GameStop Corp (GME)
Return on total capital
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -34,500 | -43,500 | -125,100 | -216,300 | -311,600 | -524,800 | -531,400 | -481,500 | -368,600 | -184,200 | -144,000 | -171,600 | -238,500 | -194,500 | -175,600 | -535,900 | -406,100 | -615,200 | -1,069,900 | -607,200 |
| Long-term debt | US$ in thousands | 17,700 | 20,000 | 23,600 | 26,300 | 28,700 | 28,800 | 32,100 | 35,700 | 40,500 | 44,800 | 47,500 | 0 | 216,000 | 216,000 | 215,900 | 0 | 419,800 | 419,400 | 419,100 | 468,900 |
| Total stockholders’ equity | US$ in thousands | 1,338,600 | 1,262,800 | 1,267,200 | 1,271,600 | 1,322,300 | 1,245,000 | 1,343,500 | 1,450,700 | 1,602,500 | 1,754,900 | 1,852,000 | 879,500 | 436,700 | 332,200 | 352,300 | 435,000 | 611,500 | 617,100 | 809,700 | 1,291,700 |
| Return on total capital | -2.54% | -3.39% | -9.69% | -16.67% | -23.06% | -41.20% | -38.63% | -32.39% | -22.43% | -10.24% | -7.58% | -19.51% | -36.54% | -35.48% | -30.90% | -123.20% | -39.38% | -59.35% | -87.07% | -34.49% |
February 3, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-34,500K ÷ ($17,700K + $1,338,600K)
= -2.54%
The return on total capital for GameStop Corp has been fluctuating over the past few periods, ranging from negative 2.54% to negative 123.20%. This indicates that the company has been struggling to generate sufficient returns from its total invested capital. The negative percentages suggest that the company's net income generated from its capital employed is insufficient to cover the cost of that capital.
The downward trend in return on total capital over the periods raises concerns about GameStop's operational efficiency and financial performance. A declining return on total capital could imply inefficiencies in the company's asset utilization or declining profitability. Investors and stakeholders may be wary of the company's ability to effectively utilize its capital resources to generate adequate returns in the future. Further analysis and investigation into the factors impacting this ratio would be important for assessing the company's financial health and sustainability.