Netflix Inc (NFLX)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 8,711,630 | 5,407,990 | 4,491,920 | 5,116,230 | 2,761,400 |
| Total stockholders’ equity | US$ in thousands | 24,743,600 | 20,588,300 | 20,777,400 | 15,849,200 | 11,065,200 |
| ROE | 35.21% | 26.27% | 21.62% | 32.28% | 24.96% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $8,711,630K ÷ $24,743,600K
= 35.21%
Netflix Inc's return on equity (ROE) has shown variability over the past five years. The ROE increased steadily from 24.96% as of December 31, 2020, to 35.21% as of December 31, 2024. This upward trend indicates that the company has been effectively utilizing shareholder equity to generate profits. The higher ROE suggests that Netflix is efficiently using its investors' capital to generate earnings growth. However, it is important to note that the ROE dipped in 2022 to 21.62%, which could be a point of concern for investors as it indicates a decrease in profitability relative to the equity invested. Overall, the increasing trend in ROE over the years demonstrates Netflix's ability to generate good returns for its shareholders through efficient allocation of resources.