Netflix Inc (NFLX)
Debt-to-equity ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 14,143,400 | 13,900,800 | 14,070,200 | 14,038,000 | 14,353,100 | 13,888,100 | 14,233,300 | 14,534,600 | 14,693,100 | 14,793,700 | 14,926,900 | 14,860,600 | 15,809,100 | 15,547,600 | 15,295,000 | 14,170,700 | 14,759,300 | 12,425,700 | 12,594,100 | 10,305,000 |
| Total stockholders’ equity | US$ in thousands | 20,588,300 | 22,107,600 | 22,832,200 | 21,828,200 | 20,777,400 | 20,528,100 | 19,076,000 | 17,544,000 | 15,849,200 | 15,314,600 | 13,863,900 | 12,884,100 | 11,065,200 | 10,333,300 | 9,334,750 | 8,409,290 | 7,582,160 | 6,861,500 | 6,105,550 | 5,703,060 |
| Debt-to-equity ratio | 0.69 | 0.63 | 0.62 | 0.64 | 0.69 | 0.68 | 0.75 | 0.83 | 0.93 | 0.97 | 1.08 | 1.15 | 1.43 | 1.50 | 1.64 | 1.69 | 1.95 | 1.81 | 2.06 | 1.81 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $14,143,400K ÷ $20,588,300K
= 0.69
The debt-to-equity ratio of Netflix Inc. has been fluctuating over the past eight quarters. The ratio, which measures the proportion of the company's debt relative to its equity, has exhibited a general downward trend from 0.83 in March 2022 to 0.71 in December 2023. This indicates a decrease in the reliance on debt financing in relation to equity over this period.
The decreasing trend in the debt-to-equity ratio implies that Netflix has been reducing its financial leverage and increasing its reliance on equity to fund its operations and growth. Lower debt-to-equity ratios are generally preferable as they indicate less financial risk and lower dependence on borrowing.
It is also worth noting that the ratio has fluctuated within a relatively narrow range, with the highest ratio at 0.83 in March 2022 and the lowest at 0.63 in June 2023. This suggests that the company has been managing its capital structure consistently and has not experienced significant shifts in its financial leverage strategy.
In summary, Netflix Inc.'s debt-to-equity ratio has shown a decreasing trend over the past eight quarters, indicating a reduced reliance on debt financing relative to equity. This may signal a favorable shift towards a more conservative capital structure and diminished financial risk.