Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Long-term Activity Ratios (Summary)
Netflix Inc., long-term (investment) activity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 10-K (reporting date: 2025-12-31), 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).
An analysis of long-term activity ratios reveals several noteworthy trends between 2021 and 2025. Generally, the company demonstrates a moderate level of efficiency in utilizing its assets to generate revenue, with some ratios exhibiting improvement over the period while others remain relatively stable or fluctuate.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio remained consistently high throughout the observed period, fluctuating between 22.44 and 24.47. A slight increase is noted from 2021 to 2024, peaking at 24.47 in 2024, before decreasing slightly to 22.54 in 2025. This suggests a generally efficient use of net fixed assets to generate sales, with a temporary peak in efficiency in 2024.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- This ratio demonstrates a clear upward trend from 7.88 in 2021 to 10.73 in 2025. The increase is consistent year-over-year, indicating a growing efficiency in utilizing fixed assets, including those acquired through operating leases and right-of-use assets, to generate revenue. This suggests a strategic shift or improvement in asset utilization practices.
- Total Asset Turnover
- The total asset turnover ratio shows a gradual improvement over the five-year period. Starting at 0.67 in 2021, it increased to 0.81 in 2025. While the increases are modest, the consistent upward trend suggests an improving ability to generate sales from the company’s total asset base. The largest increase occurred between 2023 and 2024.
- Equity Turnover
- The equity turnover ratio exhibits more volatility. It decreased from 1.87 in 2021 to 1.52 in 2022, then increased to 1.64 in 2023, followed by a slight decrease to 1.58 in 2024, and finally increased to 1.70 in 2025. This suggests a fluctuating relationship between revenue generated and the amount of equity employed, potentially influenced by changes in financial leverage or profitability. The ratio ends the period at a level close to its initial value.
In summary, the company appears to be improving its efficiency in utilizing both its fixed and total assets to generate revenue. The inclusion of operating lease and right-of-use assets in the fixed asset turnover calculation reveals a significant positive trend. The equity turnover ratio, while more volatile, demonstrates a return to levels similar to those observed at the beginning of the period.
Net Fixed Asset Turnover
Netflix Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | ||||||
| Property and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Media & Entertainment | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Net fixed asset turnover = Revenues ÷ Property and equipment, net
= ÷ =
2 Click competitor name to see calculations.
The net fixed asset turnover ratio exhibits a generally stable pattern over the observed period, with a slight increase followed by a modest decline. Revenues demonstrate consistent growth annually, while property and equipment, net, also increase, though at a slower pace. This relationship drives the observed ratio behavior.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio remained relatively consistent between 2021 and 2023, holding at approximately 22.44 to 22.61. This indicates that for every dollar invested in net fixed assets, approximately $22.44 to $22.61 in revenue was generated during those years.
- A notable increase is observed in 2024, with the ratio rising to 24.47. This suggests improved efficiency in utilizing fixed assets to generate revenue during this period. The increase in the ratio is likely attributable to the higher rate of revenue growth relative to the growth in net fixed assets.
- In 2025, the ratio decreased to 22.54. While still a strong value, this represents a slight reduction from the 2024 peak. This decrease coincides with a continued increase in net property and equipment, suggesting that the company is investing in additional fixed assets, but the revenue growth is not keeping pace at the same rate as the prior year.
Overall, the company demonstrates a strong ability to generate revenue from its fixed assets. The fluctuations in the ratio suggest a dynamic investment strategy and varying levels of operational efficiency in asset utilization from year to year.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Netflix Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | ||||||
| Property and equipment, net | ||||||
| Operating lease right-of-use assets, net (included in Other non-current assets) | ||||||
| Property and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Media & Entertainment | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenues ÷ Property and equipment, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
The analysis reveals a consistent upward trend in net fixed asset turnover, alongside increasing revenues and relatively stable net fixed assets over the observed period. This suggests improving efficiency in asset utilization.
- Revenues
- Revenues demonstrate a steady increase from US$29,697,844 thousand in 2021 to US$45,183,036 thousand in 2025. This represents a cumulative growth of approximately 52.2% over the five-year period, indicating strong revenue generation.
- Property and Equipment, Net (including operating lease, right-of-use asset)
- Net property and equipment experienced a slight decrease from US$3,770,026 thousand in 2021 to US$3,568,343 thousand in 2023, before increasing to US$4,211,511 thousand in 2025. The overall increase from 2021 to 2025 is approximately 11.7%. This suggests a period of optimization followed by reinvestment in fixed assets.
- Net Fixed Asset Turnover (including operating lease, right-of-use asset)
- The net fixed asset turnover ratio increased consistently throughout the period, rising from 7.88 in 2021 to 10.73 in 2025. This indicates that the company is generating more revenue for each dollar invested in fixed assets. The increase from 2021 to 2022 was 10.5%, from 2022 to 2023 was 8.3%, from 2023 to 2024 was 11.4%, and from 2024 to 2025 was 2.5%. While the rate of increase slowed in the final year, the overall trend remains positive. This improvement in turnover could be attributed to increased sales volume, more efficient asset management, or a combination of both.
The combined trends suggest that the company is effectively leveraging its fixed assets to generate revenue. The increasing turnover ratio, coupled with revenue growth, points to improved operational efficiency and a potentially strengthening competitive position.
Total Asset Turnover
Netflix Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| Total Asset Turnover, Sector | ||||||
| Media & Entertainment | ||||||
| Total Asset Turnover, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Total asset turnover = Revenues ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The total asset turnover ratio exhibits an increasing trend over the five-year period. Initially, the ratio stood at 0.67 in 2021, decreased slightly to 0.65 in 2022, and then began a consistent upward trajectory.
- Total Asset Turnover Trend
- From 2022 to 2023, the ratio increased to 0.69, indicating improved efficiency in asset utilization. This positive trend continued into 2024, with the ratio reaching 0.73. The most significant increase occurred between 2024 and 2025, where the ratio rose to 0.81.
The observed increase in the total asset turnover ratio suggests that the company is becoming more effective at generating revenue from its asset base. This could be due to a number of factors, including improved operational efficiency, better asset management, or increased demand for its products or services. The acceleration of the increase in 2025 is particularly noteworthy and warrants further investigation to determine the underlying drivers.
- Revenue and Asset Relationship
- Revenues increased consistently throughout the period, rising from US$29,697,844 thousand in 2021 to US$45,183,036 thousand in 2025. Total assets also increased, but at a slower rate than revenues, particularly in the later years. This disparity between revenue growth and asset growth is a key contributor to the rising total asset turnover ratio.
The consistent growth in revenue coupled with a relatively stable asset base demonstrates an enhanced ability to generate sales per dollar of assets employed. This is a positive indicator of financial performance and operational effectiveness.
Equity Turnover
Netflix Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | ||||||
| Stockholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| Equity Turnover, Sector | ||||||
| Media & Entertainment | ||||||
| Equity Turnover, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Equity turnover = Revenues ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The equity turnover ratio exhibits a fluctuating pattern over the five-year period. While revenues demonstrate consistent growth, the relationship between revenues and stockholders’ equity is not linear, as reflected in the equity turnover figures.
- Equity Turnover Trend
- The equity turnover ratio decreased from 1.87 in 2021 to 1.52 in 2022, indicating a less efficient utilization of equity to generate revenue. A subsequent increase to 1.64 in 2023 suggests a partial recovery in efficiency. The ratio experienced a slight decline to 1.58 in 2024 before rising again to 1.70 in 2025.
The initial decrease in equity turnover in 2022 coincides with a substantial increase in stockholders’ equity, which grew at a faster rate than revenues. This suggests the company may have been reinvesting capital or issuing equity without an immediate proportional increase in sales. The subsequent fluctuations appear to be influenced by the relative growth rates of revenues and stockholders’ equity.
- Revenue Growth vs. Equity Growth
- Revenues increased consistently year-over-year. However, the growth in stockholders’ equity was particularly pronounced between 2021 and 2022. While equity growth moderated in 2023, it resumed in 2024 and 2025. The interplay between these growth rates directly impacts the equity turnover ratio.
The increase in equity turnover in 2025 indicates that the company is becoming more effective at generating revenue from its equity base. However, the ratio remains below the 2021 level, suggesting that while efficiency has improved, it has not fully returned to its prior state. Continued monitoring of this ratio, alongside revenue and equity trends, is recommended to assess long-term capital utilization effectiveness.