GameStop Corp (GME)
Inventory turnover
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,978,600 | 4,555,100 | 4,662,900 | 3,830,300 | 4,557,300 |
| Inventory | US$ in thousands | 632,500 | 682,900 | 915,000 | 602,500 | 859,700 |
| Inventory turnover | 6.29 | 6.67 | 5.10 | 6.36 | 5.30 |
February 3, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $3,978,600K ÷ $632,500K
= 6.29
The inventory turnover ratio measures how effectively a company manages its inventory by showing how many times a company sells and replaces its inventory in a given period. A higher inventory turnover ratio indicates that a company is selling its inventory quickly and efficiently.
GameStop Corp's inventory turnover ratios over the past five years have fluctuated within a range of 5.10 to 6.67. The average inventory turnover ratio during this period is approximately 5.74. This suggests that, on average, GameStop Corp has been able to turn over its inventory approximately 5.74 times per year.
The higher inventory turnover ratios observed in some years, such as 6.67 in 2023 and 6.36 in 2021, indicate that GameStop Corp was more efficient in managing its inventory during those periods, likely due to strong sales or effective inventory management strategies. Conversely, the lower inventory turnover ratios in other years, such as 5.10 in 2022 and 5.30 in 2020, suggest that the company took longer to sell and replace its inventory during those periods.
Overall, GameStop Corp's inventory turnover ratios have shown variability over the years, indicating fluctuations in inventory management efficiency. Further analysis of the factors influencing these fluctuations, such as sales performance, inventory control measures, and market demand, would provide valuable insights into the company's overall performance and operational effectiveness.