Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
GameStop Corp., solvency ratios
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).
A significant shift in the solvency profile is evident between the 2019-2021 period and the 2022-2024 period. The earlier phase was characterized by rising leverage and increased debt reliance, while the subsequent period shows a drastic reduction in traditional debt obligations, resulting in a highly deleveraged capital structure.
- Capital Structure and Debt-to-Equity Trends
- Debt to equity ratios experienced a steady climb from 0.61 in 2019 to a peak of 0.83 in 2021. However, a sharp contraction occurred in 2022, with the ratio dropping to 0.03 and remaining near zero through 2024. A similar pattern is observed in the debt to capital ratio, which peaked at 0.45 in 2021 before declining to 0.02 by 2024. These trends indicate a fundamental transition away from debt financing.
- Impact of Operating Lease Liabilities
- When operating lease liabilities are included, the solvency metrics present a different perspective. The debt to equity ratio including leases peaked significantly higher at 2.40 in 2021. While this ratio declined after 2021, it remained substantially higher than the traditional debt to equity ratio, settling at 0.45 in 2024. This suggests that operating leases now constitute the primary component of the company's long-term liabilities.
- Asset Leverage and Financial Risk
- Debt to assets ratios decreased from a high of 0.20 in 2019 to a negligible 0.01 by 2024, excluding leases. When including leases, the ratio peaked at 0.42 in 2020 and 2021 before moderating to 0.22 in 2024. Financial leverage followed a similar trajectory, peaking at 5.66 in 2021 before stabilizing around 2.02 in 2024, indicating a reduced risk of insolvency from a structural standpoint.
- Coverage Ratios and Debt Servicing
- Interest coverage ratios remained consistently negative from 2019 through 2022, indicating an inability to cover interest expenses with operating income during those years. Fixed charge coverage showed more volatility, remaining negative for most of the period with a brief positive spike to 0.22 in 2021. A notable recovery is observed in 2024, where the fixed charge coverage ratio reached 1.05, suggesting a recent improvement in the capacity to meet fixed obligations.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Debt to Equity
GameStop Corp., debt to equity 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) | |||||||
| Current portion of long-term debt | 10,800) | 10,800) | 4,100) | 121,700) | —) | 349,200) | |
| Borrowings under revolving line of credit | —) | —) | —) | 25,000) | —) | —) | |
| Long-term debt, excluding current portion | 17,700) | 28,700) | 40,500) | 216,000) | 419,800) | 471,600) | |
| Total debt | 28,500) | 39,500) | 44,600) | 362,700) | 419,800) | 820,800) | |
| Stockholders’ equity | 1,338,600) | 1,322,300) | 1,602,500) | 436,700) | 611,500) | 1,336,200) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 0.02 | 0.03 | 0.03 | 0.83 | 0.69 | 0.61 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Amazon.com Inc. | 0.24 | 0.39 | 0.59 | 0.54 | — | — | |
| Home Depot Inc. | 42.25 | 27.65 | — | 11.29 | — | — | |
| Lowe’s Cos. Inc. | — | — | — | 15.16 | — | — | |
| TJX Cos. Inc. | 0.39 | 0.53 | 0.56 | 1.04 | — | — | |
| Debt to Equity, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 0.54 | 0.82 | 1.06 | 0.93 | — | — | |
| Debt to Equity, Industry | |||||||
| Consumer Discretionary | 1.10 | 1.34 | 1.51 | 1.50 | — | — | |
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 2024 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 28,500 ÷ 1,338,600 = 0.02
2 Click competitor name to see calculations.
The solvency profile of the entity has undergone a fundamental transformation between 2019 and 2024. A consistent trajectory of deleveraging is evident, characterized by a drastic reduction in total debt and a substantial recovery and stabilization of stockholders' equity. This shift has resulted in a transition from a moderately leveraged capital structure to one with minimal debt reliance.
- Total Debt Trend
- A sustained downward trend is observed in total debt, which decreased from 820.8 million US$ in February 2019 to 28.5 million US$ in February 2024. The most significant contraction occurred between January 2021 and January 2022, during which total debt fell from 362.7 million US$ to 44.6 million US$.
- Stockholders' Equity Dynamics
- Equity levels exhibited significant volatility over the analyzed period. Stockholders' equity declined from 1.336 billion US$ in 2019 to a low of 436.7 million US$ in 2021. This was followed by a sharp increase to 1.602 billion US$ in 2022, eventually stabilizing at 1.338 billion US$ by February 2024.
- Debt to Equity Ratio Analysis
- The debt-to-equity ratio increased from 0.61 in 2019 to a peak of 0.83 in 2021, signaling a temporary increase in financial leverage. Subsequently, the ratio collapsed to 0.03 in 2022 and further declined to 0.02 by 2024. This indicates that the company's capital structure is now almost entirely equity-funded, significantly reducing solvency risk.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Debt to Equity (including Operating Lease Liability)
GameStop Corp., debt to equity (including operating lease liability) 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) | |||||||
| Current portion of long-term debt | 10,800) | 10,800) | 4,100) | 121,700) | —) | 349,200) | |
| Borrowings under revolving line of credit | —) | —) | —) | 25,000) | —) | —) | |
| Long-term debt, excluding current portion | 17,700) | 28,700) | 40,500) | 216,000) | 419,800) | 471,600) | |
| Total debt | 28,500) | 39,500) | 44,600) | 362,700) | 419,800) | 820,800) | |
| Current portion of operating lease liabilities | 187,700) | 194,700) | 210,700) | 227,400) | 239,400) | —) | |
| Operating lease liabilities, excluding current portion | 386,600) | 382,400) | 393,700) | 456,700) | 529,300) | —) | |
| Total debt (including operating lease liability) | 602,800) | 616,600) | 649,000) | 1,046,800) | 1,188,500) | 820,800) | |
| Stockholders’ equity | 1,338,600) | 1,322,300) | 1,602,500) | 436,700) | 611,500) | 1,336,200) | |
| Solvency Ratio | |||||||
| Debt to equity (including operating lease liability)1 | 0.45 | 0.47 | 0.40 | 2.40 | 1.94 | 0.61 | |
| Benchmarks | |||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||
| Amazon.com Inc. | 0.52 | 0.77 | 1.06 | 0.96 | — | — | |
| Home Depot Inc. | 50.04 | 32.24 | — | 13.16 | — | — | |
| Lowe’s Cos. Inc. | — | — | — | 18.24 | — | — | |
| TJX Cos. Inc. | 1.72 | 2.00 | 2.08 | 2.66 | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | |||||||
| Consumer Discretionary Distribution & Retail | 0.91 | 1.31 | 1.67 | 1.46 | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | |||||||
| Consumer Discretionary | 1.39 | 1.69 | 1.90 | 1.87 | — | — | |
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 2024 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 602,800 ÷ 1,338,600 = 0.45
2 Click competitor name to see calculations.
The solvency profile exhibits a period of acute financial volatility between 2019 and 2021, followed by a significant transition toward a more conservative capital structure from 2022 through 2024.
- Total Debt Trends
- Total debt, including operating lease liabilities, rose from US$ 820.8 million in 2019 to a peak of US$ 1.1885 billion in 2020. Following this peak, a sustained reduction is evident, with liabilities declining steadily to US$ 602.8 million by February 3, 2024.
- Stockholders' Equity Fluctuations
- Equity levels experienced a sharp contraction, falling from US$ 1.3362 billion in 2019 to a minimum of US$ 436.7 million in 2021. A substantial recovery occurred in 2022, with equity increasing to US$ 1.6025 billion, subsequently stabilizing at US$ 1.3386 billion by 2024.
- Debt to Equity Ratio Analysis
- The debt to equity ratio indicates a period of increasing leverage, peaking at 2.40 in 2021, which suggests a heightened reliance on borrowed funds relative to equity. This trend reversed abruptly in 2022, as the ratio dropped to 0.40. The ratio remained relatively stable thereafter, ending the period at 0.45 in 2024, reflecting a marked improvement in the long-term solvency position.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Debt to Capital
GameStop Corp., debt to capital 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) | |||||||
| Current portion of long-term debt | 10,800) | 10,800) | 4,100) | 121,700) | —) | 349,200) | |
| Borrowings under revolving line of credit | —) | —) | —) | 25,000) | —) | —) | |
| Long-term debt, excluding current portion | 17,700) | 28,700) | 40,500) | 216,000) | 419,800) | 471,600) | |
| Total debt | 28,500) | 39,500) | 44,600) | 362,700) | 419,800) | 820,800) | |
| Stockholders’ equity | 1,338,600) | 1,322,300) | 1,602,500) | 436,700) | 611,500) | 1,336,200) | |
| Total capital | 1,367,100) | 1,361,800) | 1,647,100) | 799,400) | 1,031,300) | 2,157,000) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.02 | 0.03 | 0.03 | 0.45 | 0.41 | 0.38 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Amazon.com Inc. | 0.19 | 0.28 | 0.37 | 0.35 | — | — | |
| Home Depot Inc. | 0.98 | 0.97 | 1.04 | 0.92 | — | — | |
| Lowe’s Cos. Inc. | 1.72 | 1.72 | 1.24 | 0.94 | — | — | |
| TJX Cos. Inc. | 0.28 | 0.35 | 0.36 | 0.51 | — | — | |
| Debt to Capital, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 0.35 | 0.45 | 0.51 | 0.48 | — | — | |
| Debt to Capital, Industry | |||||||
| Consumer Discretionary | 0.52 | 0.57 | 0.60 | 0.60 | — | — | |
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 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= 28,500 ÷ 1,367,100 = 0.02
2 Click competitor name to see calculations.
A comprehensive analysis of the solvency metrics reveals a fundamental transformation in the capital structure, characterized by a systematic elimination of debt and a significant shift toward equity-based financing.
- Total Debt Trends
- A consistent and aggressive reduction in total debt is observed over the six-year period. Debt levels fell from $820.8 million in February 2019 to $28.5 million by February 2024. The most pronounced decline occurred between January 2021 and January 2022, during which total debt plummeted from $362.7 million to $44.6 million, representing a reduction of approximately 87.7% in a single year.
- Total Capital Fluctuations
- Total capital exhibited significant volatility, initially decreasing from $2.16 billion in 2019 to a minimum of $799.4 million in 2021. A sharp reversal occurred in 2022, with total capital surging to $1.65 billion. Following this peak, the figure stabilized, ending the period at $1.37 billion in February 2024.
- Debt to Capital Ratio Interpretation
- The debt to capital ratio initially showed a moderate upward trend, increasing from 0.38 in 2019 to a peak of 0.45 in 2021, suggesting an increasing reliance on borrowed funds relative to total capital. However, a drastic correction occurred in 2022, as the ratio fell to 0.03. This downward trajectory continued to 0.02 by February 2024, indicating that debt now constitutes a negligible portion of the overall capital structure.
- Overall Solvency Insight
- The convergence of declining total debt and stabilized total capital has resulted in a near-complete eradication of financial leverage. The transition from a ratio of 0.45 to 0.02 reflects a strategic movement toward a highly conservative solvency position, substantially reducing the organization's financial risk and interest obligations.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Debt to Capital (including Operating Lease Liability)
GameStop Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of long-term debt | 10,800) | 10,800) | 4,100) | 121,700) | —) | 349,200) | |
| Borrowings under revolving line of credit | —) | —) | —) | 25,000) | —) | —) | |
| Long-term debt, excluding current portion | 17,700) | 28,700) | 40,500) | 216,000) | 419,800) | 471,600) | |
| Total debt | 28,500) | 39,500) | 44,600) | 362,700) | 419,800) | 820,800) | |
| Current portion of operating lease liabilities | 187,700) | 194,700) | 210,700) | 227,400) | 239,400) | —) | |
| Operating lease liabilities, excluding current portion | 386,600) | 382,400) | 393,700) | 456,700) | 529,300) | —) | |
| Total debt (including operating lease liability) | 602,800) | 616,600) | 649,000) | 1,046,800) | 1,188,500) | 820,800) | |
| Stockholders’ equity | 1,338,600) | 1,322,300) | 1,602,500) | 436,700) | 611,500) | 1,336,200) | |
| Total capital (including operating lease liability) | 1,941,400) | 1,938,900) | 2,251,500) | 1,483,500) | 1,800,000) | 2,157,000) | |
| Solvency Ratio | |||||||
| Debt to capital (including operating lease liability)1 | 0.31 | 0.32 | 0.29 | 0.71 | 0.66 | 0.38 | |
| Benchmarks | |||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||
| Amazon.com Inc. | 0.34 | 0.43 | 0.51 | 0.49 | — | — | |
| Home Depot Inc. | 0.98 | 0.97 | 1.04 | 0.93 | — | — | |
| Lowe’s Cos. Inc. | 1.60 | 1.60 | 1.20 | 0.95 | — | — | |
| TJX Cos. Inc. | 0.63 | 0.67 | 0.68 | 0.73 | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | |||||||
| Consumer Discretionary Distribution & Retail | 0.48 | 0.57 | 0.63 | 0.59 | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | |||||||
| Consumer Discretionary | 0.58 | 0.63 | 0.65 | 0.65 | — | — | |
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 2024 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 602,800 ÷ 1,941,400 = 0.31
2 Click competitor name to see calculations.
The solvency profile exhibits a period of significant volatility between 2019 and 2021, followed by a marked stabilization in leverage from 2022 through 2024. The overall trend indicates a strategic shift from increasing leverage to a more conservative capital structure.
- Total Debt Trends
- Total debt, including operating lease liabilities, rose from 820.8 million USD in 2019 to a peak of 1.19 billion USD in 2020. A consistent downward trajectory followed this peak, with debt levels falling to 649 million USD by January 2022 and reaching a period low of 602.8 million USD by February 2024.
- Total Capital Fluctuations
- Total capital experienced a contraction from 2.16 billion USD in 2019 to 1.48 billion USD in 2021. This was followed by a substantial increase to 2.25 billion USD in January 2022. In the final two years of the period, the capital base stabilized, remaining nearly constant at approximately 1.94 billion USD.
- Debt to Capital Ratio Dynamics
- The debt to capital ratio increased sharply from 0.38 in 2019 to a peak of 0.71 in 2021, signaling a significant increase in the proportion of debt relative to total capital. A reversal occurred in 2022, with the ratio dropping precipitously to 0.29. The ratio remained stable thereafter, ending at 0.31 in February 2024, which represents a significant reduction in financial leverage compared to the 2020-2021 peak.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Debt to Assets
GameStop Corp., debt to assets 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) | |||||||
| Current portion of long-term debt | 10,800) | 10,800) | 4,100) | 121,700) | —) | 349,200) | |
| Borrowings under revolving line of credit | —) | —) | —) | 25,000) | —) | —) | |
| Long-term debt, excluding current portion | 17,700) | 28,700) | 40,500) | 216,000) | 419,800) | 471,600) | |
| Total debt | 28,500) | 39,500) | 44,600) | 362,700) | 419,800) | 820,800) | |
| Total assets | 2,709,000) | 3,113,400) | 3,499,300) | 2,472,600) | 2,819,700) | 4,044,300) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.01 | 0.01 | 0.01 | 0.15 | 0.15 | 0.20 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Amazon.com Inc. | 0.11 | 0.15 | 0.19 | 0.18 | — | — | |
| Home Depot Inc. | 0.58 | 0.57 | 0.56 | 0.53 | — | — | |
| Lowe’s Cos. Inc. | 0.86 | 0.78 | 0.55 | 0.47 | — | — | |
| TJX Cos. Inc. | 0.10 | 0.12 | 0.12 | 0.20 | — | — | |
| Debt to Assets, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 0.20 | 0.24 | 0.25 | 0.24 | — | — | |
| Debt to Assets, Industry | |||||||
| Consumer Discretionary | 0.32 | 0.34 | 0.35 | 0.36 | — | — | |
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 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= 28,500 ÷ 2,709,000 = 0.01
2 Click competitor name to see calculations.
The analysis of the financial position from 2019 to 2024 reveals a systemic deleveraging process. There is a pronounced downward trend in total debt, which has transitioned the entity from a moderately leveraged position to one with negligible debt obligations relative to its asset base.
- Debt Trajectory
- Total debt exhibited a consistent decline over the six-year period, falling from 820.8 million USD in 2019 to 28.5 million USD in 2024. A critical pivot occurred between 2021 and 2022, during which total debt was reduced by approximately 87.7%, dropping from 362.7 million USD to 44.6 million USD.
- Asset Base Fluctuations
- Total assets demonstrated a non-linear trend. After a decline from 4.04 billion USD in 2019 to a low of 2.47 billion USD in 2021, assets peaked again in 2022 at 3.50 billion USD. By February 2024, total assets settled at 2.71 billion USD.
- Solvency Ratio Improvement
- The debt-to-assets ratio decreased from 0.20 in 2019 to 0.01 by 2022, maintaining this level through 2024. This indicates that the proportion of assets financed by debt has become virtually insignificant, substantially lowering the financial risk and increasing the solvency margin.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Debt to Assets (including Operating Lease Liability)
GameStop Corp., debt to assets (including operating lease liability) 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) | |||||||
| Current portion of long-term debt | 10,800) | 10,800) | 4,100) | 121,700) | —) | 349,200) | |
| Borrowings under revolving line of credit | —) | —) | —) | 25,000) | —) | —) | |
| Long-term debt, excluding current portion | 17,700) | 28,700) | 40,500) | 216,000) | 419,800) | 471,600) | |
| Total debt | 28,500) | 39,500) | 44,600) | 362,700) | 419,800) | 820,800) | |
| Current portion of operating lease liabilities | 187,700) | 194,700) | 210,700) | 227,400) | 239,400) | —) | |
| Operating lease liabilities, excluding current portion | 386,600) | 382,400) | 393,700) | 456,700) | 529,300) | —) | |
| Total debt (including operating lease liability) | 602,800) | 616,600) | 649,000) | 1,046,800) | 1,188,500) | 820,800) | |
| Total assets | 2,709,000) | 3,113,400) | 3,499,300) | 2,472,600) | 2,819,700) | 4,044,300) | |
| Solvency Ratio | |||||||
| Debt to assets (including operating lease liability)1 | 0.22 | 0.20 | 0.19 | 0.42 | 0.42 | 0.20 | |
| Benchmarks | |||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||
| Amazon.com Inc. | 0.24 | 0.29 | 0.33 | 0.31 | — | — | |
| Home Depot Inc. | 0.68 | 0.66 | 0.64 | 0.62 | — | — | |
| Lowe’s Cos. Inc. | 0.96 | 0.87 | 0.66 | 0.56 | — | — | |
| TJX Cos. Inc. | 0.42 | 0.45 | 0.44 | 0.50 | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | |||||||
| Consumer Discretionary Distribution & Retail | 0.33 | 0.38 | 0.40 | 0.38 | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | |||||||
| Consumer Discretionary | 0.41 | 0.43 | 0.44 | 0.44 | — | — | |
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 2024 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 602,800 ÷ 2,709,000 = 0.22
2 Click competitor name to see calculations.
The solvency profile over the observed period is characterized by a significant spike in leverage during 2020 and 2021, followed by a sustained period of debt reduction and a stabilization of the debt-to-assets ratio. The overall trend indicates a return to a more conservative financial structure after a period of increased risk.
- Total Debt Trends
- Total debt, including operating lease liabilities, peaked in February 2020 at approximately 1.19 billion US dollars. Following this peak, a consistent downward trajectory is observed, with debt levels decreasing annually to reach 602.8 million US dollars by February 2024. This represents a substantial reduction in total obligations compared to the 2020 high.
- Asset Volatility
- Total assets exhibited significant fluctuations throughout the period. A contraction is noted from 4.04 billion US dollars in 2019 to a low of 2.47 billion US dollars in 2021. While there was a notable recovery to 3.50 billion US dollars in 2022, asset levels have since declined to 2.71 billion US dollars by February 2024.
- Debt to Assets Ratio Analysis
- The debt-to-assets ratio experienced a sharp increase from 0.20 in 2019 to 0.42 in both 2020 and 2021, signaling a temporary increase in financial leverage. A significant correction occurred in 2022, where the ratio dropped to 0.19. In the subsequent years, the ratio has remained relatively stable, ending the period at 0.22 in 2024, which aligns closely with the baseline level observed at the start of the analysis period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Financial Leverage
GameStop Corp., financial leverage 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) | |||||||
| Total assets | 2,709,000) | 3,113,400) | 3,499,300) | 2,472,600) | 2,819,700) | 4,044,300) | |
| Stockholders’ equity | 1,338,600) | 1,322,300) | 1,602,500) | 436,700) | 611,500) | 1,336,200) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 2.02 | 2.35 | 2.18 | 5.66 | 4.61 | 3.03 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Amazon.com Inc. | 2.19 | 2.61 | 3.17 | 3.04 | — | — | |
| Home Depot Inc. | 73.30 | 48.94 | — | 21.39 | — | — | |
| Lowe’s Cos. Inc. | — | — | — | 32.52 | — | — | |
| TJX Cos. Inc. | 4.07 | 4.45 | 4.74 | 5.28 | — | — | |
| Financial Leverage, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 2.77 | 3.46 | 4.18 | 3.82 | — | — | |
| Financial Leverage, Industry | |||||||
| Consumer Discretionary | 3.44 | 3.95 | 4.32 | 4.22 | — | — | |
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 2024 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 2,709,000 ÷ 1,338,600 = 2.02
2 Click competitor name to see calculations.
An analysis of the financial leverage from 2019 to 2024 reveals a distinct cyclical pattern characterized by a period of increasing financial risk followed by a significant deleveraging phase. The overall solvency profile has shifted from a high-leverage position in 2021 to a more conservative capital structure by 2024.
- Financial Leverage Trend
- The financial leverage ratio exhibited a sharp upward trajectory between February 2019 and January 2021, rising from 3.03 to a peak of 5.66. This trend indicates a substantial increase in the proportion of debt relative to equity during this period. However, a reversal occurred in January 2022, where the ratio dropped precipitously to 2.18, subsequently stabilizing and reaching its lowest point in the analyzed period at 2.02 by February 2024.
- Asset Volatility
- Total assets experienced a general decline over the six-year period, falling from 4,044,300 thousand US$ in 2019 to 2,709,000 thousand US$ in 2024. A notable temporary recovery occurred in January 2022, with assets peaking at 3,499,300 thousand US$ before resuming a downward trend through 2024.
- Stockholders' Equity Dynamics
- Equity levels showed significant instability, declining from 1,336,200 thousand US$ in 2019 to a low of 436,700 thousand US$ in 2021. This decline was the primary driver behind the spike in financial leverage. A massive infusion or increase in equity occurred by January 2022, with the value surging to 1,602,500 thousand US$, which effectively deleveraged the balance sheet. Equity levels have remained relatively stable since then, ending at 1,338,600 thousand US$ in February 2024.
- Solvency Interpretation
- The convergence of declining total assets and stabilized stockholders' equity has resulted in a strengthened solvency position. The reduction of the leverage ratio from 5.66 to 2.02 suggests a strategic shift toward lower financial risk and a reduced reliance on external financing to fund assets.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Interest Coverage
GameStop Corp., interest coverage 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) | |||||||
| Net income (loss) | 6,700) | (313,100) | (381,300) | (215,300) | (470,900) | (673,000) | |
| Less: Income (loss) from discontinued operations, net of tax | —) | —) | —) | (700) | (6,500) | 121,800) | |
| Add: Income tax expense | 6,400) | 11,000) | (14,100) | (55,300) | 37,600) | 41,700) | |
| Add: Interest expense | —) | —) | 26,900) | 34,000) | 38,500) | 56,800) | |
| Earnings before interest and tax (EBIT) | 13,100) | (302,100) | (368,500) | (235,900) | (388,300) | (696,300) | |
| Solvency Ratio | |||||||
| Interest coverage1 | — | — | -13.70 | -6.94 | -10.09 | -12.26 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Amazon.com Inc. | 29.48 | 12.80 | -1.51 | 22.09 | — | — | |
| Home Depot Inc. | 11.25 | 14.90 | 17.14 | 13.60 | — | — | |
| Lowe’s Cos. Inc. | 7.86 | 8.79 | 13.49 | 9.88 | — | — | |
| TJX Cos. Inc. | 76.53 | 56.19 | 37.80 | 1.46 | — | — | |
| Interest Coverage, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 18.69 | 13.19 | 7.64 | 15.91 | — | — | |
| Interest Coverage, Industry | |||||||
| Consumer Discretionary | 15.00 | 12.23 | 9.30 | 13.23 | — | — | |
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 2024 Calculation
Interest coverage = EBIT ÷ Interest expense
= 13,100 ÷ 0 = —
2 Click competitor name to see calculations.
The financial trajectory regarding solvency and interest servicing reveals a period of prolonged operational deficits followed by a significant shift toward profitability in the most recent fiscal year. The ability to cover interest obligations from operating earnings remained compromised for the majority of the analyzed period, characterized by consistently negative earnings before interest and tax (EBIT).
- Earnings Before Interest and Tax (EBIT)
- A persistent trend of negative EBIT was observed from 2019 through 2023, with losses peaking at US$ 696.3 million in February 2019. While there was a period of relative improvement between 2020 and 2021, losses widened again in 2022. However, a critical reversal occurred by February 3, 2024, when EBIT transitioned to a positive value of US$ 13.1 million, marking the first instance of operational profitability within the reported timeframe.
- Interest Expense
- Between 2019 and 2022, a consistent downward trend in interest expenses was recorded. Annual costs decreased from US$ 56.8 million in 2019 to US$ 26.9 million in 2022. This reduction suggests a decrease in the total debt burden or a refinancing of obligations at more favorable rates during that period.
- Interest Coverage Ratio
- The interest coverage ratio remained negative from 2019 to 2022, fluctuating between -6.94 and -13.70. These negative values indicate that the company's operating earnings were insufficient to meet its interest obligations, necessitating the use of cash reserves or additional financing to service debt. The volatility of this ratio mirrors the fluctuations in EBIT, with the most severe coverage deficiency occurring in 2022.
The transition to positive EBIT in 2024 represents a fundamental improvement in the company's solvency profile. Although interest expense data for the final two periods is unavailable, the shift to positive operating income suggests the company has moved toward a position where it can potentially service its debt from its own operations rather than relying on external capital.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Fixed Charge Coverage
GameStop Corp., fixed charge coverage 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) | |||||||
| Net income (loss) | 6,700) | (313,100) | (381,300) | (215,300) | (470,900) | (673,000) | |
| Less: Income (loss) from discontinued operations, net of tax | —) | —) | —) | (700) | (6,500) | 121,800) | |
| Add: Income tax expense | 6,400) | 11,000) | (14,100) | (55,300) | 37,600) | 41,700) | |
| Add: Interest expense | —) | —) | 26,900) | 34,000) | 38,500) | 56,800) | |
| Earnings before interest and tax (EBIT) | 13,100) | (302,100) | (368,500) | (235,900) | (388,300) | (696,300) | |
| Add: Operating lease cost | 284,000) | 278,300) | 296,300) | 311,500) | 342,600) | 357,600) | |
| Earnings before fixed charges and tax | 297,100) | (23,800) | (72,200) | 75,600) | (45,700) | (338,700) | |
| Interest expense | —) | —) | 26,900) | 34,000) | 38,500) | 56,800) | |
| Operating lease cost | 284,000) | 278,300) | 296,300) | 311,500) | 342,600) | 357,600) | |
| Fixed charges | 284,000) | 278,300) | 323,200) | 345,500) | 381,100) | 414,400) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 1.05 | -0.09 | -0.22 | 0.22 | -0.12 | -0.82 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Amazon.com Inc. | 5.77 | 3.73 | 0.47 | 5.24 | — | — | |
| Home Depot Inc. | 7.03 | 9.07 | 9.94 | 8.97 | — | — | |
| Lowe’s Cos. Inc. | 5.82 | 5.77 | 8.02 | 6.05 | — | — | |
| TJX Cos. Inc. | 3.85 | 3.31 | 3.17 | 1.04 | — | — | |
| Fixed Charge Coverage, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 5.78 | 4.61 | 2.82 | 5.29 | — | — | |
| Fixed Charge Coverage, Industry | |||||||
| Consumer Discretionary | 5.95 | 4.95 | 3.65 | 5.60 | — | — | |
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 2024 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 297,100 ÷ 284,000 = 1.05
2 Click competitor name to see calculations.
The analysis of solvency metrics reveals a period of significant volatility in earnings capacity, culminating in a recent transition toward positive fixed charge coverage. For the majority of the period between 2019 and 2023, the organization demonstrated an inability to cover its fixed obligations through operating earnings, though a substantial recovery is evident in the most recent fiscal year.
- Earnings Before Fixed Charges and Tax
- Earnings exhibited extreme fluctuations, starting with a substantial deficit of US$ 338.7 million in 2019. While a brief positive turn occurred in 2021, earnings reverted to negative territory in 2022 and 2023. This instability ended in 2024 with a significant increase to US$ 297.1 million, marking the highest earnings level within the analyzed timeframe.
- Fixed Charges Trend
- A consistent downward trend in fixed charges was observed from 2019 through 2023, decreasing from US$ 414.4 million to US$ 278.3 million. This steady reduction suggests a contraction of fixed obligations or a restructuring of liabilities. A slight increase occurred in 2024, with charges rising to US$ 284.0 million.
- Fixed Charge Coverage Ratio
- The coverage ratio remained below the critical threshold of 1.0 for five consecutive years, indicating that earnings were insufficient to meet fixed obligations. The ratio fluctuated between -0.82 and 0.22 during this period. However, the ratio reached 1.05 by February 3, 2024, signifying that the organization has finally achieved a level of earnings sufficient to cover its fixed charges.
Overall, the data indicates a shift from a state of insolvency regarding fixed charges to a position of marginal sufficiency. The improvement in the coverage ratio is driven primarily by the sharp increase in earnings before fixed charges and tax in 2024, complemented by the general reduction in fixed obligations achieved over the preceding years.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?