Question

Please help me with this problem!

Waterfall charts draw attention to factors that cause differences between amounts, such as the increase in a company's net income from last year to this year or the change in cash position between the beginning and end of this year. Shown below are waterfall charts for a hypothetical company named Newflix, which is similar to Netflix, Inc. Newflix's Net Income Changes $3,000 $2,500 $2,000 inmond $1.500 $1,000 $500 Last year's Morem net incomember income tax savings More Additional content marketing Greater payroll More interes This year's net income Newflix's Changes in Cash Position $5.000 $4.000 (in million) $2.000 < Prey 12 of 20 !!!

Answer 1

Waterfall charts represent data cumulatively

So the red waterfall chart says,

(Last year net income) + (More member) + (Income tax savings) -( more content expenditure) - ( additional marketing expenditure) -(Greater payroll expenditure) -(More interest payment) = This year net income

[Since there are intervals of 500 mil $ in the graph y axis, we have to scale the charts according to our observation]

1) net income(in millions) last year = 200 million $

2) net income(in millions) last year = 550 million $

3)Factor contributing the most to net income increase = More members

The green waterfall chart says,

(Beginning cash position) + (cash from issuing) + (investment sales) - (net cash spent on operations) - (payments for property )= Ending cash position

[Since there are intervals of 1000 mil $ in the graph y axis, we have to scale the charts according to our observation]\

4) Newflix beginning cash position this year= 1500 million $

5) Newflix ending cash position this year= 2800 million $

6) Factor contributing most = Cash from issuing ne....[ The full name of this column in the chart is not visible]