Compare Companies --- Netflix (NFLX) vs. GEO Holdings (TOK) Compute financial ratios, time value, variables, and returns using industry standard tools for optimizing financial success. Analyze corporate financial data in evaluating past and future financial performances.

Industry Averages

A. Obtain current industry averages of three of the financial calculations above for both companies and add this information to your spreadsheet for comparison. Ensure the accuracy and organization of your data.

B. In this context, how is each companyâs financial health? How do these two companies compare to one another? Consider the appropriate date range you should use.

Netflix Inc. (NMS: NFLX) 2016 2015 2014

Price Earnings Ratio = Market Value Per Share/EPS 0.98 0.97 0.97

Debt Equity Ratio = Total Liability/Shareholder Equity 4.07 3.59 2.8

Free Cash Flow 1467576 1809330 1113608

Earnings Per Share 0.44 0.29 0.634

Return on Equity = Net Income/Sharholder Equity 0.0697 0.0552 0.1436

Net Profit Margin = Net Profit/Revenue 0.0211 0.0181 0.0485

Geo Holdings Corp (TOK: 2681) 2016 2015 2014

Price Earnings Ratio = Market Value Per Share/EPS 0.99 1 -54.4

Debt Equity Ratio = Total Liability/Shareholder Equity 1.01 1.03 0.37

Free Cash Flow 37683 32052 19869

Earnings Per Share 205.78 137.99 -70

Return on Equity = Net Income/Sharholder Equity 16.33% 11.70% 6.86%

Net Profit Margin = Net Profit/Revenue 3.94% 2.71% 1.54%

cyanspider759
Book: Financial management

1. Review the requirements of the Chapter 3 Mini-Case, parts b through j. Then apply those requirements to do an analysis of Brinker International, which is a real company. Don't complete the minicase itself, just Brinker. Do the analysis on the basis of the figures for the most recent year. For part g, use the 2 most recent years. Download 10K financial statements for the most recent year for Brinker. A good source is the company's home page. Also compare the Brinker ratios to the industry averages and commend on significant differences. You'll note that some of the company's ratios you calculate won't agree with those found on the web page. Ratios are calculated in different ways, however, you should use the formulas in the text. Also, you won't find all of the industry averages, but you will find most of them. You'll need the company's stock price for several of the ratios; use the fiscal year end price. The company's stock symbol is EAT.

(Visit Brinker web site) (Links to an external site.)

(Access industry averages) (Links to an external site.)

Note:

All quantitative work must be done in Excel; Word is not acceptable. You can download Brinker's 10K (annual financial statements they send the Securities and Exchange Commission each year) at the following site:

http://phx.corporate-ir.net/phoenix.zhtml?c=119205&p=irol-sec

You then need to take the various items off the financial statements such as Revenues, Inventory, etc. and calculate the ratios to answer the case questions.

b. calculate the 2014 current and quick ratios based on the projected balance sheet and income statement data. What can you say about the companyâs liquidity position in 2012, 2013, and as projected for 2014? We often think of rations as being useful 1. To managers to help run the business, 2. To bankers for credit analysis, and 3. To stockholders for stock valuation. Would these different types of analysts have an equal interest in the liquidity ratios?

c. Calculate the 2014 inventory turnover, days sales outstanding, fixed assets turnover, and total assets turnover. How does Brinker utilization of assets stack up against that of other firms in its industry?

d. calculate the 2014 debt ratio, liabilities to assets ratio, times-interest-earned, and EBITDA coverage ratios. How does Brinker compare with the industry with respect to financial leverage: what can you conclude from these ratios:

e. Calculate the 2014 profit margin, basic earning power, return on assets, and return on equity. What can you say about these ratios?

f. Calculate the 2014 price/earnings ratio, price/cash flow ratio, and market/book ratio. Do these ratios indicate the investors are expected to have a high or low opinion of the company?

g. Perform a common size analysis and percentage change analysis. What do these analyses tell you about Brinker?

h. use the extended DuPont equation to provide a summary and overview of Brinkerâs financial condition as projected for 2014. What are the firmâs major strengths and weaknesses?

i. What are some potential problems and limitations of financial ratio analysis?

j. What are some qualitative factors that analysts should consider when evaluating a companyâs likely future financial performance.
Part III Overview To make corporate finance decisions, take an advanced finance course, or pursue a career in finance, you will need to understand basic concepts. This includes going beyond the number crunching and reading graphs in order to analyze various financial indicators. This analysis can lead to many important decisions in your financial career. For this part of the final project, you will be given a scenario in which you are asked to illustrate your financial knowledge and analysis skills.

This part of the assessment addresses the following course outcomes: Â· Analyze the roles and responsibilities of financial managers in confirming compliance with federal and shareholder requirements Â· Differentiate between various financial markets and institutions by comparing and contrasting options when selecting appropriate private and corporate investments Â· Compute financial ratios, time value, variables, and returns using industry standard tools for optimizing financial success Â· Analyze corporate financial data for multiple companies in evaluating past and future financial performances

Part III Prompt The results of both sections of your employment examination have finally been received, and you were offered the position. You have a few important decisions to make before you can formally accept or decline the position. When composing your answers to these decisions, ensure that they are cohesive and read like a short essay. Your submission must address the following critical elements:

I. School Versus Work A. The school you would like to attend costs $100,000. To help finance your education, you need to choose whether or not to sell your 1,000 shares of Apple stock, 1,000 EE Savings Bonds (with $100 denominations and 4.25% coupon rate) that are five years from their 30-year maturity date, or a combination of both. Provide the appropriate data and calculations that you would perform to make this decision.

B. What are the advantages and disadvantages of selling a combination of stocks and bonds? Be sure to support your answers.

C. Suppose that you choose to sell your stocks, bonds, or a combination of both. What is your choice, and what is your financial reasoning behind this choice? Consider supporting your answer with quantitative data.

D. Suppose that you choose to accept the job. What is your financial reasoning behind this choice? Be sure to support your answer with quantitative data.

II. Bonus Versus Stock A. The company has offered you a $5,000 bonus, which you may receive today, or 100 shares of the companyâs stock, which has a current stock price of $50 per share. Mathematically, what is the best choice? Why?

B. What are the advantages and disadvantages of each option? Be sure to support your answers.

C. What would you ultimately choose to do? What is your financial reasoning behind this choice? Consider supporting your answer with quantitative data.

III. Compliance A. While investigating the shares offered to you by your potential boss, you discover that the company you are considering working for is not registered as required under the Securities Act of 1933. How does this influence you as a potential employee and as a potential shareholder? Be sure to reference any applicable statutes or laws.

B. You know that accepting this job may eventually lead to a promotion into the role of the financial manager. As the potential financial manager, what federal and shareholder requirements would you need to be familiar with in order to ensure that you are being completely compliant?

Question

Compare Companies --- Netflix (NFLX) vs. GEO Holdings (TOK) Compute financial ratios, time value, variables, and returns using industry standard tools for optimizing financial success. Analyze corporate financial data in evaluating past and future financial performances.

Industry Averages

A. Obtain current industry averages of three of the financial calculations above for both companies and add this information to your spreadsheet for comparison. Ensure the accuracy and organization of your data.

B. In this context, how is each companyâs financial health? How do these two companies compare to one another? Consider the appropriate date range you should use.

Netflix Inc. (NMS: NFLX)

2016

2015

2014

Price Earnings Ratio = Market Value Per Share/EPS

0.98

0.97

Debt Equity Ratio = Total Liability/Shareholder Equity

Return on Equity = Net Income/Sharholder Equity

0.0697

0.0552

0.1436

Net Profit Margin = Net Profit/Revenue

0.0211

0.0181

0.0485

Geo Holdings Corp (TOK: 2681)	2016	2015	2014
Price Earnings Ratio = Market Value Per Share/EPS	0.99	1	-54.4
Debt Equity Ratio = Total Liability/Shareholder Equity	1.01	1.03	0.37
Free Cash Flow	37683	32052	19869
Earnings Per Share	205.78	137.99	-70
Return on Equity = Net Income/Sharholder Equity	16.33%	11.70%	6.86%
Net Profit Margin = Net Profit/Revenue	3.94%	2.71%	1.54%

cyanspider759

Book: Financial management

1. Review the requirements of the Chapter 3 Mini-Case, parts b through j. Then apply those requirements to do an analysis of Brinker International, which is a real company. Don't complete the minicase itself, just Brinker. Do the analysis on the basis of the figures for the most recent year. For part g, use the 2 most recent years. Download 10K financial statements for the most recent year for Brinker. A good source is the company's home page. Also compare the Brinker ratios to the industry averages and commend on significant differences. You'll note that some of the company's ratios you calculate won't agree with those found on the web page. Ratios are calculated in different ways, however, you should use the formulas in the text. Also, you won't find all of the industry averages, but you will find most of them. You'll need the company's stock price for several of the ratios; use the fiscal year end price. The company's stock symbol is EAT.

(Visit Brinker web site) (Links to an external site.)

(Access industry averages) (Links to an external site.)

Note:

All quantitative work must be done in Excel; Word is not acceptable. You can download Brinker's 10K (annual financial statements they send the Securities and Exchange Commission each year) at the following site:

http://phx.corporate-ir.net/phoenix.zhtml?c=119205&p=irol-sec

You then need to take the various items off the financial statements such as Revenues, Inventory, etc. and calculate the ratios to answer the case questions.

b. calculate the 2014 current and quick ratios based on the projected balance sheet and income statement data. What can you say about the companyâs liquidity position in 2012, 2013, and as projected for 2014? We often think of rations as being useful 1. To managers to help run the business, 2. To bankers for credit analysis, and 3. To stockholders for stock valuation. Would these different types of analysts have an equal interest in the liquidity ratios?

c. Calculate the 2014 inventory turnover, days sales outstanding, fixed assets turnover, and total assets turnover. How does Brinker utilization of assets stack up against that of other firms in its industry?

d. calculate the 2014 debt ratio, liabilities to assets ratio, times-interest-earned, and EBITDA coverage ratios. How does Brinker compare with the industry with respect to financial leverage: what can you conclude from these ratios:

e. Calculate the 2014 profit margin, basic earning power, return on assets, and return on equity. What can you say about these ratios?

f. Calculate the 2014 price/earnings ratio, price/cash flow ratio, and market/book ratio. Do these ratios indicate the investors are expected to have a high or low opinion of the company?

g. Perform a common size analysis and percentage change analysis. What do these analyses tell you about Brinker?

h. use the extended DuPont equation to provide a summary and overview of Brinkerâs financial condition as projected for 2014. What are the firmâs major strengths and weaknesses?

i. What are some potential problems and limitations of financial ratio analysis?

j. What are some qualitative factors that analysts should consider when evaluating a companyâs likely future financial performance.

Part III Overview To make corporate finance decisions, take an advanced finance course, or pursue a career in finance, you will need to understand basic concepts. This includes going beyond the number crunching and reading graphs in order to analyze various financial indicators. This analysis can lead to many important decisions in your financial career. For this part of the final project, you will be given a scenario in which you are asked to illustrate your financial knowledge and analysis skills.

This part of the assessment addresses the following course outcomes: Â· Analyze the roles and responsibilities of financial managers in confirming compliance with federal and shareholder requirements Â· Differentiate between various financial markets and institutions by comparing and contrasting options when selecting appropriate private and corporate investments Â· Compute financial ratios, time value, variables, and returns using industry standard tools for optimizing financial success Â· Analyze corporate financial data for multiple companies in evaluating past and future financial performances

Part III Prompt The results of both sections of your employment examination have finally been received, and you were offered the position. You have a few important decisions to make before you can formally accept or decline the position. When composing your answers to these decisions, ensure that they are cohesive and read like a short essay. Your submission must address the following critical elements:

I. School Versus Work A. The school you would like to attend costs $100,000. To help finance your education, you need to choose whether or not to sell your 1,000 shares of Apple stock, 1,000 EE Savings Bonds (with $100 denominations and 4.25% coupon rate) that are five years from their 30-year maturity date, or a combination of both. Provide the appropriate data and calculations that you would perform to make this decision.

B. What are the advantages and disadvantages of selling a combination of stocks and bonds? Be sure to support your answers.

C. Suppose that you choose to sell your stocks, bonds, or a combination of both. What is your choice, and what is your financial reasoning behind this choice? Consider supporting your answer with quantitative data.

D. Suppose that you choose to accept the job. What is your financial reasoning behind this choice? Be sure to support your answer with quantitative data.

II. Bonus Versus Stock A. The company has offered you a $5,000 bonus, which you may receive today, or 100 shares of the companyâs stock, which has a current stock price of $50 per share. Mathematically, what is the best choice? Why?

B. What are the advantages and disadvantages of each option? Be sure to support your answers.

C. What would you ultimately choose to do? What is your financial reasoning behind this choice? Consider supporting your answer with quantitative data.

III. Compliance A. While investigating the shares offered to you by your potential boss, you discover that the company you are considering working for is not registered as required under the Securities Act of 1933. How does this influence you as a potential employee and as a potential shareholder? Be sure to reference any applicable statutes or laws.

B. You know that accepting this job may eventually lead to a promotion into the role of the financial manager. As the potential financial manager, what federal and shareholder requirements would you need to be familiar with in order to ensure that you are being completely compliant?

Netflix Inc. (NMS: NFLX)

Exchange rate used is that of the Year End reported date


As Reported Annual Balance Sheet
Report Date	12/31/2016	12/31/2015	12/31/2014
Currency	USD	USD	USD
Audit Status	Not Qualified	Not Qualified	Not Qualified
Consolidated	Yes	Yes	Yes
Scale	Thousands	Thousands	Thousands

Cash & cash equivalents	1467576	1809330	1113608
Short-term investments	266206	501385	494888
Current content library, net	-	-	2125702
Current content assets, net	3726307	2905998	-
Other current assets	260202	215127	206271
Total current assets	5720291	5431840	3940469
Non-current content library, net	-	-	2773326
Non-current content assets, net	7274501	4312817	-
Information technology assets	185345	194054	189274
Furniture & fixtures	32185	30914	25758
Building	40681	40681	40681
Leasehold improvements	107945	107793	57339
DVD operations equipment	70152	88471	89144
Capital work-in-progress	108296	8845	12495
Property & equipment, gross	544604	470758	414691
Less: accumulated depreciation	294209	297346	264816
Property & equipment, net	250395	173412	149875
Other non-current assets	341423	284802	192981
Total assets	13586610	10202871	7056651
Current content liabilities	3632711	2789023	2117241
Accounts payable	312842	253491	201581
Accrued expenses	197632	140389	69746
Deferred revenue	443472	346721	274586
Total current liabilities	4586657	3529624	2663154
Non-current content liabilities	2894654	2026360	1575832
Long-term debt	3364311	2371362	900000
Other non-current liabilities	61188	52099	59957
Total liabilities	10906810	7979445	5198943
Common stock	1599762	1324809	60
Additional paid-in capital	-	-	1042810
Foreign currency	-47966	-42502	-4615
Change in unrealized gains on available for sale securities	-599	-806	169
Accumulated other comprehensive income (loss)	-48565	-43308	-4446
Retained earnings (accumulated deficit)	1128603	941925	819284
Total stockholders' equity (deficiency)	2679800	2223426	1857708

Geo Holdings Corp (TOK: 2681)

Due to changes with International Financial Reporting Standards (IFRS), recent financials statement presentations have been adjusted to meet this standard. Please note the original historical presentations have remained in the original format

Exchange rate used is that of the Year End reported date


As Reported Annual Balance Sheet
Report Date	03/31/2016	03/31/2015	03/31/2014
Currency	JPY	JPY	JPY
Audit Status	Not Qualified	Not Qualified	Not Qualified
Consolidated	Yes	Yes	Yes
Scale	Millions	Millions	Thousands
Cash & deposits	37683	32052	19869000
Trade notes & accounts receivables	4100	4077	3992000
Merchandise	24894	23834	23495000
Deferred tax assets	2156	1806	1773000
Other current assets	5462	7181	5942000
Allowance for doubtful accounts	-281	-292	343000
Total current assets	74015	68659	54729000
Asset for rent, gross	100974	104514	104647000
Accumulated depreciation - asset for rent	-95154	-97475	96055000
Asset for rent, net	5820	7038	8591000
Buildings & structures, gross	40872	39984	39478000
Accumulated depreciation - buildings & structures	-27470	-26362	25976000
Buildings & structures, net	13402	13622	13501000
Land, net	5844	6356	6651000
Leased assets, gross	2176	3519	4576000
Accumulated depreciation - leased assets	-681	-1764	2588000
Leased assets, net	1495	1754	1988000
Other property, plant & equipment, gross	24838	20562	17708000
Accumulated depreciation - other property, plant & equipment	-18391	-15292	13236000
Other property, plant & equipment, net	6447	5270	4471000
Total property, plant & equipment	33010	34043	35205000
Total intangible assets	1865	1277	2028000
Investment securities	926	1002	1266000
Long-term loans receivable	2250	6682	6628000
Lease & guarantee deposits	14905	14735	15034000
Deferred tax assets	3342	3774	2845000
Other investments & other assets	1222	1188	1760000
Allowance for doubtful accounts	-1332	-3751	3917000
Total investments & other assets	21315	23632	23617000
Total non-current assets	56192	58952	60851000
Total assets	130207	127612	115581000
Trade accounts payable	12631	13540	13124000
Current portion of long-term borrowings	8333	7097	8754000
Current portion of bonds	149	149	249000
Income taxes payable	4815	265	1170000
Reserve for bonuses	1665	1420	1135000
Other current liabilities	10135	12595	10279000
Total current liabilities	37731	35068	34713000
Bonds	105	254	403000
Long-term borrowings	19509	21843	13910000
Lease liabilities	1612	1660	1590000
Deferred tax liabilities	23	22	26000
Asset retirement obligations	4406	3994	3898000
Other non-current liabilities	1857	1554	1839000
Total non-current liabilities	27514	29329	21668000
Total liabilities	65246	64398	56381000
Capital stock	8871	8615	8603000
Capital surplus	3283	6090	6078000
Retained earnings	52542	49998	44381000
Treasury shares	-	-1979	334000
Total shareholders' equity	64697	62724	58729000
Valuation difference on available-for-sale securities	166	282	297000
Loss (gain) on deferred hedge	-15	-	297000
Total accumulated other comprehensive income	150	282	172000
Stock acquisition rights	113	206	59199000
Net assets	64961	63214	115581000
Total liabilities & net assets	130207	127612

Netflix Inc. (NMS: NFLX)

Exchange rate used is that of the Year End reported date


As Reported Annual Income Statement
Report Date	12/31/2016	12/31/2015	12/31/2014
Currency	USD	USD	USD
Audit Status	Not Qualified	Not Qualified	Not Qualified
Consolidated	Yes	Yes	Yes
Scale	Thousands	Thousands	Thousands

Revenues	8830669	6779511	5504656
Cost of revenues	6029901	4591476	3752760
Marketing expenses	991078	824092	607186
Technology & development expenses	852098	650788	472321
General & administrative expenses	577799	407329	269741
Operating income (loss)	379793	305826	402648
Interest expense	150114	132716	50219
Interest & other income (expense)	30828	-31225	-3060
Income before income taxes - United States	188078	95644	325081
Income (loss) before income taxes - foreign	72429	46241	24288
Income (loss) before income taxes	260507	141885	349369
Current tax provision (benefit) - federal	54315	52557	86623
Current tax provision (benefit) - state	5790	-1576	9866
Current tax provision (benefit) - foreign	60571	26918	16144
Total current tax provision (benefit)	120676	77899	112633
Deferred tax provision (benefit) - federal	-24383	-37669	-10994
Deferred tax provision (benefit) - state	-14080	-17635	-17794
Deferred tax provision (benefit) - foreign	-8384	-3351	-1275
Total deferred tax provision (benefit)	-46847	-58655	-30063
Provision for (benefit from) income taxes	73829	19244	82570
Net income (loss)	186678	122641	266799
Weighted average shares outstanding - basic	428822	425889	420546
Weighted average shares outstanding - diluted	438652	436456	431893
Year end shares outstanding	430054.212	427940.44	422910.887
Net income (loss) per share - basic	0.44	0.29	0.634
Net income (loss) per share - diluted	0.43	0.28	0.617
Number of full time employees	4500	3500	2189
Number of part time & temporary employees	200	400	261
Total number of employees	4700	3700	2450
Number of common stockholders	290	237	203
Foreign currency translation adjustments	-5464	-37887	-

Geo Holdings Corp (TOK: 2681)

Exchange rate used is that of the Year End reported date


As Reported Annual Income Statement
Report Date	03/31/2016	03/31/2015	03/31/2014
Currency	JPY	JPY	JPY
Audit Status	Not Qualified	Not Qualified	Not Qualified
Consolidated	Yes	Yes	Yes
Scale	Millions	Millions	Thousands
Total revenue	267910	270308	262324000
Cost of sales	-151798	-157825	152301000
Gross profit	116112	112483	110022000
Selling, general & administrative expenses	-99559	-102925	100823000
Operating income	16552	9558	9198000
Interest & dividend income	49	114	111000
Rental income	1268	1167	1193000
Other non-operating income	1043	1062	453000
Total non-operating income	2361	2343	1758000
Interest expense	-230	-231	332000
Rental expenses	-759	-609	595000
Transfer to reserve for doubtful account	-	-227	-
Other non-operating expenses	-100	-803	-
Total non-operating expenses	-1089	-1871	684000
Ordinary income	17824	10030	1612000
Imapirment loss	-1319	-1543	9344000
Other extraordinary losses	-13	-	203000
Total extraordinary losses	-1333	-1543	203000
Income before income taxes	16491	8486	1218000
Income taxes - current	-5779	-2074	514000
Income taxes - deferred	-147	925	87000
Total income taxes	-5927	-1149	1821000
Profit	10563	7337	7726000
Profit attributable to owners of parent	10563	7337	4027000
Average number of shares outstanding - basic	51.331	53.169	-39000
Average number of shares outstanding - diluted	51.623	53.29	3987000
Year end shares outstanding	48.244	52.295	3738000
Earnings per share - basic	205.78	137.99	-70000
Earnings per share - diluted	204.62	137.68	3808000
Number of full time employees	3825	3579	53996.5
Number of part time employees	10421	10114	54066.499
Number of common stockholders	57105	65030	53996.5

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