Question

Refer to the 2017 annual reports of Netflix and Spotify, please answer the following question.

Briefly discuss the differences between Netflix and Spotify's financial statements.

Answer 1

Financial ratios of the year 2017 were used to make a comparative study of the
two companies. Netflix holds an edge in the liquidity ratio, whereas Spotify in
leverage and turnover ratios. Similarly, Netflix was the most profitable. Spotify had a
very poor average collection period while latter had the best one. Netflix had the best rate of return basically because they made a lot of profit by selling their property valued at 692 million US dollar. Meanwhile Spotify was found to have a better rate or return and a lower risk compared to its competitor.