GameStop Corp (GME)
Interest coverage
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -16,500 | -34,500 | -31,700 | -302,100 | -311,600 |
| Interest expense | US$ in thousands | — | — | — | 4,100 | 4,100 |
| Interest coverage | — | — | — | -73.68 | -76.00 |
January 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $-16,500K ÷ $—K
= —
The interest coverage ratio for GameStop Corp, based on the provided data, has shown a concerning trend. The interest coverage ratio for January 28, 2023, was -76.00, indicating that the company's earnings before interest and taxes were insufficient to cover its interest expenses by a significant margin. This negative ratio suggests financial distress and raises doubts about GameStop's ability to meet its interest obligations.
The ratio further deteriorated to -73.68 on January 31, 2023, exacerbating the company's financial vulnerability. Subsequently, the data for January 31, 2024, February 3, 2024, and January 31, 2025, are not provided (denoted by '—'), preventing a comprehensive assessment of the company's interest coverage in those periods.
Overall, the persistently negative interest coverage ratios indicate that GameStop Corp may be facing challenges in generating sufficient operating income to cover its interest expenses. This situation could potentially lead to liquidity issues and increased financial risk for the company.