Assume you are considering purchasing Netflix stock. What considerations would influence
your decision? Relative to Netflix’s financial performance, what factors would influence the
decision, and how would those factors rank in your decision? What about the nonfinancial
factors?
Glossary
Financial Accounting Standards Board (FASB)
independent, nonprofit organization that sets financial accounting and reporting stan‐
dards for both public and private sector businesses in the United States that use
Generally Accepted Accounting Principles (GAAP)
generally accepted accounting principles (GAAP)
common set of rules, standards, and procedures that publicly traded companies must fol‐
low when composing their financial statements
transaction
business activity or event that has an effect on financial information presented on finan‐
cial statements
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