Distribution policies and fiscal, Finance Basics

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Distribution Policies

 

Most Recent Fiscal Year

Fiscal Year

(-1)

Fiscal Year

(-2)

Fiscal Year

(-3)

Dividend/Share

N/A

N/A

N/A

N/A

Dividend Yield

N/A

N/A

N/A

N/A

Payout Ratio

N/A

N/A

N/A

N/A

  1. Based on this data, describe the firm's dividend policy in the past four years.  Is this policy appropriate for the firm?  Why or why not?
  2. Would you recommend any change of policy for this firm?  Why or why not?
  3. The firm's distributions include share repurchases as well as cash dividends.  Refer to the firm's statement of cash flows to find data on the aggregate dollar amount of dividends paid and shares repurchased, and report the results below.  You will also need to calculate distributions as percent of net income.

 

Most Recent Fiscal Year

Fiscal Year

(-1)

Fiscal Year

(-2)

Fiscal Year

(-3)

Dividends paid

0

0

0

0

Share repurchases

899,847

2,606,309

7,371,314

N/A

Net income

226,126,000

160,853,000

115,860,000

83,026,000

Distribution Ratio

N/A

N/A

N/A

N/A

  1. Does this change your view of the firm's dividend policy?  Would you recommend any change of policy for this firm?  Why or why not?

Netflix's current dividend policy is to invest future earnings in order to finance the growth and development of its business. Netflix states that it does not pay cash dividends on its common stock and does not expect in the future.


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