Case Netflix Here below you will find selected financial data of Netflix. Use this data to...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Case Netflix Here below you will find selected financial data of Netflix. Use this data to study a hypothetical situation, when the otherwise very quick pace of acquiring new subscribers, at Netflix, significantly slows down and comes to a virtual standstill, as a result of competition with new streaming platforms, such as Disney +. What kind of change in market structure would that represent? How would such a slowdown, and then standstill impact the business of Netflix and its financials? In the process, calculate total liabilities of Netflix, and calculate the average cost of capital in those liabilities, i.e. the average interest that Netflix pays on borrowed capital. Cash, cash equivalents and short-term investments Total content assets, net Total assets Non-current content liabilities Total content liabilities Total liabilities Total stockholders' equity As of December 31, (in $thousands) 2018 2017 Consolidated Balance Sheets $3 794 483 $20 112 140 $25.974 400 $3 759 026 $8 445 045 ? $5 238 765 $2 822 795 $14 681 989 $19 012 742 $3 329 796 $7 502 837 ? $3 581 956 Additions to streaming content assets Interest expense Market capitalization Revenues Cost of revenues Marketing Technology and development General and administrative Operating income Consolidated Cash Flows ($13 043 437) ($420 493) $110 620 000 ($9 805 763) ($238 204) $2 369 469 $1 221 814 $630 294 $1 605 226 $80 590 000 Consolidated statement $15 794 341 $9 967 538 of operations $11 692 713 $8 033 000 $1 436 281 $953 710 $431 043 $838 679 Case Netflix Here below you will find selected financial data of Netflix. Use this data to study a hypothetical situation, when the otherwise very quick pace of acquiring new subscribers, at Netflix, significantly slows down and comes to a virtual standstill, as a result of competition with new streaming platforms, such as Disney +. What kind of change in market structure would that represent? How would such a slowdown, and then standstill impact the business of Netflix and its financials? In the process, calculate total liabilities of Netflix, and calculate the average cost of capital in those liabilities, i.e. the average interest that Netflix pays on borrowed capital. Cash, cash equivalents and short-term investments Total content assets, net Total assets Non-current content liabilities Total content liabilities Total liabilities Total stockholders' equity As of December 31, (in $thousands) 2018 2017 Consolidated Balance Sheets $3 794 483 $20 112 140 $25.974 400 $3 759 026 $8 445 045 ? $5 238 765 $2 822 795 $14 681 989 $19 012 742 $3 329 796 $7 502 837 ? $3 581 956 Additions to streaming content assets Interest expense Market capitalization Revenues Cost of revenues Marketing Technology and development General and administrative Operating income Consolidated Cash Flows ($13 043 437) ($420 493) $110 620 000 ($9 805 763) ($238 204) $2 369 469 $1 221 814 $630 294 $1 605 226 $80 590 000 Consolidated statement $15 794 341 $9 967 538 of operations $11 692 713 $8 033 000 $1 436 281 $953 710 $431 043 $838 679
Expert Answer:
Answer rating: 100% (QA)
The change in market structure would represent a monopoly A monopoly is a market structure in which there is only one firm that produces a product or service This firm is the only one that can supply ... View the full answer
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1259024962
6th Canadian edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim
Posted Date:
Students also viewed these accounting questions
-
At Green Construction, earnings before interest and taxes (EBIT) for the year just ended were $70 million and are not expected to grow. The company pays $ 10 million in interest each year on its...
-
A firm with earnings before interest and taxes of $500,000 needs $1 million of additional funds. If it issues debt, the bonds will mature after 20 years and have a coupon of 10 percent. The firm...
-
A project has earnings before interest and taxes of $5,750, fixed costs of $50,000, a selling price of $13 a unit, and a sales quantity of 11,500 units. Depreciation is $7,500. What is the variable...
-
E. Blood Flow Through the Kidneys Trace blood flow through the kidneys. Start at the renal artery and number the blood vessels in sequence. afferent arteriole arcuate artery arcuate vein efferent...
-
1. There seem to be many advantages to behaviour-based interviewing. Are there disadvantages as well? Explain. 2. Why is behaviour-based interviewing becoming so common? 3. Consider the following...
-
The following list contains activities that may be added or subtracted from operating profit when reconciling to cash flows from operating activities. Indicate whether each activity is added,...
-
Determine the torsional strain energy stored in the tapered rod when it is subjected to the torque \(\mathbf{T}\). The rod is made of material having a modulus of rigidity of \(G\). L 2ro To T
-
Spiffy Dry Cleaners has recently changed management, and the new owners want to revise the current layout. The store performs six main services: (1) Laundry, (2) Dry cleaning, (3) Pressing, (4)...
-
A room has dimensions 5.5 m (width) 7 m (length) 3.5 m (height). The walls consist of gypsum wallboard, the ceiling has suspended acoustic tile, and the floor is covered with vinyl tile on concrete....
-
The bar codes above represent locations in a warehouse. How many units would be left in each location? If you picked 250 units from location 00000113774360000 If you picked 250 units from location 00...
-
A Toyota motors in Pakistan is facing problems for their suppliers. Suppliers are not able to provide the engine components. Propose strategy for Toyota to solve this problem? Find any two companies...
-
How are all rocks related to one another?
-
What law of physics relates heat flow to plate tectonics? Discuss how this law underlies plate tectonics and other everyday processes.
-
Why are earthquakes common in subduction zones?
-
Are plastic and nylon minerals?
-
What kinds of rocks can undergo metamorphism?
-
emphasized by the 1. Famous Facelift Company, a local manufacturer of beauty care products, has just come out with a new "facial creme" which it plans to sell through area retailers. Its expectation...
-
The time to assemble the first unit on a production line is 10 hours. The learning rate is 0.94. Approximately how long will it take for the seventh unit to be assembled? The number of hours needed...
-
The tables here show Dynamic Mattress's year-end 20l0 balance sheet and its income statement for 2011. Use these tables (and Table 20.3) to work out a statement of sources and uses of cash and the...
-
The authorized share capital of the Alfred Cake Company is 100,000 shares. Currently 20,000 shares are issued and outstanding. The equity is currently shown in the company's books as follows: Common...
-
A real estate appraiser is assessing the value of a piece of land in Vancouver. Currently the land is unoccupied but is zoned for commercial use. Plans have been approved to build a five-storey...
-
What are the main characteristics of the various systems of social differentiation within egalitarian and rank societies?
-
The United States and Canada are two of only 33 countries that have jus soli, the right to citizenship of any individual born on their soil. Why do you think this right is so limited, and do you...
-
What are the responsibilities of the governments toward the stateless? Do the United States and other powerful nations have responsibilities toward groups such as the Rohingya? Following the...
Study smarter with the SolutionInn App