GameStop Corp. (NYSE:GME)

Return on Assets (ROA)

The Return on Assets exhibited a negative trend from 2019 to 2023, starting at -16.64% in 2019 and remaining below -10% for the subsequent years, with the lowest negative value at -16.7% in 2020. There was a notable improvement in 2021, when ROA increased to -8.71%, followed by slight declines in 2022 and 2023, though still negative. A significant positive change occurred in 2024, with ROA turning positive at 0.25%, indicating an improved ability to generate profits from assets.

Financial Leverage

Financial leverage fluctuated over the years. It increased steadily from 3.03 in 2019 to a peak of 5.66 in 2021, suggesting growing reliance on debt relative to equity during this period. However, starting in 2022, the ratio decreased sharply to 2.18 and continued to decline moderately through 2024, reaching 2.02. This trend indicates a reduction in leverage and possibly a shift toward maintaining a more conservative capital structure.

Return on Equity (ROE)

Return on Equity mirrored the pattern observed in ROA, showing deep negative returns throughout the early periods. Beginning at -50.37% in 2019, it worsened notably in 2020 to -77.01%. Improvement was observed from 2021 onwards, climbing gradually to -49.3% in 2021 and further increasing towards -23.68% by 2023. The transition to a positive ROE of 0.5% in 2024 marks a significant turnaround, reflecting enhanced profitability relative to shareholder equity.

Net Profit Margin

The net profit margin showed an improving trend overall, starting from a negative -8.12% in early 2019 and reaching a slightly positive value of 0.13% by early 2024. This improvement suggests a gradual reduction in losses, with the margin becoming nearly break-even in the latest period. Although the margin fluctuated, there was a notable reduction in negative margin levels particularly after 2021.

Asset Turnover

Asset turnover initially increased from 2.05 in 2019 to a peak of 2.29 in 2020, indicating improved efficiency in utilizing assets to generate revenue. Following this peak, it declined to 1.72 in 2022 but then rebounded moderately to 1.95 by early 2024. Despite some volatility, asset turnover levels remain relatively stable and suggest consistent operational activity relative to asset base.

Financial Leverage

Financial leverage experienced significant fluctuations over the period. It increased sharply from 3.03 in 2019 to a peak of 5.66 in 2021, indicating an increased reliance on debt or equity financing during that time. However, leverage reduced substantially thereafter, dropping to 2.02 by 2024. This reduction may point to a strategic effort toward deleveraging and strengthening the balance sheet.

Return on Equity (ROE)

ROE was consistently negative until the most recent period, reflecting ongoing difficulties in generating returns on shareholder equity. It declined steeply from -50.37% in 2019 to -77.01% in 2020 and remained negative through 2023, although improving gradually in magnitude. The latest figure of 0.5% turns positive for the first time in the period analyzed, indicating a tentative return to profitability and value creation for equity holders.

Tax Burden

The Tax Burden ratio is only available for the most recent period, registering at 0.51. The absence of prior data limits trend analysis, but the current figure indicates that approximately half of the earnings before tax is retained after taxes in the latest reporting period.

Interest Burden

Interest Burden data is also only reported for the latest period, showing a ratio of 1. This suggests that the company had no interest expenses affecting its earnings before tax in the most recent year, indicating reduced financial costs or debt service obligations at that time.

EBIT Margin

The EBIT Margin has shown a consistent negative trend from 2019 through 2023, ranging from -6.93% to -5.1%, indicating operating losses throughout these years. However, in the latest period, there is a significant positive turnaround with an EBIT Margin of 0.25%, reflecting an improvement in operational profitability and possibly a shift toward breakeven or profitability at the operational level.

Asset Turnover

Asset Turnover experienced an initial increase from 2.05 in 2019 to a peak of 2.29 in 2020, followed by a decline to 1.72 in 2022. Subsequently, there has been a recovery trend, with values increasing to 1.9 in 2023 and further to 1.95 in 2024. This indicates fluctuations in the company’s efficiency in utilizing assets to generate revenue, with recent improvements suggesting enhanced asset productivity.

Financial Leverage

Financial Leverage showed an increasing trend from 3.03 in 2019, peaking at 5.66 in 2021, indicating growing reliance on debt or other liabilities to finance assets. However, from 2021 onward, leverage decreased sharply to 2.18 in 2022 and continued to decline to 2.02 by 2024. This reduction reflects efforts to deleverage the balance sheet, leading to a lower risk profile and potential cost of capital reduction.

Return on Equity (ROE)

ROE was negative in all years from 2019 to 2023, with the worst performance in 2020 at -77.01%, signaling significant losses relative to shareholder equity. There is a noticeable improvement over time, culminating in a slight positive ROE of 0.5% in 2024. This change indicates a move toward generating returns for shareholders, albeit modest, reflecting the combined effects of operational improvements, reduced financial leverage, and profitability gains.

Net Profit Margin

The net profit margin exhibited a generally negative trend from February 2019 through January 2023, fluctuating in the range between -8.12% and -4.23%. The margins improved slightly in 2021 compared to 2019 and 2020 but then declined again in 2022 and 2023. A notable positive shift occurred by February 2024, with the margin turning marginally positive at 0.13%, indicating a potential turnaround in profitability.

Asset Turnover

Asset turnover showed a peak in February 2020 at 2.29, indicating higher efficiency in using assets to generate revenue during that period. Following this peak, there was a decline to 1.72 in January 2022, the lowest value in the period. Subsequently, there was a moderate recovery, rising to 1.9 in January 2023 and slightly further to 1.95 by February 2024, suggesting gradual improvements in asset utilization.

Return on Assets (ROA)

Return on assets remained negative across most of the reported periods, starting at -16.64% in February 2019 and worsening slightly to -16.7% in 2020. An improvement was observed in 2021, with ROA increasing to -8.71%, followed by a slight decline in subsequent years, reaching -10.06% in January 2023. By February 2024, ROA shifted to a marginally positive value of 0.25%, aligning with the positive net profit margin and indicating an improved capability of the company to generate profit from its assets.

The financial data reveals several key trends concerning profitability and efficiency metrics over the periods analyzed.

Tax Burden

The tax burden ratio is only available for the most recent period (Feb 3, 2024) at 0.51, which suggests that the company retained around half of its pre-tax earnings after taxes during that year. Historical data is lacking for earlier periods.

Interest Burden

The interest burden is reported as 1 in the latest period, indicating no interest expense impact on earnings before interest and taxes for that year. The absence of earlier data limits trend analysis in this category.

EBIT Margin (%)

The EBIT margin has shown a general trend of improvement from negative values towards a positive margin:

• Starting at -6.93% in Feb 2019, the margin improved slightly each year, reaching -4.65% in Jan 2021.
• The company experienced some fluctuation with a decline to -6.13% in Jan 2022 and then an improvement again to -5.1% in Jan 2023.
• In the most recent period (Feb 2024), EBIT margin has turned positive to 0.25%, indicating a transition from operating losses to operating profitability.

Asset Turnover (ratio)

Asset turnover measures how efficiently the company uses its assets to generate revenue. The data shows:

• An initial increase from 2.05 in Feb 2019 to 2.29 in Feb 2020, indicating improved efficiency.
• A decline to 2.06 in Jan 2021 and further down to 1.72 in Jan 2022, highlighting reduced efficiency in asset utilization.
• A recovery in the following years to 1.9 in Jan 2023 and 1.95 in Feb 2024, suggesting a partial rebound in asset usage effectiveness.

Return on Assets (ROA) (%)

ROA has followed a similar pattern to EBIT margin, reflecting profitability trends relative to asset base:

• Persistently negative ROA from -16.64% in Feb 2019 to -8.71% in Jan 2021, showing deep losses relative to assets.
• ROA deteriorated again to -10.9% in Jan 2022, then slightly improved to -10.06% in Jan 2023.
• In Feb 2024, ROA turned positive at 0.25%, correlating with the turn to profitability observed in EBIT margins, signaling a positive shift in asset profitability.

Overall, the data indicates a consistent trend of operating losses through the initial years up to 2023, with significant improvements in the latest period leading to a positive turnaround in profitability and asset returns. Asset turnover experienced fluctuations but shows signs of stabilization in more recent years. Limited data is available for tax and interest burden metrics, though the latest values suggest improved tax efficiency and no interest expense impact on earnings.

Tax Burden

The tax burden data is available only for the most recent period ending February 3, 2024, with a ratio of 0.51. The absence of earlier data prevents assessment of any trend over multiple periods.

Interest Burden

Similar to the tax burden, interest burden data is only reported for the latest period at a ratio of 1. This indicates that in the most recent year, interest expenses did not reduce earnings before taxes, but historical comparison is not feasible due to missing prior data.

EBIT Margin

From February 2, 2019, through January 28, 2023, the EBIT margin has remained negative, indicating consistent operational losses. The margin improved slightly from -6.93% in 2019 to -4.65% in 2021 but then deteriorated again to -6.13% in 2022 and -5.1% in 2023. The most recent figure for 2024 shows a positive EBIT margin of 0.25%, suggesting a potential turnaround in operational profitability after several years of losses.

Net Profit Margin

The net profit margin follows a similar pattern to the EBIT margin. It was negative across all years from 2019 to 2023, fluctuating from -8.12% in 2019 and improving to -4.23% in 2021. However, it then worsened to -6.34% in 2022 and slightly improved to -5.28% in 2023. The most recent year shows a positive net profit margin of 0.13%, indicating a possible shift to net profitability after years of losses.