Netflix Inc (NFLX)
Working capital turnover
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 33,723,290 | 32,742,520 | 32,126,440 | 31,909,280 | 31,615,550 | 31,472,820 | 31,030,700 | 30,402,340 | 29,697,850 | 28,632,970 | 27,585,140 | 26,391,650 | 24,996,060 | 23,819,050 | 22,628,310 | 21,403,140 | 20,156,440 | 18,875,850 | 17,630,320 | 16,614,470 |
| Total current assets | US$ in thousands | 9,918,130 | 10,779,500 | 11,506,300 | 10,482,600 | 9,266,470 | 8,816,900 | 7,840,780 | 8,098,020 | 8,069,820 | 9,415,790 | 9,604,280 | 10,107,500 | 9,761,580 | 9,826,480 | 8,564,140 | 6,447,780 | 6,178,500 | 5,327,760 | 5,877,160 | 4,168,910 |
| Total current liabilities | US$ in thousands | 8,860,660 | 8,338,720 | 8,675,800 | 8,316,070 | 7,930,970 | 7,765,920 | 7,500,020 | 7,739,660 | 8,488,970 | 8,049,250 | 7,832,890 | 7,961,770 | 7,805,780 | 7,939,800 | 7,626,420 | 7,853,720 | 6,855,700 | 7,257,900 | 6,933,980 | 6,857,810 |
| Working capital turnover | 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 | — | — | — | — | — |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $33,723,290K ÷ ($9,918,130K – $8,860,660K)
= 31.89
The working capital turnover of Netflix Inc. has shown fluctuations over the past eight quarters. The working capital turnover ratio measures how effectively a company is using its working capital to generate revenue. A higher ratio indicates that the company is efficiently using its working capital to support sales.
The working capital turnover for the most recent quarter, ending December 31, 2023, has significantly increased to 31.89, indicating an improvement in the company's efficiency in utilizing its working capital to generate sales. This is a positive sign as it suggests that Netflix is able to generate a higher level of sales with a given amount of working capital, potentially leading to improved profitability.
In the prior quarters, the working capital turnover showed fluctuations, with a considerable decline in the second and third quarters of 2022 followed by a steep increase in the fourth quarter of 2022. This erratic behavior may indicate changes in Netflix's working capital management or sales performance during those periods.
Overall, the recent significant increase in working capital turnover bodes well for Netflix's operational efficiency and potential for generating revenue from its working capital. However, it's important to monitor future quarters to assess if this trend is sustainable and indicative of long-term operational improvement.