Netflix Inc (NFLX)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 5,407,990 | 4,491,920 | 5,116,230 | 2,761,400 | 1,866,920 |
| Total stockholders’ equity | US$ in thousands | 20,588,300 | 20,777,400 | 15,849,200 | 11,065,200 | 7,582,160 |
| ROE | 26.27% | 21.62% | 32.28% | 24.96% | 24.62% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $5,407,990K ÷ $20,588,300K
= 26.27%
Netflix Inc.'s return on equity (ROE) has shown a fluctuating trend over the past five years. The ROE, which measures the company's ability to generate profits from shareholders' equity, increased to 26.27% in 2023 from 21.62% in 2022. This indicates that the company's profitability relative to shareholders' investment improved in the most recent fiscal year.
Comparing this to previous years, the ROE was notably higher in 2021 at 32.28%, suggesting a peak in profitability during that period. However, the ROE in 2023 remains higher than the levels observed in 2020 and 2019, which were 24.96% and 24.62% respectively, indicating sustained overall profitability.
It is essential to note that while the recent ROE has increased, investors should continue to monitor the company's ability to maintain and build upon its profitability in the future. Additionally, analyzing the underlying factors contributing to the changes in ROE is crucial for a comprehensive understanding of Netflix Inc.'s financial performance.