GameStop Corp (GME)
Return on total capital
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -34,500 | -311,600 | -368,500 | -238,500 | -406,100 |
| Long-term debt | US$ in thousands | 17,700 | 28,700 | 40,500 | 216,000 | 419,800 |
| Total stockholders’ equity | US$ in thousands | 1,338,600 | 1,322,300 | 1,602,500 | 436,700 | 611,500 |
| Return on total capital | -2.54% | -23.06% | -22.43% | -36.54% | -39.38% |
February 3, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-34,500K ÷ ($17,700K + $1,338,600K)
= -2.54%
GameStop Corp's return on total capital has shown a declining trend over the past five years. The company's performance in utilizing its total capital to generate returns has been negative, with figures ranging from -2.54% to -39.38% during this period. This indicates that GameStop has been struggling to efficiently deploy its capital to generate profits for its shareholders. The consistent negative returns on total capital suggest potential inefficiencies or challenges within the company's operations or strategic decisions. Further analysis of the components contributing to total capital and profitability may be necessary to diagnose the root causes of this downward trend in return on total capital for GameStop Corp.