Following is financial information for NetFlix, Inc., for the year ended December 31, 2016 (in thousands)....

Following is financial information for NetFlix, Inc., for the year ended December 31, 2016 (in thousands). Use the parsimonious method of forecasting to project net operating

profit after tax (NOPAT) and net operating assets (NOA) for 2017 through 2020, inclusive.

Sales	$ 8,830,669
Net operating profit after tax (NOPAT)	261,828
Operating assets	11,852,828
Operating liabilities	7,542,499

Assume that net operating profit margin (NOPM) and net operating asset turnover (NOAT) will remain at 2016 levels. Assume that sales will grow at 5% per year.

Required:

Use the parsimonious method of forecasting to project net operating profit after tax (NOPAT) and net operating assets (NOA) for 2014 through 2017, inclusive.

Expert Solution

	Parsimoniuos Projection
	2016 Dec 31 position
	Details	Amt $/%
1	Sales	$ 8,830,669
2	NOPAT	$ 261,828.00
3	Net Income %=2/1	2.965%
4	Operating Assets	$ 11,852,828
5	Poperating Liabilities	$ 7,542,499
6	Net operating Assets	$ 4,310,329
7	NOAT=1/6=	2.0487
8	Net Operating Assets =Sales/NOAT

Netflix
Parsimoniuos Method of Projection
Year	2016	2017	2018	2019	2020
Details
Sales =Prev year sales +5%	$ 8,830,669	$ 9,272,202.45	$ 9,735,812.57	$ 10,222,603.20	$ 10,733,733.36
NOPAT @2.965%=	$ 261,829	$ 274,921	$ 288,667	$ 303,100	$ 318,255
NOAT =	2.049	2.049	2.049	2.049	2.049
NOA= Sales /NOAT	$ 4,310,377	$ 4,525,896	$ 4,752,190	$ 4,989,800	$ 5,239,290

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