GameStop Corp (GME)

Quick ratio

Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020
Cash US$ in thousands 921,700 1,139,000 1,271,400 508,500 499,400
Short-term investments US$ in thousands 277,600 251,600 0 165,200
Receivables US$ in thousands 91,000 153,900 141,100 105,300 141,900
Total current liabilities US$ in thousands 934,500 1,339,100 1,354,700 1,342,700 1,237,700
Quick ratio 1.38 1.15 1.04 0.46 0.65

February 3, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($921,700K + $277,600K + $91,000K) ÷ $934,500K
= 1.38

The quick ratio, also known as the acid-test ratio, provides insight into a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio of 1 or higher is generally considered satisfactory, indicating that a company has enough liquid assets to cover its current liabilities.

Looking at GameStop Corp's quick ratio over the past five fiscal years, we observe an upward trend, indicating an improvement in the company's short-term liquidity position. The quick ratio has increased from 0.65 in February 2020 to 1.38 in February 2024.

This upward trend suggests that GameStop Corp has enhanced its ability to meet its short-term obligations using its most liquid assets such as cash, cash equivalents, and marketable securities. A quick ratio of 1.38 in February 2024 indicates that the company's liquid assets are 1.38 times greater than its current liabilities, demonstrating a strong liquidity position.

The improvement in the quick ratio over the period reflects positively on GameStop Corp's financial management, signaling a better ability to cover short-term obligations without having to rely heavily on selling inventory or raising additional funds. However, it is essential for the company to continue monitoring and managing its liquidity effectively to ensure ongoing financial stability and meet its obligations in a timely manner.


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GameStop Corp Quick Ratio