to a peak of 2.64% in 2023, followed by a slight decline to 2.49% in 2024. Prepaid expenses also showed a steady upward trend from 0.52% to around 0.84% by 2023, then marginally declined to 0.81%. This suggests a growing credit extended to customers and prepaid costs up to 2023 with slight adjustments thereafter.
- Other Current Assets
- This category rose overall from 3.96% in 2020 to 6.56% in 2024, despite a dip in 2023. The increase supports the observation that non-cash current assets are expanding as part of the total asset base.
- Total Current Assets
- Current assets as a portion of total assets declined from 24.85% in 2020 to a low of 18.1% in 2021, with moderate growth in subsequent years reaching 24.43% in 2024. This pattern indicates initial liquidation or reallocation of current assets, followed by renewed accumulation.
- Content Assets
- Composite content assets, net, maintained a dominant share of total assets, peaking at 69.35% in 2021 before gradually decreasing to 60.51% by 2024. Within this category:
- Licensed Content
- A consistent decline is noted from 35% in 2020 to 23.16% in 2024, suggesting a strategic move away from licensed content or a shift towards in-house content.
- Produced Content
- Produced content, net, increased from 29.62% to a maximum of 41.17% in 2022 before slightly declining to 37.35% by 2024, indicating a strengthening focus on owned or produced intellectual property.
- Subcategories of Produced Content
- The portion of released content grew steadily from 14.79% to 20.2% in 2023 and remained relatively stable, while content in production rose sharply in 2021 and peaked at 21.11% in 2022, before falling to around 17.37% in 2024. Content in development and pre-production generally declined over the period, pointing to a potential tightening of early-stage investments.
- Property and Equipment
- The share of property and equipment remained relatively stable, fluctuating narrowly around 3%, indicating consistent investment in fixed assets in relation to total assets.
- Other Non-Current Assets
- These assets increased steadily, from 8.08% in 2020 to 12.09% in 2024, highlighting a trend toward diversification or growth in less liquid, longer-term investments.
- Total Non-Current Assets
- Non-current assets rose from 75.15% to a peak of 81.9% in 2021, then reciprocally declined to 75.57% by 2024, reflecting fluctuating investment balances between long-term and current assets over the reviewed period.
Overall, the data indicate a strategic progression emphasizing produced content over licensed content, with a variable but generally strong commitment to non-current assets. Liquidity levels, as reflected by cash and equivalents and short-term investments, have been managed prudently with recent increases. The gradual decline in development-stage content may suggest efficiency improvements or selective scaling of the content pipeline. The stability in property and equipment and growth in other non-current assets support a balanced asset allocation policy focused on supporting content creation and delivery capabilities.