Question

Describe how three of the ratios you calculated for Netflix compare to the general industry Debt...

Describe how three of the ratios you calculated for Netflix compare to the general industry

Debt Equity Ratio 2018 (1.98) 2017 (1.81) 2016 (1.26) - Industry Avg (36.8)

Price Earnings Ratio: 2018 (118.55) 2017 (220.95) 2016 (328.44) - Industry Avg (27,4)

Net Profit Margin: 2018 (7.67%) 2017 ( 4.78%) 2016 ( 2.11%) - Industry Avg ( 5.36%)

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Answer #1

The Debt equity ratio or leverage is less than industry average showing very less risk as compared to industry.

The Netflix PE ratio is very high as compared to industry average . However PE is continuously decreasing showing the reduction in attractiveness. However even with lower PE ratio the industry estimates that it;s future potential growth is way more than industry average.

Net profit margin earlier was less than industry average but in 2018 the net profit margin of Netflix has overshadowed the industry. Since indicates the profitability of Netflix is better than industry average.

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