The following data were taken from Netflix, Inc.’s 2010 annual report. All dollar amounts are in millions.

Required

a. For each year, compute Netflix’s debt to assets ratio, return on assets ratio, and return on equity ratio. You will need to compute total liabilities.

b. Did the company’s level of financial risk increase or decrease from 2009 to 2010?

c. In which year did the company appear to manage its assets most efficiently?

d. Do the above ratios support the concept of financial leverage? Explain.

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Fiscal Years December 31, 2010 Ending December 31, 2009 Total assets Total liabilities Stockholders' equity Net income $982,067 S679,734 290,164 160,853 199,143 115,860