Question

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 (in millions) 1 $ $1,500 $1,000 $500 $0 More More Last year's net income More m ember Income tax savings Additional Greater marketing payroll... This year's net income content. interes.

Answer 1

1) According to red waterfall chart, the amount of newflix's net income in last year was $200 millions.

2) According to red waterfall chart, the amount of newflix's net income in current year is $600 millions.

3) "More content" is the factor which contributed most to the net income increase from last year to current year.

4) According to the green waterfall chart, the amount of Newflix's beginning cash position of current year is $1,500 millions.

5) According to the green waterfall chart,the amount of Newflix's ending cash position of current year is $2,800 millions.

6) According to the green waterfall chart, the biggest contributing factor to the change in Newflix's begginning and ending cash position was "Cash from issuing new loans".

The "Cash position" factor directly affects "income tax savings" factor in the red net income waterfall chart.