Economic Value Added (EVA)
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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.
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- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Current Ratio since 2006
- Debt to Equity since 2006
- Price to Earnings (P/E) since 2006
- Price to Operating Profit (P/OP) since 2006
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Economic Profit
GameStop Corp., economic profit calculation
US$ in thousands
| 12 months ended: | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | |
|---|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | |||||||
| Cost of capital2 | |||||||
| Invested capital3 | |||||||
| Economic profit4 | |||||||
Based on: 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 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).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT demonstrates a fluctuating negative trend throughout the periods analyzed. The initial value is significantly negative at approximately -781 million US dollars in 2019, improving to -355 million by 2020 and further improving to approximately -85 million in 2021. However, there is a subsequent deterioration to about -334 million in 2022 and -229 million in 2023, before again improving to around -86 million in 2024. This pattern suggests volatile operational profitability with intermittent periods of reduction in losses.
- Cost of Capital
- The cost of capital exhibits a mild downward trend initially, starting at 4.28% in 2019 and decreasing progressively to 3.28% by 2022. A slight increase is observed subsequently rising to 3.36% in 2023 and 3.44% in 2024. Overall, the cost of capital has remained relatively stable with a narrow range between 3.28% and 4.28%, indicating modest fluctuations in the company's required rate of return over the period.
- Invested Capital
- Invested capital shows a general declining trend from 2019 to 2021, dropping from approximately 3 billion US dollars to around 1.7 billion US dollars. There is a notable increase to about 2.44 billion in 2022, followed by a decrease again to approximately 1.94 billion in 2023, and further to around 1.86 billion in 2024. This variability signals adjustments in the company's capital base, possibly reflecting strategic asset reallocation or changes in funding structure.
- Economic Profit
- Economic profit remains consistently negative throughout the timeframe, signaling the company's inability to generate returns above its cost of capital. The largest deficit occurs in 2019 at approximately -910 million US dollars, with an improving trend to about -141 million in 2021. However, economic profit worsens again significantly to around -414 million in 2022 and then improves to approximately -150 million in 2024. The pattern is largely parallel to NOPAT movements, underscoring persistent challenges in achieving value creation despite some intermittent recovery.
Net Operating Profit after Taxes (NOPAT)
GameStop Corp., NOPAT calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 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).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance.
3 Addition of increase (decrease) in deferred revenue.
4 Addition of increase (decrease) in equity equivalents to net income (loss).
5 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
6 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
7 Addition of after taxes interest expense to net income (loss).
8 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
9 Elimination of after taxes investment income.
10 Elimination of discontinued operations.
- Net Income (Loss)
- The net income (loss) showed a significant improvement over the period analyzed. Initially, the company recorded substantial losses, with the highest loss of -673,000 thousand USD in the fiscal year ending February 2, 2019. Over the subsequent years, the losses decreased considerably, falling to -215,300 thousand USD by January 30, 2021. Despite a temporary increase in losses to -381,300 thousand USD in January 29, 2022, the downward trend continued with losses reducing to -313,100 thousand USD by January 28, 2023. Notably, the fiscal year ending February 3, 2024, marked a pivotal turnaround, with the company achieving a small positive net income of 6,700 thousand USD.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT also exhibited a trend of decreasing losses throughout the measured periods. The most significant loss of -781,477 thousand USD occurred in February 2, 2019, which subsequently improved to -355,014 thousand USD by February 1, 2020. This improvement paused temporarily in January 29, 2022, when NOPAT declined to -333,718 thousand USD after reaching a low of -85,038 thousand USD on January 30, 2021. The losses for NOPAT decreased again to -228,718 thousand USD in January 28, 2023, followed by a slight decline to -85,929 thousand USD in the most recent period ending February 3, 2024.
- Overall Trends and Insights
- The financial performance over the six-year span indicates a movement from deep operating and net losses toward stabilization and eventual profitability. Both net income and NOPAT figures show a marked reduction in losses, reflecting possible operational restructuring or improved market conditions. The positive net income in the most recent year suggests that the company may have effectively addressed key challenges impacting profitability. However, NOPAT remains negative, indicating ongoing operating inefficiencies or costs yet to be fully mitigated. Continued monitoring of these figures would be crucial to assess whether the trend toward profitability is sustainable.
Cash Operating Taxes
GameStop Corp., cash operating taxes calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 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).
- Income tax expense (benefit)
- The income tax expense experienced significant fluctuations over the examined years. Beginning with a positive tax expense of 41,700 thousand USD in early 2019, it decreased slightly to 37,600 thousand USD by early 2020. Notably, the company reported a tax benefit in 2021 and 2022, with negative values of -55,300 thousand USD and -14,100 thousand USD, respectively. This indicates that rather than paying taxes, the company recognized tax benefits or refunds during these two years. From 2023 onward, the tax expense reverted to positive figures, with 11,000 thousand USD in 2023 and a further decrease to 6,400 thousand USD in early 2024. Overall, the data points reveal a transition from tax liabilities to tax benefits and back to reduced tax expenses, reflecting potentially changing profitability, tax strategies, or accounting adjustments.
- Cash operating taxes
- Cash operating taxes show a highly volatile and irregular trend throughout the period. In 2019, cash operating taxes were substantially positive at 117,519 thousand USD. However, this shifted dramatically in 2020 and 2021 to large negative amounts of -11,569 thousand USD and -123,389 thousand USD, respectively, possibly indicating tax refunds or credits received in these years. The trend reversed again in 2022, with a positive cash tax outflow of 13,307 thousand USD, which slightly increased to 18,513 thousand USD in 2023, before dropping significantly to 3,462 thousand USD in early 2024. This volatility suggests considerable fluctuations in tax cash payments, perhaps influenced by changes in taxable income, tax planning, or timing differences in tax settlements.
Invested Capital
GameStop Corp., invested capital calculation (financing approach)
US$ in thousands
Based on: 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 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).
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.
7 Subtraction of construction-in-progress.
8 Subtraction of marketable securities.
- Total Reported Debt & Leases
- The total reported debt and leases demonstrate a clear downward trend over the reported periods. Beginning at approximately 1.62 billion US dollars in early 2019, the debt significantly decreases to around 1.19 billion by early 2020, continuing to decline in subsequent years, reaching approximately 603 million by early 2024. This consistent reduction indicates a strategic effort to deleverage or reduce liabilities.
- Stockholders’ Equity
- The stockholders’ equity shows a volatile pattern with initial declines followed by a strong recovery. Equity dropped sharply from about 1.34 billion in 2019 to 612 million in 2020, and further down to 437 million in 2021, reflecting potential losses or other negative impacts. However, a notable turnaround occurs in 2022, with equity rising dramatically to 1.6 billion and slightly decreasing to around 1.34 billion near 2024. This recovery may be indicative of improved profitability or capital restructuring efforts.
- Invested Capital
- Invested capital closely follows the trends observed in debt and equity, exhibiting a general decline from 3.0 billion in early 2019 to about 1.66 billion in early 2021. A significant rebound is evident in 2022, with invested capital climbing back to roughly 2.44 billion, before declining once again to approximately 1.86 billion by early 2024. This fluctuation suggests shifts in capital deployment and possibly changes in operational scale or investment strategy during these years.
Cost of Capital
GameStop Corp., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, net3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-02-03).
1 US$ in thousands
2 Equity. See details »
3 Debt, net. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, net3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-01-28).
1 US$ in thousands
2 Equity. See details »
3 Debt, net. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, net3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, net3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, net3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, net3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 »
Economic Spread Ratio
GameStop Corp., economic spread ratio calculation, comparison to benchmarks
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | |||||||
| Invested capital2 | |||||||
| Performance Ratio | |||||||
| Economic spread ratio3 | |||||||
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
Based on: 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 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).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Economic Profit
- The economic profit exhibited a fluctuating yet generally improving trend over the analyzed periods. Beginning with a significant negative value of -909,694 thousand US dollars in early 2019, the loss narrowed substantially by 2020 to -428,936 thousand US dollars. Despite some setbacks in 2022 and 2023, where losses increased again, the overall trajectory by early 2024 showed further reduction in negative economic profit, reaching -149,751 thousand US dollars. This pattern indicates ongoing challenges in generating positive economic profits but with a gradual movement toward less severe losses.
- Invested Capital
- Invested capital demonstrated considerable volatility throughout the timeline. It started at 2,995,218 thousand US dollars in 2019, then declined sharply to 1,926,200 thousand US dollars by 2020 and continued to fall to 1,656,300 thousand US dollars in 2021. Following this decrease, invested capital rebounded strongly in 2022 to 2,440,500 thousand US dollars but decreased again in the subsequent years, finishing at 1,857,700 thousand US dollars in early 2024. These fluctuations suggest dynamic changes in the company’s asset base or investment levels, reflecting possible shifts in strategy or operational scaling.
- Economic Spread Ratio
- The economic spread ratio, a measure of profitability relative to invested capital, exhibited improvement over the period but remained negative throughout. Initially, it was deeply negative at -30.37% in early 2019, then improved considerably to -22.27% in 2020. In 2021, the ratio became less negative at -8.54%, indicating reduced losses relative to invested capital. However, 2022 and 2023 saw some deterioration to around -16.95% and -15.18%, respectively, before improving again towards -8.06% in early 2024. The persistent negative values underscore ongoing deficits in generating returns above the cost of capital, though the tendency toward improvement reflects increased efficiency or profitability in more recent years.
Economic Profit Margin
GameStop Corp., economic profit margin calculation, comparison to benchmarks
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | |||||||
| Net sales | |||||||
| Add: Increase (decrease) in deferred revenue | |||||||
| Adjusted net sales | |||||||
| Performance Ratio | |||||||
| Economic profit margin2 | |||||||
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
Based on: 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 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).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × ÷ =
3 Click competitor name to see calculations.
- Adjusted Net Sales
- The adjusted net sales demonstrate a fluctuating downward trend over the examined periods. Beginning at approximately 8.28 billion USD in early 2019, sales decreased sharply to about 6.46 billion USD by early 2020 and continued declining to roughly 5.09 billion USD in early 2021. Although there was a partial recovery to around 6.03 billion USD in early 2022, sales again declined in subsequent years, reaching approximately 5.19 billion USD by early 2024.
- Economic Profit
- The economic profit figures indicate persistent losses throughout the entire period, albeit with varying magnitudes. The highest loss occurred in early 2019 with an economic profit of approximately -910 million USD. Losses decreased significantly by early 2021 to approximately -141 million USD, representing the smallest loss in the timeframe. However, losses again intensified in early 2022 to about -414 million USD before gradually improving in the following years, reaching around -150 million USD in early 2024.
- Economic Profit Margin
- The economic profit margin, expressed as a percentage, aligns with the pattern observed in economic profit, remaining negative across all periods. Initially, the margin was roughly -11%, indicating substantial inefficiency. It improved markedly by early 2021 to near -2.78%, showing a reduction in negative profitability. Subsequent periods saw some deterioration of the margin, with values around -6.86% in early 2022 and then gradual improvement in the last two periods, ending close to -2.89% by early 2024.
- Summary and Insights
- The company's performance reveals consistent challenges in achieving positive economic profit despite fluctuations in sales. The adjusted net sales exhibit a general decline from 2019 to 2024, with a notable dip in 2021 and a slight recovery in 2022 followed by a decrease thereafter. Economic profit losses decreased considerably by 2021 but worsened in 2022, likely impacted by external or internal factors, before improving again. The economic profit margin follows a similar pattern, suggesting efforts to increase profitability have partially succeeded but not sufficiently to achieve positive returns. The data suggest the need for continued focus on operational efficiency and revenue growth to convert negative economic profits into sustainable positive results.