Setting dependencies for Netflix

Netflix has compiled a forecast up to the 2019 financial year netflix_f_is, and has based the sales figures in 2019 on the following dependency:

Number of active subscriptions, which are based on the success of Netflix original shows.

For 2019, the success of original shows (critical and commercial acclaim) are estimated at 78%. The total amount of subscribers per percentage point is 500, and set to the variable n_subscribers_per_pp (i.e there is a calculated correlation between show success and number of subscribers).

In this exercise, we will calculate how dependent sales are on the number of subscribers in the forecast, which we will use in the next exercise.

The Netflix forecast, netflix_f_iscan be printed in the shell.

This exercise is part of the course

Financial Forecasting in Python

Hands-on interactive exercise

Have a go at this exercise by completing this sample code.

# Create a filter to select the sales row from the netflix_f_is dataset
sales_metric = [____]

# Filter for rows containing the Sales metric
filtered_netflix_f_is = ____[netflix_f_is.metric.isin(____)]

# Extract the 2019 Sales forecast value
forecast1 = netflix_f_is[____].____[0]

# Print the resulting forecast
print("The sales forecast is {}.".format(____))

Edit and Run Code

This exercise is part of the course

Financial Forecasting in Python

IntermediateSkill Level

4.7+

Start Course for Free

In this chapter, we will learn the basics of financial statements, with a specific focus on the income statement, which provides details on our sales, costs, and profits. We will learn how to calculate profitability metrics and finish off what we have learned by building our profit forecast for Tesla!

Exercise 1: Introduction to financial statements Exercise 2: Calculating gross profit Exercise 3: Calculating net profit Exercise 4: Elements within net profit & gross profit Exercise 5: Calculating sales & Cost of Goods Sold (COGS)Exercise 6: Calculating sales Exercise 7: Forecasting sales with a discount Exercise 8: Calculating COGS Exercise 9: Calculating the break-even point Exercise 10: Working with raw forecast datasets Exercise 11: Tesla income statement Exercise 12: Forecasting profit for Tesla

In this chapter, we will learn a bit more about the balance sheet, covering assets and liabilities and specific ratios to help evaluate the financial health and efficiency of a company, as well as how these ratios can assist us in building a great forecast.

Exercise 1: Introduction to the balance sheet Exercise 2: Calculating accounts receivable (debtors)Exercise 3: Bad debts Exercise 4: Calculating accounts payable (creditors)Exercise 5: Understanding accounts payable and receivable Exercise 6: Balance sheet efficiency ratios - Part 1 Exercise 7: Debtor days ratio Exercise 8: Days payable outstanding Exercise 9: Balance sheet efficiency ratios - Part 2 Exercise 10: Days in inventory and asset turnover ratio Exercise 11: Understanding ratios Exercise 12: Calculating balance sheet ratios for Ford Exercise 13: Forecasting the balance sheet for Ford

We have gotten a basic understanding of income statements and balance sheets. However, consolidating data for forecasting is complex, so in this chapter, we will look at some basic tools to help solve some of the complexities specifically relating to finance - working with dates and different financial periods, and formatting our raw data into the correct format for financial forecasting.

Exercise 1: Financial periods and how to work with them Exercise 2: Converting quarters into months Exercise 3: Merging months into quarters Exercise 4: The datetime library Exercise 5: Working with the datetime library Exercise 6: Converting date formats - simple Exercise 7: Converting date formats - explicit Exercise 8: Tips and tricks when working with datasets Exercise 9: Working with datasets - month totals Exercise 10: Working with datasets - combining datasets Exercise 11: Working with datasets - exporting data

In this chapter, we will be exploring two more aspects to creating a good forecast. First, we will look at assumptions, what drives them and what happens when an assumption changes? Next, we will look at variances, as a forecast is built at one point in time, but what happens when the actual results do not correspond to our forecast? We need to build a sensitive forecast that can be sensitive to changes in both assumptions and take into account variances, and this is what we will explore in this chapter.

Exercise 1: Building sensitive forecast models Exercise 2: Weighted probability Exercise 3: Market sentiment Exercise 4: Dependencies and sensitivity Exercise 5: Assigning dependencies for sales and COGS Exercise 6: Building a sensitivity analysis for gross profit Exercise 7: Assigning dependencies for expenses Exercise 8: Build a sensitivity analysis for the net profit Exercise 9: Working with variances in the forecast Exercise 10: Building an alternate forecast Exercise 11: Building a gap analysis between forecasts Exercise 12: Setting dependencies for Netflix

Current Exercise

Exercise 13: Calculating an alternative forecast for Netflix