GameStop Corp (GME)
Return on total capital
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -16,500 | -34,500 | -31,700 | -302,100 | -311,600 |
| Long-term debt | US$ in thousands | — | 17,700 | — | — | 28,700 |
| Total stockholders’ equity | US$ in thousands | 4,929,800 | 1,338,600 | 1,338,600 | 1,322,300 | 1,322,300 |
| Return on total capital | -0.33% | -2.54% | -2.37% | -22.85% | -23.06% |
January 31, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-16,500K ÷ ($—K + $4,929,800K)
= -0.33%
GameStop Corp's return on total capital has shown a declining trend over the years. In January 2023, the return on total capital was at -23.06%, which improved slightly to -22.85% by the end of the same year. In January 2024, there was a notable decrease as the return on total capital stood at -2.37%, and a further decline to -2.54% by February 2024. However, there was a slight improvement in January 2025, with the return on total capital reaching -0.33%. Overall, the consistently negative returns indicate that GameStop Corp has struggled to efficiently generate profit relative to the capital invested in the business. Further analysis of the company's financial strategies and operational efficiency may be necessary to address this issue.