Netflix Inc (NFLX)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Inventory turnover	—	47.02	—	—	48.21	41.07	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Receivables turnover	16.23	30.03	29.33	29.29	20.57	25.39	26.13	27.90	13.04	21.91	34.96	35.97	32.50	35.72	36.46	42.35	33.68	38.41	35.33	39.52
Payables turnover	23.38	32.06	34.06	32.75	26.38	37.07	31.96	33.26	28.54	33.93	36.53	28.76	20.70	25.28	25.56	29.17	23.28	26.93	30.91	24.14
Working capital turnover	16.63	26.43	—	55.26	31.89	13.41	11.35	14.73	23.67	29.95	91.06	84.84	—	20.95	15.57	12.30	12.78	12.62	24.13	—

Activity ratios measure how efficiently a company manages its resources and assets to generate sales. Let's analyze the activity ratios of Netflix Inc based on the provided data:

1. Inventory Turnover: The inventory turnover ratio for Netflix has not been provided for most of the periods, except for September 30, 2023 (41.07) and September 30, 2024 (47.02). A higher inventory turnover ratio indicates that Netflix is efficiently selling its inventory and replenishing it quickly.

2. Receivables Turnover: The receivables turnover ratio measures how well Netflix is collecting on its credit sales. The ratio fluctuates over the periods, ranging from a high of 42.35 on March 31, 2021, to a low of 13.04 on December 31, 2022. A higher turnover ratio implies that Netflix is collecting its receivables faster.

3. Payables Turnover: The payables turnover ratio indicates how quickly Netflix is paying its suppliers. The ratio varies over time, with a high of 37.07 on September 30, 2023, and a low of 20.70 on December 31, 2021. A higher turnover ratio suggests that Netflix is managing its payments effectively.

4. Working Capital Turnover: The working capital turnover ratio reflects how efficiently Netflix is utilizing its working capital to generate revenue. The ratio is inconsistent, with a notable increase on June 30, 2022 (91.06), indicating a significant improvement in working capital management efficiency.

In conclusion, by analyzing these activity ratios, we can see that Netflix Inc has shown variations in its efficiency in managing inventory, receivables, payables, and working capital over the periods provided. High turnover ratios generally indicate effective management and utilization of resources, while lower ratios may suggest inefficiencies or changes in business operations.

Average number of days

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	—	7.76	—	—	7.57	8.89	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	22.48	12.16	12.44	12.46	17.74	14.38	13.97	13.08	27.99	16.66	10.44	10.15	11.23	10.22	10.01	8.62	10.84	9.50	10.33	9.24
Number of days of payables	days	15.61	11.39	10.72	11.15	13.84	9.85	11.42	10.98	12.79	10.76	9.99	12.69	17.64	14.44	14.28	12.51	15.68	13.55	11.81	15.12

Netflix Inc's Days of Inventory on Hand (DOH) ratio has shown improvement over the years, with the latest available data showing that the company holds inventory for approximately 7.76 days as of December 31, 2024, suggesting efficient management of inventory levels.

In terms of Days of Sales Outstanding (DSO), Netflix Inc's collection period has fluctuated but has generally increased from 9.24 days as of March 31, 2020, to 22.48 days as of December 31, 2024. This suggests that Netflix is taking longer to collect its receivables, which may indicate potential issues with credit policies or customer payment delays.

The Number of Days of Payables ratio for Netflix Inc has remained relatively steady over the years, with the company taking around 15.61 days to pay its payables as of December 31, 2024. This indicates that Netflix is managing its payment obligations effectively and maintaining stable relationships with its suppliers.

Overall, Netflix Inc's activity ratios reveal that the company has efficiently managed its inventory levels and payables, but there may be room for improvement in reducing its collection period to enhance its cash flow management and liquidity position.

Long-term

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Fixed asset turnover	24.47	23.97	24.03	23.27	22.61	21.85	21.83	22.58	22.61	22.93	22.78	21.97	22.44	23.47	24.91	25.99	26.03	28.76	30.09	32.90
Total asset turnover	0.73	0.72	0.74	0.72	0.69	0.66	0.63	0.64	0.65	0.66	0.67	0.67	0.67	0.67	0.67	0.66	0.64	0.62	0.61	0.61

The fixed asset turnover ratio of Netflix Inc has been gradually decreasing over the years, from 32.90 in March 2020 to 24.47 in December 2024. This indicates that the company is generating less revenue for every dollar invested in fixed assets.

On the other hand, the total asset turnover ratio has shown more stability, fluctuating between 0.61 and 0.74 during the same period. This suggests that Netflix is efficiently utilizing its total assets to generate revenue.

Overall, the decreasing trend in the fixed asset turnover ratio may warrant further investigation into the company's fixed asset management and utilization efficiency, while the stable total asset turnover ratio reflects a consistent ability to generate revenue relative to its total asset base.