Growth rates and hypothetically, Finance Basics

Assignment Help:

Growth Rates

Most Recent Fiscal Year

Fiscal Year

(-1)

Fiscal Year

(-2)

Fiscal Year

(-3)

Annual Revenue Growth

48.18%

29.48

22.39

13.22

Annual Net Income Growth

40.58

38.83

39.55

24.65

Annual Free Cash Flow Growth

42.40

34.89

2.56

106.37

1. What trends, if any, are apparent in these ratios?

2. Netflix's revenue has consistently increased since 2008, and its net income has been positive for the last four years.

3. Hypothetically, is it possible for sales to increase while net income declines? Why or why not?

4. Yes, it is possible. If costs such as higher labor cost or increased advertising or promotional expenses exist, it is possible for net income declines while sales to increases.

5. Hypothetically, is it possible for net income to decline while free cash flow increases? Why or why not? 


Related Discussions:- Growth rates and hypothetically

Mm dividend irrelevance theory, MM Dividend Irrelevance Theory Such wa...

MM Dividend Irrelevance Theory Such was advanced via Modigliani and Miller in 1961.  The theory asserts to a firm's dividend policy has no effect on cost of capital and on its

Meaning of a sentence, on this sentence: "all have an interest in understan...

on this sentence: "all have an interest in understanding what drives trade" please explain what''s meaning of "what drives trade"?

Fixed assets or sales ratio, Last year Nymphe Technologies had $450 million...

Last year Nymphe Technologies had $450 million of sales and $270 million of fixed assets, so its FA/Sales ratio was 60%.  However, its fixed assets were used at only 75% of capacit

Valuation of securities, Valuation of Securities The previous methods ...

Valuation of Securities The previous methods were perfect for valuing the entire business however it is also essential to ascertain the value of part of a business namely shar

Depreciation, Which depreciation method would produce the higher NPV and ho...

Which depreciation method would produce the higher NPV and how much higher would it be?

Determination of the coupon rate, The partners are still unhappy about one ...

The partners are still unhappy about one of the features of your analysis, namely your assumption that the coupon rate of the bond is equal to 6% per annum. Their thinking is that

Capital structure ratio, Capital Structure Ratio Gearing/Leverage/Capi...

Capital Structure Ratio Gearing/Leverage/Capital Structure Ratio The ratio signifies the extent whether the firm has borrowed fixed charge capital to finance the

Investment analysis, Investment Analysis Any type of company will inve...

Investment Analysis Any type of company will invest finance for the sake of deriving a return that is useful for four main purposes as: 1. To reward the owners or shareholder

Constant amount per share or fixed d.p.s., Constant amount per share or fix...

Constant amount per share or fixed D.P.S. 1. The DPS is fixed in total amount of irrespective of the earnings level. These generate certainty and are consequently preferred vi

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd