GameStop Corp (GME)
Financial leverage ratio
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,709,000 | 3,113,400 | 3,499,300 | 2,472,600 | 2,819,700 |
| Total stockholders’ equity | US$ in thousands | 1,338,600 | 1,322,300 | 1,602,500 | 436,700 | 611,500 |
| Financial leverage ratio | 2.02 | 2.35 | 2.18 | 5.66 | 4.61 |
February 3, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,709,000K ÷ $1,338,600K
= 2.02
The financial leverage ratio of GameStop Corp has shown fluctuations over the past five years. In fiscal year 2021, the ratio was significantly high at 5.66, indicating a high level of financial leverage and potentially higher financial risk. This could suggest that the company relied heavily on debt to finance its operations during that period.
In the following years, the financial leverage ratio decreased, reaching 4.61 in fiscal year 2020 and then further declining to 2.18 in fiscal year 2022. This decline may indicate that GameStop Corp has been reducing its reliance on debt to fund its activities, which could lead to a lower level of financial risk.
However, the ratio increased slightly to 2.35 in fiscal year 2023 and then to 2.02 in fiscal year 2024. These increases suggest that the company may have taken on additional debt or reduced its equity levels in recent years, potentially increasing its financial risk once again.
Overall, the fluctuations in GameStop Corp's financial leverage ratio over the years indicate changes in the company's capital structure and financial risk profile. It is important for investors and stakeholders to closely monitor these changes to assess the company's ability to meet its financial obligations and manage its debt levels effectively.