Netflix Inc (NFLX)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 10,417,600 | 6,905,230 | 5,970,140 | 6,605,720 | 3,966,850 |
| Long-term debt | US$ in thousands | 13,798,400 | 14,143,400 | 14,353,100 | 14,693,100 | 15,809,100 |
| Total stockholders’ equity | US$ in thousands | 24,743,600 | 20,588,300 | 20,777,400 | 15,849,200 | 11,065,200 |
| Return on total capital | 27.03% | 19.88% | 16.99% | 21.63% | 14.76% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $10,417,600K ÷ ($13,798,400K + $24,743,600K)
= 27.03%
Netflix Inc's return on total capital has shown a steady increase over the period from December 31, 2020, to December 31, 2024. The ratio stood at 14.76% in 2020 and improved consistently to reach 27.03% by the end of 2024. This indicates that the company has been efficiently generating returns from the total capital employed in its operations. The higher return on total capital suggests that Netflix is effectively utilizing its resources to generate profits for its shareholders. Overall, the increasing trend in the return on total capital reflects positively on the company's operational efficiency and financial performance over the specified period.