Financial Ratio Analysis Of Gamestop Corp - 1129 Words

Financial Ratio Analysis of GameStop Corp By Tonia Stanton FINC 440 6380 Security Analysis and Valuation Professor William Marcoux January 16, 2015 Financial Ratio Analysis of GameStop Corp Introduction GameStop Corp, is a global video game and consumer electronics retailer with emphasis on video gaming lifestyle. Number one in the industry, GameStop stores sell new and used consumer electronics, which includes videogame and consoles, computer software, Apple product, cellular merchandise and accept trade-ins of the same. The Company is divided into four Video Game Brands segments (United States, Canada, Australia and Europe) and a Technology Brand segment that publicly report financial results. The video game segment include†¦show more content†¦GameStop Liquidity Ratios (in millions) 2010 2011 2012 2013 2014 Current Ratio 1.28 1.23 1.22 1.17 1.13 Quick Ratio .59 .44 .44 .41 .36 WC to Sale Ratio 0.052 0.043 0.038 0.033 0.024 GameStop’s liquidity ratios have been decreasing for the past five years. The ratios are low which indicates their inability to meet short term obligations. They may have inventory management issues, uncollected receivable or spending too much cash. Profitability ratio Profitability ratios analyze part of income with sales. It tell us how a company generates income vs. sales. Profitability is simply the capacity to make a profit, and a profit is what is left over from income earned after you have deducted all costs and expenses related to earning the income. Can GameStop make a profit? Gross profit margin, operating profit margin and net profit margin are some commonly used ratios. GameStop’s Profit Ratio with Industry Average 2010 2011 2012 2013 2014 Industry average Gross profit margin 26.89% %26.79$ 28.06% 29.84% 29.44% 35.20% Operating profit margin 7.02% 6.99% 5.94% -0.47% 6.34% 10.36% Net profit margin 4.15% 4.31% 3.56% -3.03% 3.91% 6.05% 2013 was a bad year for GameStop with a negative operating cost and net profit. Over a five year period, their gross profit margin has increased. Which indicate how well GameStop is performing at generating profits or revenues relative to a certain metric. TheShow MoreRelatedFinancial Management : Key Performance Metrics10327 Words   |  42 PagesSection 1 Financial management encompasses a broad array of different methodologies, key performance metrics, and news and events, amongst many other segments. From the smallest of public companies, to global giants, data is continuously compiled and analyzed to gauge performance and predict future trend. Of course, these studies can never be completely accurate, as market performance is unpredictable and sometimes quite volatile. It’s because of the unknown that the constant fluctuation of individualRead MoreBest Buy Case Analysis4374 Words   |  18 Pagesmaximize revenues. Best Buy as a whole feels that success is not only dependent on our growth and profitability, but also the well being of our employees and the satisfaction of our customers. The latest motto however is Buyer be happy.II. SWOT Analysis (minimum 3 each)A. Strengths1.Largest electronic specialty retailer in the USBest Buys strength is that they are a very large, well known company. They have always been on the forefront of carrying the newest and most technologically advanced productsRead MoreBest Buy Case Study3836 Words   |  16 PagesCulture 9 3. Corporate Resources 9 3.1. Marketing 9 3.2. Finance 9 3.3. RD 10 3.4. Operations 10 3.5. Human Resources 10 3.6. Information Systems 10 VI. Analysis of Strategic Factors 10 1. Situational Analysis (SWOT) (SFAS Matrix; see Exhibit 3) 11 1.1. Situational Analysis 11 1.1.1. Summary of Internal Factors 11 1.1.2. Summary of External Factors 11 1.1.3. Review of Mission and Objectives 11 VII. Strategic Alternatives and Recommended Strategy