Netflix Inc (NFLX)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.26 | 0.29 | 0.30 | 0.33 | 0.40 |
| Debt-to-capital ratio | 0.36 | 0.41 | 0.41 | 0.48 | 0.59 |
| Debt-to-equity ratio | 0.56 | 0.69 | 0.69 | 0.93 | 1.43 |
| Financial leverage ratio | 2.17 | 2.37 | 2.34 | 2.81 | 3.55 |
Netflix Inc's solvency ratios have shown consistent improvement over the years, indicating a strong financial position. The Debt-to-assets ratio has decreased from 0.40 in 2020 to 0.26 in 2024, demonstrating a declining reliance on debt to finance assets. Similarly, the Debt-to-capital ratio has decreased from 0.59 in 2020 to 0.36 in 2024, indicating a lower proportion of debt in the overall capital structure.
Furthermore, the Debt-to-equity ratio has decreased from 1.43 in 2020 to 0.56 in 2024, reflecting a decreasing level of debt relative to equity. This signifies a healthier balance between debt and equity financing. Additionally, the Financial leverage ratio has decreased from 3.55 in 2020 to 2.17 in 2024, indicating a decreasing level of financial risk and leverage in the company's operations.
Overall, the downward trend in these solvency ratios reflects Netflix Inc's ability to manage its debt levels effectively, strengthen its financial position, and enhance its solvency over the years. This improvement is a positive sign for investors and stakeholders, indicating a decreased financial risk and enhanced stability in the company's financial structure.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 14.49 | 9.87 | 8.45 | 8.63 | 5.17 |
Based on the provided data, Netflix Inc's interest coverage ratio has shown a positive trend over the years. The interest coverage ratio, which measures the company's ability to meet its interest obligations with its operating income, was 5.17 in December 2020 and improved to 8.63 in December 2021. Subsequently, it remained relatively stable around the range of 8.45 to 9.87 from December 2022 to December 2023. By December 2024, the interest coverage ratio increased significantly to 14.49, indicating that Netflix Inc's ability to cover its interest expenses with its operating income strengthened notably. Overall, the trend suggests that Netflix's ability to pay interest expenses from its operating income has been improving consistently, reflecting a healthy financial position in terms of managing debt obligations.