GameStop Corp. (NYSE:GME)

Debt to Equity

The debt to equity ratio initially increased from 0.61 in early 2019 to a peak of 0.83 in early 2021, indicating a rising proportion of debt relative to equity. Subsequently, there was a sharp decline in this ratio to 0.03 by early 2022, with minimal further decrease through early 2024. This suggests a significant reduction in the reliance on debt financing compared to equity over the last three years.

Debt to Equity (Including Operating Lease Liability)

When including operating lease liabilities, the debt to equity ratio showed higher values, rising significantly from 0.61 in early 2019 to 2.4 in early 2021. A marked decrease occurred thereafter, dropping to 0.4 in early 2022, followed by a slight increase to 0.47 and 0.45 in the subsequent years. This reflects a notable reduction in overall leverage when factoring in leases, though the company maintained some lease-related obligations.

Debt to Capital

The debt to capital ratio exhibited a gradual increase from 0.38 in early 2019 to 0.45 in early 2021. A dramatic decline then occurred, falling to 0.03 by early 2022 and remaining stable at this low level through early 2024. This indicates a decreased proportion of debt in the company's capital structure, emphasizing an enhanced equity base or debt repayments.

Debt to Capital (Including Operating Lease Liability)

Including operating leases, the debt to capital ratio rose significantly from 0.38 in early 2019 to 0.71 in early 2021. There was a sharp decline afterward to 0.29 by early 2022, with moderate increases to 0.32 and 0.31 in the following years. This trend underscores the impact of lease liabilities on the company's capital structure, which has been reduced considerably but remains meaningful.

Debt to Assets

The debt to assets ratio steadily decreased from 0.20 in early 2019 and 0.15 in 2020 and 2021, to a very low 0.01 from early 2022 onward. This signifies a substantial decrease in debt relative to total assets, reflecting an improvement in asset coverage or diminished debt levels.

Debt to Assets (Including Operating Lease Liability)

When including operating lease liabilities, the debt to assets ratio was notably higher, increasing from 0.20 in early 2019 to 0.42 in early 2020 and 2021, indicating high leverage relative to assets including lease obligations. From early 2022, this ratio declined to 0.19 and remained near 0.20-0.22 in subsequent years, indicating some retained lease-related obligations despite overall debt reductions.

Financial Leverage

Financial leverage, which reflects total assets relative to equity, rose sharply from 3.03 in early 2019 to a peak of 5.66 in early 2021. Thereafter, it declined substantially to around 2.0-2.35 from early 2022 through early 2024. This pattern suggests that the company's equity base strengthened or asset base shifted, leading to reduced reliance on leveraged financing.

Interest Coverage

Interest coverage ratios were negative throughout the periods with values of -12.26, -10.09, -6.94, and a further decline to -13.7 between early 2019 and early 2022. Data is unavailable for the last two periods. Persistent negative coverage indicates the company consistently incurred operating losses or insufficient earnings to cover interest expenses over these years.

Fixed Charge Coverage

Fixed charge coverage ratios showed significant volatility. Beginning at negative levels (-0.82 in early 2019 and -0.12 in early 2020), the ratio briefly improved to a positive 0.22 in early 2021, followed by renewed declines to -0.22 and -0.09 in early 2022 and 2023. By early 2024, the ratio improved sharply to a positive 1.05. This trend indicates fluctuating ability to cover fixed charges, with recent improvement suggesting better earnings or expense management related to fixed obligations.

Total Debt

The total debt exhibits a pronounced declining trend over the review period. Starting at a peak of $820.8 million in February 2019, the debt sharply decreased to $419.8 million by February 2020 and continued to drop to $362.7 million by January 2021. Subsequently, the reduction accelerated, reaching $44.6 million in January 2022 and further diminishing to $39.5 million and $28.5 million by January 2023 and February 2024, respectively. This significant deleveraging suggests an active effort to reduce financial liabilities.

Stockholders’ Equity

Stockholders’ equity experienced notable fluctuations throughout the periods analyzed. Initially at approximately $1.336 billion in February 2019, it significantly declined to $611.5 million by February 2020 and further down to $436.7 million by January 2021. However, from January 2022 onward, there was a marked recovery and growth, with equity rising sharply to $1.6025 billion, before decreasing slightly but stabilizing around $1.3223 billion and $1.3386 billion by January 2023 and February 2024, respectively. This pattern indicates a phase of contraction followed by substantial capital strengthening.

Debt to Equity Ratio

The debt to equity ratio follows a downward trend consistent with the reductions in total debt and the fluctuations in equity. Beginning at 0.61 in February 2019, it increased slightly to 0.69 and 0.83 in the subsequent two years, reflecting relatively higher leverage as equity declined. From January 2022, the ratio dramatically fell to 0.03, maintaining this very low level through January 2023 and February 2024, with a minor decrease to 0.02 in the final period. This substantial decrease illustrates a strategic shift towards a significantly lower financial leverage position.

Total Debt (including operating lease liability)

The total debt level experienced fluctuations over the examined periods. It increased notably from 820.8 million USD in 2019 to a peak of 1.1885 billion USD in 2020. Subsequently, the debt declined to 1.0468 billion USD in 2021 and then sharply decreased to 649 million USD in 2022. In the two most recent years, 2023 and 2024, the total debt continued to decline modestly to 616.6 million USD and 602.8 million USD, respectively, indicating a trend toward debt reduction after the 2020 peak.

Stockholders’ Equity

Stockholders’ equity exhibited a generally volatile pattern. It dropped significantly from 1.3362 billion USD in 2019 to a low of 436.7 million USD in 2021. After this decline, equity rebounded strongly, reaching 1.6025 billion USD in 2022. However, it declined again over the subsequent two years, settling at approximately 1.3223 billion USD in 2023 and slightly increasing to 1.3386 billion USD in 2024. This suggests periods of both substantial value erosion and recovery within the shareholders’ equity base.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio indicates significant shifts in financial leverage over time. The ratio rose sharply from 0.61 in 2019 to 1.94 in 2020, peaking at 2.4 in 2021, which reflects a period of increased leverage and potentially higher financial risk. However, there was a dramatic decrease to 0.4 in 2022, aligning with the observed reduction in debt and the recovery in equity. The ratio remained stable and low in 2023 and 2024, at 0.47 and 0.45 respectively, suggesting a more conservative capital structure and reduced leverage in the latest periods.

Overall Analysis

The data reveals a period of increased leverage and debt accumulation around 2020 and 2021, likely reflecting strategic or operational challenges resulting in elevated financial risk. The subsequent years display a concerted effort to reduce debt and strengthen equity, leading to improved leverage metrics. The current capital structure as of 2024 demonstrates relatively low debt levels and a strengthened equity base, indicating a more stable financial position than during the peak leverage years.

Total Debt

The total debt demonstrates a clear downward trend over the analyzed periods. Starting from a high of 820,800 thousand US dollars in early 2019, the debt level declined significantly, reaching 28,500 thousand US dollars by early 2024. This represents a substantial reduction in debt, indicating improved debt management or repayment activities over the years.

Total Capital

Total capital shows significant fluctuation throughout the periods. Initially, it decreased from 2,157,000 thousand US dollars in early 2019 to 799,400 thousand US dollars in early 2021, marking a pronounced contraction. Subsequently, there was a notable recovery, with capital rising to over 1,647,100 thousand US dollars by early 2022 before slightly declining but remaining relatively stable around 1,367,100 thousand US dollars in early 2024. This pattern may reflect strategic capital restructuring or variations in equity and debt financing.

Debt to Capital Ratio

The debt to capital ratio remained fairly stable between 0.38 and 0.45 from early 2019 through early 2021, which implies a consistent leverage level during that period. However, from early 2022 onwards, there is a sharp decrease to 0.03 and then 0.02 by early 2024, indicating a major reduction in leverage and a healthier capital structure with relatively low reliance on debt financing. This aligns with the observed substantial decrease in total debt and the partial recovery of total capital.

The analysis of the financial data over the six-year period reveals several notable trends in the company's debt and capital structure.

Total Debt (including operating lease liability)

The total debt increased significantly from 820,800 thousand USD in 2019 to a peak of 1,188,500 thousand USD in 2020. Subsequently, it declined steadily year by year, falling to 602,800 thousand USD by 2024. This pattern indicates an initial increase in leverage followed by consistent debt reduction efforts over the last four years.

Total Capital (including operating lease liability)

Total capital exhibited a fluctuating trend. It started at 2,157,000 thousand USD in 2019, then decreased to 1,483,500 thousand USD in 2021. After this decline, capital rose substantially to 2,251,500 thousand USD in 2022 before decreasing slightly in the two subsequent years, ending at 1,941,400 thousand USD in 2024. This suggests volatility in the capital structure, with a notable rebound in 2022.

Debt to Capital Ratio (including operating lease liability)

This ratio increased sharply from 0.38 in 2019 to a high of 0.71 in 2021, indicating that debt constituted a larger portion of total capital during this period. After 2021, the ratio dropped significantly to 0.29 in 2022 and remained relatively stable around 0.31 through 2024. This reflects a strategic reduction in leverage and an improvement in the balance between debt and capital.

Overall, the company experienced an escalation in its debt levels until 2020-2021, followed by a marked deleveraging phase. Meanwhile, capital levels showed less consistency but increased notably in 2022, potentially supporting the reduction in debt ratio. This dynamic signifies an active management of financial leverage and a possible shift toward a more stable capital structure in recent years.

Total Debt

The total debt shows a significant decline over the analyzed period. Starting at $820,800 thousand in early 2019, there is a steady reduction to $419,800 thousand in 2020 and further decreases in the following years, reaching $28,500 thousand by early 2024. This trend indicates a strong deleveraging effort by the company, significantly lowering its financial obligations.

Total Assets

Total assets exhibit variability throughout the period. After an initial decrease from $4,044,300 thousand in early 2019 to $2,819,700 thousand in 2020 and further down to $2,472,600 thousand in 2021, assets increase markedly to $3,499,300 thousand in 2022. This is followed by a slight downward trend, with assets at $2,709,000 thousand in early 2024. Despite the fluctuations, the recent figures remain below the 2019 peak.

Debt to Assets Ratio

The debt to assets ratio demonstrates a pronounced declining pattern over the years. It decreases from 0.20 in 2019 to 0.15 in 2020 and 2021, and then sharply falls to 0.01 from 2022 onward. This indicates an improved balance sheet structure, with debt representing a much smaller proportion of the total assets, reflecting depleted leverage and stronger asset backing relative to debt.

Overall Analysis

The company has substantially reduced its debt load while managing fluctuations in asset values. The decreasing debt to assets ratio signifies enhanced financial stability and a conservative approach to leverage. Although total assets have not fully recovered to the initial 2019 level by early 2024, the trend suggests ongoing efforts to streamline and optimize the asset base in conjunction with debt reduction. This combination strengthens the financial position and reduces risk exposure related to debt obligations.

Total Debt (including operating lease liability)

The total debt showed an upward trend reaching a peak in the period ending February 1, 2020, at 1,188,500 thousand US dollars. Following this peak, the debt level declined significantly over the subsequent years, dropping to 602,800 thousand US dollars by February 3, 2024. This indicates a progressive reduction in leverage from 2020 onwards.

Total Assets

Total assets experienced a decline from 4,044,300 thousand US dollars in February 2019 to 2,479,600 thousand US dollars in January 2021. There was a recovery in the next year reaching 3,499,300 thousand US dollars in January 2022, followed by a gradual decrease again to 2,709,000 thousand US dollars by February 2024. Overall, the asset base contracted significantly over the five-year period with some fluctuations.

Debt to Assets Ratio (including operating lease liability)

The debt to assets ratio increased sharply from 0.2 in February 2019 to 0.42 by February 2020, remaining stable at that level through January 2021. It then fell precipitously to 0.19 in January 2022, before rising slightly to 0.22 in February 2024. This pattern reflects initial higher leverage, followed by deleveraging and somewhat stable moderate leverage in the latest periods.

Total assets

The total assets demonstrated a fluctuating pattern over the analyzed periods. Beginning at approximately 4.04 billion USD in early 2019, the assets decreased significantly through early 2021, reaching about 2.47 billion USD. This was followed by a recovery to about 3.5 billion USD in early 2022. However, subsequent years saw a decline again, falling to around 2.71 billion USD by early 2024.

Stockholders’ equity

Stockholders’ equity showed considerable volatility during the timeframe observed. Starting from 1.34 billion USD in early 2019, equity dropped sharply to 437 million USD by early 2021. A substantial recovery occurred in early 2022, with equity rising to 1.6 billion USD. Afterward, the equity levels slightly decreased but remained relatively stable around 1.33 billion USD through early 2024.

Financial leverage

The financial leverage ratio experienced notable fluctuations. Initially at 3.03 in early 2019, leverage increased markedly to a peak of 5.66 by early 2021, suggesting a higher reliance on debt relative to equity during this period. Subsequently, the leverage ratio declined significantly in early 2022 to 2.18 and continued a gradual reduction, reaching 2.02 by early 2024. This trend indicates a move towards a more conservative capital structure with lower financial risk.

Summary of trends

Overall, the data reflects a period of decline in asset base and equity through early 2021, accompanied by increased financial leverage and thus greater financial risk. The situation reversed strongly in early 2022, with assets and equity rebounding and leverage decreasing to more moderate levels. By early 2024, both assets and equity showed some reduction compared to the peak levels but maintained a lower leverage ratio than earlier years, signaling improved financial stability and reduced dependence on debt financing.

The financial data reveals several notable trends in the company's earnings and interest-related metrics over the six-year period from 2019 to 2024.

Earnings Before Interest and Tax (EBIT)

The EBIT figures show substantial volatility across the years, with all values negative except for the final year. From February 2019 to January 2023, EBIT, expressed in thousands of US dollars, indicates consistent operating losses, though the magnitude of these losses generally decreases over time. The loss was highest in February 2019 at -696,300 and reduced to -302,100 by January 2023, suggesting some operational improvements or cost controls in recent years. A significant positive shift appears in February 2024, where EBIT turns positive with a value of 13,100. This reversal signifies a potential improvement in profitability or a structural change in operations leading to earnings before interest and taxes becoming positive.

Interest Expense

Interest expense shows a decreasing trend over the four reported periods, starting from 56,800 thousand US dollars in February 2019 and declining steadily to 26,900 thousand by January 2022. The data for 2023 and 2024 is missing, which limits the ability to comment on more recent trends. Nonetheless, the downward trend in interest expenses over the available years may suggest debt reduction, refinancing at lower interest rates, or improved financial management lowering borrowing costs.

Interest Coverage Ratio

The interest coverage ratio remains negative throughout the recorded periods, indicating that EBIT was insufficient to cover interest expenses in each year provided. The ratio moves from -12.26 in February 2019 to -13.7 by January 2022, which implies a worsening ability to cover interest from operating earnings during this timeframe. Data for 2023 and 2024 isn't available, but given the positive EBIT reported in 2024, it could be expected that the interest coverage ratio might improve going forward. However, the missing data prevents confirmation of this trend.

In summary, the data reflects a company struggling with operating losses and high interest burdens in the majority of the years, though improvements in EBIT and reduced interest expenses are evident leading up to 2024. The positive EBIT figure in 2024 may signal a turnaround, but the absence of data on interest expenses and coverage ratio for the latter years limits a full assessment of financial health in the most recent periods.

The financial data reveals significant fluctuations in the company's earnings before fixed charges and taxes over the analyzed periods, moving from a substantial negative value towards positive territory in the most recent period. Fixed charges show a consistent downward trend over time, although there is a slight increase in the latest period. The fixed charge coverage ratio, which measures the ability to cover fixed charges with earnings, follows a similar trajectory with values initially deeply negative, improving gradually, and ultimately surpassing the threshold of 1 in the final period.

Earnings before fixed charges and tax

Initially, the earnings were deeply negative, indicating substantial operating losses before accounting for fixed charges and taxes. Improvement was observed in the middle periods, with earnings turning positive in one period before falling back into negative territory. The latest period demonstrates a marked recovery, with earnings becoming positive and significantly higher than in previous years.

Fixed charges

Fixed charges exhibit a steady decline from the first period to the most recent, reflecting potentially lower interest expenses or lease obligations. However, the latest year shows a minor increase compared to the prior year, indicating a slight rise in fixed financial obligations.

Fixed charge coverage ratio

This ratio, which is critical for assessing the capacity to meet fixed obligations, was strongly negative in the earlier years, signifying an inability to cover fixed charges through earnings. The ratio improved gradually over time, briefly turning positive, then dipping again into negative territory, and finally achieving a level above 1 in the last period. This final improvement suggests a recent strengthening in financial stability, with earnings now sufficiently covering fixed charges.