GameStop Corp. (NYSE:GME)

The financial data reveals distinct trends within the asset turnover and equity turnover ratios over the periods analyzed. These trends provide insights into the company's operational efficiency and asset utilization.

Net fixed asset turnover

The net fixed asset turnover ratio shows an overall increasing trend from 25.79 in fiscal 2019 to 55.56 in fiscal 2024. This suggests a growing efficiency in generating sales from fixed assets, with a particularly notable acceleration from fiscal 2021 onwards, indicating improved utilization or productivity of fixed assets over time.

Net fixed asset turnover (including operating lease, right-of-use asset)

When including operating leases and right-of-use assets, the net fixed asset turnover follows a different pattern. It declines sharply from 25.79 in 2019 to around 6.2 in 2020 and remains relatively stable but low (between 5.9 and 8.5) through 2024. This suggests that the inclusion of lease-related assets significantly alters the turnover calculation, pointing to either increased asset base due to lease accounting or less effective utilization of these leased assets compared to owned fixed assets.

Total asset turnover

The total asset turnover ratio exhibits some fluctuation across the years. It increased slightly from 2.05 in 2019 to 2.29 in 2020, but then declined to 1.72 in 2022 before recovering somewhat to 1.95 in 2024. This pattern indicates variability in the ability to generate sales from the overall asset base, reflecting possible changes in asset management efficiency or shifts in business strategy impacting asset utilization.

Equity turnover

The equity turnover ratio shows high volatility. It rose significantly from 6.2 in 2019 to a peak of 11.66 in 2021, followed by a steep decline to 3.94 in 2024. The sharp rise and subsequent fall suggest significant changes in equity levels or sales generation relative to equity, potentially influenced by capital structure changes or profitability fluctuations.

Overall, the company appears to have improved its use of fixed assets (excluding leases) to generate revenue, while total asset and equity turnover ratios indicate some instability in asset and equity utilization efficiency over the years. The discrepancy between net fixed asset turnover with and without lease assets suggests the increasing impact of lease accounting on asset measurements and the corresponding influence on operational metrics.

The financial data reveals several important trends over the reporting periods. Net sales have exhibited a consistent decline from February 2, 2019, through February 3, 2024. The highest net sales were recorded in February 2019 at approximately $8.29 billion, which decreased significantly to about $5.27 billion by February 2024. This represents a substantial reduction in revenue over the six-year span, indicating potential challenges in maintaining sales volume or pricing power.

Concurrently, the net book value of property and equipment, after accounting for accumulated depreciation, shows a steady downward trajectory. Starting at $321.3 million in February 2019, this asset value declined systematically each year, reaching $94.9 million by February 2024. This reduction suggests either substantial asset disposals, accelerating depreciation, or lack of reinvestment in fixed assets.

In contrast to the absolute values of assets and sales, the net fixed asset turnover ratio has demonstrated a strong upward trend. From an initial figure of 25.79 in February 2019, the ratio increased to 55.56 by February 2024. This indicates that the company is generating more sales per unit of net fixed assets over time. The rising turnover ratio could be interpreted as improved efficiency in asset utilization, possibly due to a leaner asset base or enhanced operational performance.

Net sales

Show a continuous decline from $8.29 billion in 2019 to $5.27 billion in 2024, indicating a weakening revenue generation capacity over the years.

Property and equipment, net

Exhibit a steady decrease from $321.3 million in 2019 to $94.9 million in 2024, reflecting depreciation, asset disposals, or reduced capital expenditures.

Net fixed asset turnover

Increase markedly from 25.79 in 2019 to 55.56 in 2024, suggesting enhanced efficiency in using the asset base to generate sales despite declining absolute sales figures and asset values.

Overall, the data suggests the company faces a contracting revenue base and shrinking fixed assets but appears to adapt by improving asset utilization efficiency. This might imply strategic adjustments aimed at reducing fixed asset holdings while leveraging operational efficiencies to sustain sales volume relative to assets.

Net Sales

Net sales demonstrate a declining trend over the observed period. Starting from approximately $8.29 billion in early 2019, there is a noticeable decrease to around $6.47 billion by early 2020. The downward trend continues through 2021, where net sales reach approximately $5.09 billion. A minor recovery occurs in 2022 with sales increasing to about $6.01 billion, followed by a slight decline again in 2023 and continuing into early 2024, where sales reach $5.27 billion. Overall, net sales exhibit a significant reduction, nearly halving over five years, indicating challenges in revenue generation.

Property and Equipment, Net of Accumulated Depreciation (Including Operating Lease, Right-of-Use Asset)

The net value of property and equipment displays fluctuations with an initial significant increase. From approximately $321 million in early 2019, the value more than triples to about $1.04 billion by early 2020. However, after this peak, there is a consistent decline in subsequent years, falling to around $863 million in 2021, then further decreasing annually to $651 million by early 2024. This pattern reflects a possible restructuring or divestiture of fixed assets after 2020 or significant depreciation impacts.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

The net fixed asset turnover ratio, which measures the efficiency in using fixed assets to generate sales, shows a sharp drop from 25.79 in early 2019 to 6.2 in early 2020. It remains relatively stable with minor fluctuations thereafter, ranging between 5.9 and 8.5 from 2021 to 2024. This indicates a substantial decline in asset utilization efficiency starting in 2020, with moderate improvement but still much lower than the initial level in 2019. The ratio suggests that the company's sales volume has decreased faster than adjustments in fixed asset levels.

Net Sales

Net sales exhibited a significant declining trend over the period analyzed. Starting at approximately 8.29 billion USD in early 2019, sales decreased sharply to about 6.47 billion USD in 2020, followed by continued declines through 2021 and 2022. Although slight recovery trends appeared between 2022 and early 2023, net sales dropped again in early 2024 to around 5.27 billion USD, indicating persistent challenges in revenue generation.

Total Assets

Total assets decreased markedly from 4.04 billion USD in early 2019 to 2.82 billion USD in 2020. This downward trend continued with fluctuations, increasing notably in 2022 to nearly 3.5 billion USD before falling again to around 2.71 billion USD in early 2024. The overall trend suggests a contraction in asset base over the six-year period, with inconsistent recovery periods.

Total Asset Turnover

The total asset turnover ratio demonstrated variability but remained generally under pressure. Beginning at a ratio of 2.05 in early 2019, it increased to 2.29 in 2020, reflecting improved efficiency in asset utilization that year. However, this ratio declined to 1.72 by early 2022, signaling reduced efficiency. A gradual recovery was observed in subsequent years, with the ratio reaching 1.95 by early 2024, though it did not return to initial levels. This pattern indicates fluctuating, yet overall reduced effectiveness in generating sales from assets.

Net Sales

Net sales displayed a declining trend overall from 2019 to 2024. Starting at 8,285,300 thousand US dollars in 2019, the sales dropped sharply to 6,466,000 thousand US dollars in 2020 and continued decreasing to a low of 5,089,800 thousand US dollars in 2021. Although there was a modest rebound in 2022 to 6,010,700 thousand US dollars, the sales declined again in 2023 and 2024 to 5,927,200 and 5,272,800 thousand US dollars, respectively. The general pattern suggests a weakening top line over the six-year period with only a small recovery in 2022.

Stockholders’ Equity

Stockholders’ equity experienced considerable fluctuations throughout the period. Starting at 1,336,200 thousand US dollars in 2019, it nearly halved to 611,500 thousand US dollars in 2020 and further decreased to 436,700 thousand US dollars in 2021. However, there was a notable increase in 2022 to 1,602,500 thousand US dollars, followed by a slight decline to 1,322,300 thousand US dollars in 2023 and a marginal rise again in 2024 to 1,338,600 thousand US dollars. The equity levels reflect significant volatility, with a trough in 2021 and recovery thereafter.

Equity Turnover Ratio

The equity turnover ratio, which measures how efficiently the equity is utilized to generate sales, showed marked variability. It increased significantly from 6.2 in 2019 to 10.57 in 2020 and peaked at 11.66 in 2021, indicating improved sales generation relative to equity despite declining sales figures. However, it then dropped sharply to 3.75 in 2022 and slightly recovered to 4.48 in 2023 and 3.94 in 2024. This decline coincides with the period when equity increased substantially, suggesting that the increase in equity was not matched by proportional sales growth, leading to decreased turnover efficiency.