GameStop Corp (GME)
Working capital turnover
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 3, 2024 | Jan 31, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 31, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 3,823,000 | 4,334,000 | 5,267,300 | 5,547,300 | 5,743,800 | 5,114,000 | 4,484,200 | 4,643,000 | 4,801,800 | 5,864,400 | 6,927,000 | 6,876,300 | 6,825,600 | 5,735,200 | 4,644,800 | 4,836,800 | 5,904,300 | 7,022,200 | 7,182,800 | 7,101,000 |
| Total current assets | US$ in thousands | 5,355,000 | 5,623,300 | 4,883,900 | 1,879,700 | 1,974,200 | 1,974,200 | 2,376,800 | 2,376,800 | 2,005,200 | 2,005,200 | 2,254,600 | 2,254,600 | 2,323,700 | 2,323,700 | 2,581,800 | 2,581,800 | 2,019,200 | 2,019,200 | 2,329,600 | 2,598,800 |
| Total current liabilities | US$ in thousands | 665,400 | 1,099,600 | 783,500 | 848,300 | 934,500 | 934,500 | 1,437,800 | 1,437,800 | 1,071,400 | 1,071,400 | 1,319,500 | 1,319,500 | 1,339,100 | 1,339,100 | 1,588,700 | 1,588,700 | 932,400 | 932,400 | 1,126,900 | 1,354,700 |
| Working capital turnover | 0.82 | 0.96 | 1.28 | 5.38 | 5.52 | 4.92 | 4.78 | 4.94 | 5.14 | 6.28 | 7.41 | 7.35 | 6.93 | 5.82 | 4.68 | 4.87 | 5.43 | 6.46 | 5.97 | 5.71 |
January 31, 2025 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $3,823,000K ÷ ($5,355,000K – $665,400K)
= 0.82
Working capital turnover is a financial ratio that indicates how efficiently a company utilizes its working capital to generate sales revenue. It is calculated by dividing net sales by the average working capital during a specific period.
Based on the provided data for GameStop Corp, we observe fluctuations in the working capital turnover ratio over the period from January 31, 2022, to January 31, 2025. The ratio ranges from a high of 7.41 in April 30, 2023, to a low of 0.82 in January 31, 2025. This variability may indicate changes in the company's management of its working capital and sales performance.
GameStop Corp's working capital turnover generally demonstrates a downward trend over the analyzed period, with some fluctuations. This trend suggests potential challenges in effectively utilizing working capital to support sales activities. A declining working capital turnover ratio may indicate inefficiencies in managing inventory, accounts receivable, or accounts payable.
The significant drop in the working capital turnover ratio to 0.82 on January 31, 2025, and subsequent low values in the following periods (February 3, 2024, April 30, 2024, July 31, 2024, and October 31, 2024) raise concerns about the company's ability to efficiently convert its working capital into sales revenue. This could be a signal of operational or financial distress that may require attention from management to improve working capital management practices.
In conclusion, based on the analysis of GameStop Corp's working capital turnover, the company may need to focus on optimizing its working capital management to enhance its efficiency in generating sales revenue and sustaining business operations effectively.