Principles of Finance

In order to be successful, companies must leverage their spending in ways that will add to their value and propel them in the marketplace. In this portion of your report you will use the skills and content you mastered in your Adaptive Coach this week, to analyze the business conditions and begin to create the big financial picture of how the chosen company is spending their money and managing their investments in the future value of their organization through purchases and research and development.

Include the following content in this section.

1) Formulate the expected financial returns on Netflix and associated risks by completing the following calculations.
Calculate the Return on Equity (ROE) using the DuPont system.
Calculate the Constant Growth Stock Valuation (CGSV) and compare it to the current stock price. In addition to, your analysis should include the last three years comparison of the return on equity and industry average, highlighting the trends and possible reasons for the changes in the trends.

2) Research your company’s industry and evaluate what type(s) of capital constraints your company must consider in order to be competitive in the market. Explain the appropriate financial techniques that would be used in this evaluation.