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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

GameStop Corp., economic profit calculation

US$ in thousands

12 months ended:	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Net operating profit after taxes (NOPAT)¹	(333,718)	(85,038)	(355,014)	(781,477)	9,041)	413,011)
Cost of capital²	-7.63%	-7.64%	1.59%	-0.36%	-1.49%	-2.70%
Invested capital³	2,449,500)	1,656,300)	1,926,200)	2,995,218)	3,832,741)	4,240,630)

Economic profit⁴	(146,722)	41,451)	(385,560)	(770,681)	66,247)	527,531)

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= -333,718 – -7.63% × 2,449,500 = -146,722

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	GameStop Corp. economic profit increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

GameStop Corp., NOPAT calculation

US$ in thousands

12 months ended:	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Net income (loss)	(381,300)	(215,300)	(470,900)	(673,000)	34,700)	353,200)
Deferred income tax expense (benefit)¹	(16,300)	82,300)	61,500)	(54,600)	(107,900)	(35,000)
Increase (decrease) in allowances²	(300)	(9,600)	9,200)	(3,700)	3,700)	300)
Increase (decrease) in deferred revenue³	22,400)	3,400)	(7,700)	(8,200)	8,200)	18,700)
Increase (decrease) in equity equivalents⁴	5,800)	76,100)	63,000)	(66,500)	(96,000)	(16,000)
Interest expense	26,900)	34,000)	38,500)	56,800)	56,800)	53,800)
Interest expense, operating lease liability⁵	25,989)	35,573)	31,517)	49,942)	50,795)	63,632)
Adjusted interest expense	52,889)	69,573)	70,017)	106,742)	107,595)	117,432)
Tax benefit of interest expense⁶	(11,107)	(14,610)	(14,704)	(22,416)	(36,260)	(41,101)
Adjusted interest expense, after taxes⁷	41,782)	54,963)	55,313)	84,326)	71,336)	76,331)
Interest income	—)	(1,900)	(11,300)	(5,700)	(1,500)	(800)
Investment income, before taxes	—)	(1,900)	(11,300)	(5,700)	(1,500)	(800)
Tax expense (benefit) of investment income⁸	—)	399)	2,373)	1,197)	506)	280)
Investment income, after taxes⁹	—)	(1,501)	(8,927)	(4,503)	(995)	(520)
(Income) loss from discontinued operations, net of tax¹⁰	—)	700)	6,500)	(121,800)	—)	—)
Net operating profit after taxes (NOPAT)	(333,718)	(85,038)	(355,014)	(781,477)	9,041)	413,011)

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowances.

³ Addition of increase (decrease) in deferred revenue.

⁴ Addition of increase (decrease) in equity equivalents to net income (loss).

⁵ 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 604,400 × 4.30% = 25,989

⁶ 2022 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 52,889 × 21.00% = 11,107

⁷ Addition of after taxes interest expense to net income (loss).

⁸ 2022 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 0 × 21.00% = 0

⁹ Elimination of after taxes investment income.

¹⁰ Elimination of discontinued operations.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	GameStop Corp. NOPAT increased from 2020 to 2021 but then slightly decreased from 2021 to 2022 not reaching 2020 level.

GameStop Corp., cash operating taxes calculation

US$ in thousands

12 months ended:	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Income tax expense (benefit)	(14,100)	(55,300)	37,600)	41,700)	45,600)	151,500)
Less: Deferred income tax expense (benefit)	(16,300)	82,300)	61,500)	(54,600)	(107,900)	(35,000)
Add: Tax savings from interest expense	11,107)	14,610)	14,704)	22,416)	36,260)	41,101)
Less: Tax imposed on investment income	—)	399)	2,373)	1,197)	506)	280)
Cash operating taxes	13,307)	(123,389)	(11,569)	117,519)	189,254)	227,321)

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	GameStop Corp. cash operating taxes decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

GameStop Corp., invested capital calculation (financing approach)

US$ in thousands

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Short-term debt, including current portion of long-term debt, net	4,100)	121,700)	—)	349,200)	—)	—)
Borrowings under revolving line of credit	—)	25,000)	—)	—)	—)	—)
Long-term debt, net, excluding current portion	40,500)	216,000)	419,800)	471,600)	817,900)	815,000)
Operating lease liability¹	604,400)	684,100)	768,700)	802,918)	816,641)	1,023,030)
Total reported debt & leases	649,000)	1,046,800)	1,188,500)	1,623,718)	1,634,541)	1,838,030)
Stockholders’ equity	1,602,500)	436,700)	611,500)	1,336,200)	2,214,500)	2,254,100)
Net deferred tax (assets) liabilities²	(16,300)	—)	(82,300)	(147,200)	(153,200)	(36,000)
Allowances³	3,300)	3,600)	13,200)	4,000)	9,400)	5,700)
Deferred revenue⁴	142,300)	119,900)	116,500)	124,200)	139,700)	131,500)
Equity equivalents⁵	129,300)	123,500)	47,400)	(19,000)	(4,100)	101,200)
Accumulated other comprehensive (income) loss, net of tax⁶	68,700)	49,300)	78,800)	54,300)	(12,200)	47,300)
Adjusted stockholders’ equity	1,800,500)	609,500)	737,700)	1,371,500)	2,198,200)	2,402,600)
Invested capital	2,449,500)	1,656,300)	1,926,200)	2,995,218)	3,832,741)	4,240,630)

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of deferred revenue.

⁵ Addition of equity equivalents to stockholders’ equity.

⁶ Removal of accumulated other comprehensive income.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	GameStop Corp. invested capital decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

GameStop Corp., cost of capital calculations

Jan 29, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	6,696,479)	6,696,479)	÷	7,338,579)	=	0.91	0.91	×	-8.68%	=	-7.92%
Debt, net³	37,700)	37,700)	÷	7,338,579)	=	0.01	0.01	×	0.85% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	604,400)	604,400)	÷	7,338,579)	=	0.08	0.08	×	4.30% × (1 – 21.00%)	=	0.28%
Total:	7,338,579)					1.00					-7.63%

Based on: 10-K (reporting date: 2022-01-29).

¹ US$ in thousands

² Equity. See details »

³ Debt, net. See details »

⁴ Operating lease liability. See details »

Jan 30, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	12,711,536)	12,711,536)	÷	13,769,736)	=	0.92	0.92	×	-8.68%	=	-8.01%
Debt, net³	374,100)	374,100)	÷	13,769,736)	=	0.03	0.03	×	7.86% × (1 – 21.00%)	=	0.17%
Operating lease liability⁴	684,100)	684,100)	÷	13,769,736)	=	0.05	0.05	×	5.20% × (1 – 21.00%)	=	0.20%
Total:	13,769,736)					1.00					-7.64%

Based on: 10-K (reporting date: 2021-01-30).

¹ US$ in thousands

² Equity. See details »

³ Debt, net. See details »

⁴ Operating lease liability. See details »

Feb 1, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	273,302)	273,302)	÷	1,451,402)	=	0.19	0.19	×	-8.68%	=	-1.63%
Debt, net³	409,400)	409,400)	÷	1,451,402)	=	0.28	0.28	×	6.75% × (1 – 21.00%)	=	1.50%
Operating lease liability⁴	768,700)	768,700)	÷	1,451,402)	=	0.53	0.53	×	4.10% × (1 – 21.00%)	=	1.72%
Total:	1,451,402)					1.00					1.59%

Based on: 10-K (reporting date: 2020-02-01).

¹ US$ in thousands

² Equity. See details »

³ Debt, net. See details »

⁴ Operating lease liability. See details »

Feb 2, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	1,034,946)	1,034,946)	÷	2,666,765)	=	0.39	0.39	×	-8.68%	=	-3.37%
Debt, net³	828,900)	828,900)	÷	2,666,765)	=	0.31	0.31	×	6.22% × (1 – 21.00%)	=	1.53%
Operating lease liability⁴	802,918)	802,918)	÷	2,666,765)	=	0.30	0.30	×	6.22% × (1 – 21.00%)	=	1.48%
Total:	2,666,765)					1.00					-0.36%

Based on: 10-K (reporting date: 2019-02-02).

¹ US$ in thousands

² Equity. See details »

³ Debt, net. See details »

⁴ Operating lease liability. See details »

Feb 3, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	1,304,330)	1,304,330)	÷	2,972,671)	=	0.44	0.44	×	-8.68%	=	-3.81%
Debt, net³	851,700)	851,700)	÷	2,972,671)	=	0.29	0.29	×	6.22% × (1 – 33.70%)	=	1.18%
Operating lease liability⁴	816,641)	816,641)	÷	2,972,671)	=	0.27	0.27	×	6.22% × (1 – 33.70%)	=	1.13%
Total:	2,972,671)					1.00					-1.49%

Based on: 10-K (reporting date: 2018-02-03).

¹ US$ in thousands

² Equity. See details »

³ Debt, net. See details »

⁴ Operating lease liability. See details »

Jan 28, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	2,109,234)	2,109,234)	÷	3,978,365)	=	0.53	0.53	×	-8.68%	=	-4.60%
Debt, net³	846,100)	846,100)	÷	3,978,365)	=	0.21	0.21	×	6.22% × (1 – 35.00%)	=	0.86%
Operating lease liability⁴	1,023,030)	1,023,030)	÷	3,978,365)	=	0.26	0.26	×	6.22% × (1 – 35.00%)	=	1.04%
Total:	3,978,365)					1.00					-2.70%

Based on: 10-K (reporting date: 2017-01-28).

¹ US$ in thousands

² Equity. See details »

³ Debt, net. See details »

⁴ Operating lease liability. See details »

GameStop Corp., economic spread ratio calculation, comparison to benchmarks

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	(146,722)	41,451)	(385,560)	(770,681)	66,247)	527,531)
Invested capital²	2,449,500)	1,656,300)	1,926,200)	2,995,218)	3,832,741)	4,240,630)
Performance Ratio
Economic spread ratio³	-5.99%	2.50%	-20.02%	-25.73%	1.73%	12.44%
Benchmarks
Economic Spread Ratio, Competitors⁴
Amazon.com Inc.	-15.36%	4.73%	2.10%	-1.25%	—	—
Home Depot Inc.	25.60%	16.42%	23.51%	23.94%	—	—
Lowe’s Cos. Inc.	24.86%	12.36%	8.43%	-1.05%	—	—
TJX Cos. Inc.	7.47%	-9.46%	8.25%	7.52%	—	—

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -146,722 ÷ 2,449,500 = -5.99%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	GameStop Corp. economic spread ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

GameStop Corp., economic profit margin calculation, comparison to benchmarks

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	(146,722)	41,451)	(385,560)	(770,681)	66,247)	527,531)

Net sales	6,010,700)	5,089,800)	6,466,000)	8,285,300)	9,224,600)	8,607,900)
Add: Increase (decrease) in deferred revenue	22,400)	3,400)	(7,700)	(8,200)	8,200)	18,700)
Adjusted net sales	6,033,100)	5,093,200)	6,458,300)	8,277,100)	9,232,800)	8,626,600)
Performance Ratio
Economic profit margin²	-2.43%	0.81%	-5.97%	-9.31%	0.72%	6.12%
Benchmarks
Economic Profit Margin, Competitors³
Amazon.com Inc.	-8.01%	2.03%	0.81%	-0.57%	—	—
Home Depot Inc.	8.14%	6.18%	7.80%	7.56%	—	—
Lowe’s Cos. Inc.	6.76%	3.91%	3.12%	-0.36%	—	—
TJX Cos. Inc.	3.03%	-6.58%	3.70%	3.36%	—	—

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

¹ Economic profit. See details »

² 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × -146,722 ÷ 6,033,100 = -2.43%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	GameStop Corp. economic profit margin improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

GameStop Corp. (NYSE:GME)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin