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Netflix Inc. (NFLX)

Short-term (Operating) Activity Analysis

Difficulty: Beginner

Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.

Ratios (Summary)
Receivables Turnover
Payables Turnover
Working Capital Turnover
Average Receivable Collection Period
Average Payables Payment Period

Ratios (Summary)

Netflix Inc., short-term (operating) activity ratios

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Turnover Ratios
	Receivables turnover
	Payables turnover
	Working capital turnover
	Average No. of Days
	Add: Average receivable collection period
	Less: Average payables payment period

Based on: 10-K (filing date: 2019-01-29), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-27), 10-K (filing date: 2016-01-28), 10-K (filing date: 2015-01-29).

Ratio	Description	The company
Receivables turnover	An activity ratio equal to revenue divided by receivables.
Payables turnover	An activity ratio calculated as cost of goods sold divided by payables.	Netflix Inc.’s payables turnover increased from 2016 to 2017 but then declined significantly from 2017 to 2018.
Working capital turnover	An activity ratio calculated as revenue divided by working capital.	Netflix Inc.’s working capital turnover deteriorated from 2016 to 2017 and from 2017 to 2018.

Ratio	Description	The company
Average receivable collection period	An activity ratio equal to the number of days in the period divided by receivables turnover.
Average payables payment period	An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.	Netflix Inc.’s average payables payment period declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.

Receivables Turnover

Netflix Inc., receivables turnover calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Selected Financial Data (USD $ in thousands)
	Revenues
	Accounts receivable
	Ratio
	Receivables turnover¹
	Benchmarks
	Receivables Turnover, Competitors
	Amazon.com Inc.
	Costco Wholesale Corp.
	eBay Inc.
	Home Depot Inc.
	Lowe’s Cos. Inc.
	Target Corp.
	TJX Cos. Inc.
	Walmart Inc.
	Receivables Turnover, Sector
	General Retailers
	Receivables Turnover, Industry
	Consumer Services

Based on: 10-K (filing date: 2019-01-29), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-27), 10-K (filing date: 2016-01-28), 10-K (filing date: 2015-01-29).

2018 Calculations

¹ Receivables turnover = Revenues ÷ Accounts receivable
= hidden ÷ hidden = hidden

Ratio	Description	The company
Receivables turnover	An activity ratio equal to revenue divided by receivables.

Payables Turnover

Netflix Inc., payables turnover calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Selected Financial Data (USD $ in thousands)
	Cost of revenues
	Accounts payable
	Ratio
	Payables turnover¹
	Benchmarks
	Payables Turnover, Competitors
	Amazon.com Inc.
	Costco Wholesale Corp.
	eBay Inc.
	Home Depot Inc.
	Lowe’s Cos. Inc.
	Target Corp.
	TJX Cos. Inc.
	Walmart Inc.
	Payables Turnover, Sector
	General Retailers
	Payables Turnover, Industry
	Consumer Services

Based on: 10-K (filing date: 2019-01-29), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-27), 10-K (filing date: 2016-01-28), 10-K (filing date: 2015-01-29).

2018 Calculations

¹ Payables turnover = Cost of revenues ÷ Accounts payable
= hidden ÷ hidden = hidden

Ratio	Description	The company
Payables turnover	An activity ratio calculated as cost of goods sold divided by payables.	Netflix Inc.’s payables turnover increased from 2016 to 2017 but then declined significantly from 2017 to 2018.

Working Capital Turnover

Netflix Inc., working capital turnover calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Selected Financial Data (USD $ in thousands)
	Current assets
	Less: Current liabilities
	Working capital
	Revenues
	Ratio
	Working capital turnover¹
	Benchmarks
	Working Capital Turnover, Competitors
	Amazon.com Inc.
	Costco Wholesale Corp.
	eBay Inc.
	Home Depot Inc.
	Lowe’s Cos. Inc.
	Target Corp.
	TJX Cos. Inc.
	Walmart Inc.
	Working Capital Turnover, Sector
	General Retailers
	Working Capital Turnover, Industry
	Consumer Services

Based on: 10-K (filing date: 2019-01-29), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-27), 10-K (filing date: 2016-01-28), 10-K (filing date: 2015-01-29).

2018 Calculations

¹ Working capital turnover = Revenues ÷ Working capital
= hidden ÷ hidden = hidden

Ratio	Description	The company
Working capital turnover	An activity ratio calculated as revenue divided by working capital.	Netflix Inc.’s working capital turnover deteriorated from 2016 to 2017 and from 2017 to 2018.

Average Receivable Collection Period

Netflix Inc., average receivable collection period calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Selected Financial Data
	Receivables turnover
	Ratio (no. of days)
	Average receivable collection period¹
	Benchmarks (no. of days)
	Average Receivable Collection Period, Competitors
	Amazon.com Inc.
	Costco Wholesale Corp.
	eBay Inc.
	Home Depot Inc.
	Lowe’s Cos. Inc.
	Target Corp.
	TJX Cos. Inc.
	Walmart Inc.
	Average Receivable Collection Period, Sector
	General Retailers
	Average Receivable Collection Period, Industry
	Consumer Services

Based on: 10-K (filing date: 2019-01-29), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-27), 10-K (filing date: 2016-01-28), 10-K (filing date: 2015-01-29).

2018 Calculations

¹ Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ hidden = hidden

Ratio	Description	The company
Average receivable collection period	An activity ratio equal to the number of days in the period divided by receivables turnover.

Average Payables Payment Period

Netflix Inc., average payables payment period calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Selected Financial Data
	Payables turnover
	Ratio (no. of days)
	Average payables payment period¹
	Benchmarks (no. of days)
	Average Payables Payment Period, Competitors
	Amazon.com Inc.
	Costco Wholesale Corp.
	eBay Inc.
	Home Depot Inc.
	Lowe’s Cos. Inc.
	Target Corp.
	TJX Cos. Inc.
	Walmart Inc.
	Average Payables Payment Period, Sector
	General Retailers
	Average Payables Payment Period, Industry
	Consumer Services

Based on: 10-K (filing date: 2019-01-29), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-27), 10-K (filing date: 2016-01-28), 10-K (filing date: 2015-01-29).

2018 Calculations

¹ Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ hidden = hidden

Ratio	Description	The company
Average payables payment period	An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.	Netflix Inc.’s average payables payment period declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.

	Netflix Inc.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

	All companies
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality