GameStop Corp (GME)
Cash conversion cycle
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 64.70 | 95.76 | 51.94 | 58.97 | 53.17 | 60.35 | 112.66 | 107.67 | 68.34 | 55.10 | 51.79 | 52.33 | 47.54 | 57.04 | 118.07 | 112.14 | 57.51 | 47.18 | 57.65 | 58.52 |
| Days of sales outstanding (DSO) | days | — | — | — | — | 5.78 | — | — | 6.94 | — | 4.71 | — | 6.33 | — | 9.79 | — | 9.46 | — | 5.18 | — | — |
| Number of days of payables | days | — | — | — | — | 27.24 | — | — | 85.68 | — | 30.77 | — | 38.68 | — | 44.38 | — | 88.06 | — | 13.96 | — | — |
| Cash conversion cycle | days | 64.70 | 95.76 | 51.94 | 58.97 | 31.72 | 60.35 | 112.66 | 28.93 | 68.34 | 29.04 | 51.79 | 19.98 | 47.54 | 22.46 | 118.07 | 33.53 | 57.51 | 38.40 | 57.65 | 58.52 |
January 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 64.70 + — – —
= 64.70
The cash conversion cycle is a measure of the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. It consists of three main components: the days inventory outstanding (DIO), days sales outstanding (DSO), and days payables outstanding (DPO).
Analyzing GameStop Corp's cash conversion cycle based on the provided data reveals fluctuations over the past few years. From October 2022 to January 2023, there was a significant increase in the cash conversion cycle from 33.53 days to 47.54 days. This suggests that the company took longer to convert its investments into cash during this period.
However, the cycle decreased sharply by April 2023, reaching only 19.98 days, indicating an improvement in the efficiency of the company's cash conversion process. This trend continued, with fluctuations, until October 2024 when the cycle increased to 95.76 days, reflecting a longer period to convert investments into cash.
It is important to note that a shorter cash conversion cycle is generally considered more favorable, as it means the company is able to generate cash more quickly from its operations. On the other hand, a longer cycle may indicate inefficiencies in managing inventory, sales, or payables.
Overall, GameStop Corp's cash conversion cycle has shown variability over the analyzed period, with fluctuations in efficiency in converting investments into cash. Further analysis of the company's operational performance and working capital management practices may shed light on the factors driving these fluctuations.