GameStop Corp (GME)
Liquidity ratios
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 2.11 | 1.74 | 1.92 | 1.16 | 1.32 |
| Quick ratio | 1.38 | 1.15 | 1.04 | 0.46 | 0.65 |
| Cash ratio | 1.28 | 1.04 | 0.94 | 0.38 | 0.54 |
GameStop Corp's liquidity ratios have shown varying trends over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has generally been improving, reaching 2.11 in Feb 3, 2024, compared to 1.32 in Feb 1, 2020. This indicates that GameStop Corp's current assets are more than twice its current liabilities, suggesting a stronger ability to meet short-term obligations.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also been on an upward trend, reaching 1.38 in Feb 3, 2024. This implies that GameStop Corp has enough liquid assets to cover its short-term liabilities without relying on selling inventory.
The cash ratio, which is the most conservative liquidity measure focusing only on cash and cash equivalents, has also shown improvement, increasing to 1.28 in Feb 3, 2024. This indicates that GameStop Corp has a sufficient amount of cash to cover its current liabilities, suggesting a strong cash position.
Overall, the increasing trend in all three liquidity ratios suggests that GameStop Corp's liquidity position has been strengthening over the years, indicating a better ability to meet its short-term obligations and potentially seize opportunities for growth.
See also:
Additional liquidity measure
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 34.60 | 21.62 | 43.32 | 32.39 | 46.37 |
The cash conversion cycle of GameStop Corp has fluctuated over the past five years. In the fiscal year ending February 3, 2024, the company's cash conversion cycle increased to 34.60 days, reflecting a slower conversion of inventory and receivables into cash compared to the prior year. This suggests that GameStop took longer to sell inventory and collect receivables, tying up cash in the process.
Conversely, in the fiscal year ending January 28, 2023, the company's cash conversion cycle decreased to 21.62 days, indicating a more efficient conversion of inventory and receivables into cash. This suggests that GameStop managed its working capital more effectively, leading to a quicker conversion of assets into cash.
In the fiscal years ending January 29, 2022, and January 30, 2021, the cash conversion cycle was 43.32 days and 32.39 days, respectively, showing fluctuations in the efficiency of GameStop's working capital management over those years.
Finally, in the fiscal year ending February 1, 2020, the cash conversion cycle was at its highest at 46.37 days, indicating a slower conversion of assets into cash compared to recent years.
Overall, a lower cash conversion cycle indicates better efficiency in managing working capital and converting assets into cash. GameStop's varying cash conversion cycles over the years suggest fluctuations in its operational efficiency and effectiveness in managing its cash flow. It is important for the company to monitor and optimize its cash conversion cycle to ensure healthy liquidity and operational effectiveness.