GameStop Corp (GME)
Solvency ratios
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.01 | 0.01 | 0.01 | 0.09 | 0.15 |
| Debt-to-capital ratio | 0.01 | 0.02 | 0.02 | 0.33 | 0.41 |
| Debt-to-equity ratio | 0.01 | 0.02 | 0.03 | 0.49 | 0.69 |
| Financial leverage ratio | 2.02 | 2.35 | 2.18 | 5.66 | 4.61 |
Based on the solvency ratios of GameStop Corp over the past five years, we can observe the following trends:
1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets financed by debt. GameStop's debt-to-assets ratio has been consistently low, indicating the company's low reliance on debt to fund its operations and investments. This stable ratio suggests that GameStop has a strong ability to cover its debt obligations with its assets.
2. Debt-to-capital ratio: This ratio reflects the extent to which a company's operations are funded by debt relative to its total capital. GameStop's debt-to-capital ratio has also remained relatively low over the years, indicating a conservative use of debt financing. The slight fluctuation in this ratio suggests a consistent approach to maintaining a balanced capital structure.
3. Debt-to-equity ratio: This ratio compares a company's total debt to its shareholders' equity, providing insight into the level of financial leverage. GameStop's debt-to-equity ratio has been stable at low levels, indicating that the company has primarily used equity to finance its operations rather than debt. This suggests a lower risk of financial distress due to excessive debt.
4. Financial leverage ratio: This ratio measures the extent to which a company's operations are funded by debt relative to its equity. GameStop's financial leverage ratio has shown fluctuations but has generally decreased over the past five years. A lower financial leverage ratio implies lower financial risk and less dependency on debt to support its operations.
Overall, GameStop Corp's solvency ratios demonstrate a prudent approach to managing its capital structure and debt levels, which may contribute to the company's financial stability and ability to meet its obligations effectively.
Coverage ratios
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | — | -76.00 | -13.70 | -7.43 | -14.93 |
The interest coverage ratio for GameStop Corp has been showing a negative trend over the past five years. As of the most recent period ending on February 3, 2024, the interest coverage ratio was not available. However, the ratio was -76.00 in January 28, 2023, -13.70 in January 29, 2022, -7.43 in January 30, 2021, and -14.93 in February 1, 2020.
The negative values indicate that GameStop Corp's earnings before interest and taxes (EBIT) were insufficient to cover its interest expenses during these periods. This could be a matter of concern as a low or negative interest coverage ratio suggests a higher risk of default on its debt obligations. Investors and creditors may view this trend unfavorably as it indicates potential financial distress for the company. GameStop Corp may need to focus on improving its profitability or managing its debt levels to strengthen its interest coverage ratio and financial health.