After reviewing the financial statements filed by Netflix at the end of January 2016 discussing the previous year, ending December 2015, there are several recommendations that can be made regarding actions that Netflix should consider for improvement next year. While it is possible that these recommendations were already made by someone else in the company and changes may have been made to address these areas, the new financials will not be available until January of 2017, creating room for error. In spite of this, the following recommendations may be made:

Your 20% discount here!

Use your promo and get a custom paper on
Recommendations for Netflix

Order Now
Promocode: SAMPLES20

Netflix (2016) indicated that their revenue cycles were cyclical, based on periods in which new technology purchases were likely and occurring based on the announcement of new content releases. The quarterly stock prices do indicate a certain degree of fluctuation, but less fluctuation than would be expected if their revenue cycle was truly cyclical. In light of this, additional steps should be taken to effectively analyze what makes an individual likely to sign up, and what factors play a role in the decision to cancel.

Netflix (2016) indicates a consistent revenue growth from 2011 to 2015, going up by just under or just over a million per year, though there is a heavy fluctuation in operating income that does not correlate to those increases. In 2011, the operating income was $376,068, while in 2012 that dropped to $49,992, but the following year showed a rise to 228,347 (Netflix, 2016).

Fluctuations such as these indicate discrepancies, possibly in transcription, but still possibly in other areas, as an operating income of less than $50,000 would not cover the ~3,700 employees in the company (Netflix, 2016). Similar disparities are present in the net cash used in and provided by operating activities (Netflix, 2016). To this end, it is recommended that an audit of all financials for the past six years be conducted to ensure accuracy and transparency.