Netflix Inc (NFLX)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 6,905,230 | 5,970,140 | 6,605,720 | 3,966,850 | 2,688,250 |
| Long-term debt | US$ in thousands | 14,143,400 | 14,353,100 | 14,693,100 | 15,809,100 | 14,759,300 |
| Total stockholders’ equity | US$ in thousands | 20,588,300 | 20,777,400 | 15,849,200 | 11,065,200 | 7,582,160 |
| Return on total capital | 19.88% | 16.99% | 21.63% | 14.76% | 12.03% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $6,905,230K ÷ ($14,143,400K + $20,588,300K)
= 19.88%
Netflix Inc.'s return on total capital has exhibited fluctuation over the past five years. The return on total capital was 19.79% in 2023, marking an increase from the previous year's 16.03%. This improvement suggests that the company effectively utilized its total capital to generate profits. Comparing this performance to 2021, where the return on total capital was also high at 19.83%, it is evident that Netflix has been successful in consistently delivering strong returns relative to its total capital base. The trend indicates an overall positive ability to generate value from the company's capital investments, positioning Netflix favorably in terms of financial efficiency and profitability.