GameStop Corp (GME)
Cash conversion cycle
| Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 58.03 | 86.08 | 55.78 | 62.65 | 54.72 | 87.78 | 56.02 | 69.83 | 71.62 | 93.35 | 51.69 | 51.60 | 57.41 | 83.72 | 43.06 | 56.63 | 68.85 | 89.04 | 61.25 | 72.33 |
| Days of sales outstanding (DSO) | days | 6.30 | 5.65 | 4.75 | 7.52 | 9.48 | 7.68 | 5.99 | 6.17 | 8.57 | 5.18 | 4.48 | 6.97 | 7.55 | 5.49 | 5.42 | 5.33 | 8.01 | 7.25 | 5.70 | 5.72 |
| Number of days of payables | days | 29.72 | 68.49 | 31.15 | 46.31 | 42.57 | 68.93 | 16.57 | 29.44 | 36.87 | 58.22 | 35.51 | 35.12 | 32.57 | 42.81 | 23.27 | 18.35 | 30.50 | 49.12 | 23.77 | 28.85 |
| Cash conversion cycle | days | 34.60 | 23.23 | 29.38 | 23.86 | 21.62 | 26.53 | 45.44 | 46.57 | 43.32 | 40.31 | 20.66 | 23.45 | 32.39 | 46.41 | 25.22 | 43.62 | 46.37 | 47.16 | 43.18 | 49.19 |
February 3, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 58.03 + 6.30 – 29.72
= 34.60
The cash conversion cycle of GameStop Corp has shown fluctuations over the past few periods. The company's ability to convert its resources into cash has varied, with the cycle ranging from 20.66 days to 49.19 days.
In analyzing the cash conversion cycle, it is essential to understand that a shorter cycle indicates that the company is able to efficiently manage its cash, inventory, and receivables. Conversely, a longer cycle suggests that the company takes more time to convert its investments into cash, potentially indicating inefficiencies or challenges in managing working capital.
Looking at the data provided, GameStop Corp experienced its shortest cash conversion cycle of 20.66 days in the third quarter of 2021, indicating a more efficient cash management process during that period. On the other hand, the company faced a longer cycle of 49.19 days in the second quarter of 2019, suggesting potential cash flow challenges or operational inefficiencies during that period.
Overall, GameStop Corp should monitor its cash conversion cycle closely to ensure optimal management of working capital and efficient use of resources to support its financial health and operational performance.