Netflix, Inc. — Earnings Quality Grade C
NFLX · Communication Services
Some red flags
Screening Summary
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 16 days, change +4 days YoY
AR growth 52.1% exceeds revenue growth 15.9%
Revenue 15.9%, CFFO 37.9%. Cash follows revenue
Expense Quality
No material inventory
CapEx growth 56.6% is >2x revenue growth 15.9%
SG&A/Gross Profit = 23.7%, excellent (<30%)
Gross margin 48.5%, change +2.4pp. Stable
Cash Flow Quality
CFFO/NI = 0.92. Profits backed by cash
FCF $9.5B, FCF/NI = 0.86
Accruals ratio = 1.5%. Low accruals
Cash $9.1B covers 63% of debt $14.5B
Balance Sheet Health
Goodwill+Intangibles $32.8B = 123% of equity. Over 50%
Debt/EBITDA = 0.5x. Healthy
Other assets 20.2% vs revenue 15.9%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles change 1% YoY. Normal
Manipulation Score
M-Score = -1.98 (grey zone)
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-08