GameStop Corp (GME)
Interest coverage
| 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 |
| Interest expense | US$ in thousands | — | 4,100 | 26,900 | 32,100 | 27,200 |
| Interest coverage | — | -76.00 | -13.70 | -7.43 | -14.93 |
February 3, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-34,500K ÷ $—K
= —
The interest coverage ratio for GameStop Corp has shown a declining trend over the past five years. In fiscal year 2020, the company had an interest coverage ratio of -14.93, which improved slightly in the subsequent year to -7.43, but remained negative. However, in the latest fiscal year, GameStop Corp's interest coverage ratio deteriorated further to -13.70. The negative values indicate that the company's earnings before interest and taxes (EBIT) were insufficient to cover its interest expenses, which raises concerns about the company's ability to meet its debt obligations. Overall, GameStop Corp's interest coverage has been consistently weak in recent years, highlighting the need for careful monitoring of its financial health and debt management strategies.