Financial Ratio Analysis Of Gamestop Corp

The company I selected to analyze is GameStop. I understand that GameStop isn’t necessarily a small business but I have only ever seen a handful of them throughout my life, so to my knowledge, it could fit within the small business parameters. GameStop currently utilizes digital media in a multitude of ways, ranging from customer awareness to company statistical information regarding customer traffic. GameStop, like many other companies, utilizes digital media to advertise and persuade the minds of customers across the world into purchasing “fun, new” digital content that they are selling. This is most important for GameStop’s success as it is the most likely reason for increasing the company’s revenue as well as the customer base of consumers who both play video games and are looking to purchase a product for someone else.

The following report is a brief comparative analysis of two of Australia’s largest deposit-taking financial institutions (FI), Australia and New Zealand Banking Group Ltd. (ANZ) and Westpac Banking Corporation (Westpac). This report seeks to identify which of the FIs has a greater aggregate return per dollar of equity and thus establish the highest performer, or most profitable, of the two. The Return on Equity Model (ROE) (Koch & MacDonald,

Profitability ratios are measurements used by companies in order to measure a business ability to make earnings relative to sales assets and equity. These ratios assess the ability of a company to generate earnings, profits and cash flows relative to some metric, often the amount of money that a company has invested. They emphasize how effectively the profitability of a company is being handled.

In 2005 GameStop became the largest video game retailer according to the article ( 2012). GameStop as of 2005 had over 4000 brick and mortar stores. GameStop also produces media to educate their consumers.GameStop is a destination for customers who are looking for games or gaming accessories. The value that you would perceive Gamestop provides is a brick and mortar store that provides a one stop stop for customers

GameStop Corp. (GameStop) is a specialty retailer that offers the most popular of video game hardware and software, as well as new and pre-owned mobile and consumer electronics products. As well as retail stores, GameStop also owns Kongregate, a site for browser-based video games; and Game Informer, a video game magazine; Simply Mac, an Apple products reseller; and Spring Mobile, an AT&T wireless reseller. It also acts on Cricket Wireless, an AT&T brand pre-paid wireless retailer, branded retail stores as an authorized agent.

The operating profit margin shows how much a company makes per dollar of items sold. This margin needs to be compared over time and with other companies to determine if the company 's margin is increasing. For this ratio, a higher number is better. In Table 2, Apple shows a larger number both years, with an increase in 2006. Dell 's increase was only a tenth of a percentage point.

Within the video game industry today, GameStop will be a good long-term investment. The evolution of technology has been huge in the industry. Although technology has caught up to GameStop, they have had a few technology strategies to keep them at the top of the industry. However, in the midst of the technology challenges they went away from what made them unique to stay above their competitors In order for GameStop to be a great long term investment they need to uphold what their mission and vision statement says. In 2010, it was predicted that GameStop will end up filing bankruptcy like Blockbuster due to online streaming of the video and game. For a few years it was looking that way as GameStop was steadily declining. With a change in management,

Profitability ratios refer to the relative measure to what an actual created profit. Through these ratios the company is allowed to see how profitable the company. In addition it can serve as an examination of the overall performance of the company’s operations and how do these compare to past performances or other companies. The ratios in which accounting measures the profitability of a company are Profit Margin, Price over Earnings, Return on Equity and Return on

Profit Margin: -This ratio relates the operating profit to the sales value (Walker, 2009). It tells us the amount of net profit per pound of turnover a business has earned.

Over the years, Microsoft Corporation has been developing and supporting numerous software products for various computing devices worldwide. As stated by Liquori (2011), “[This] enables business innovation and helps builds the company’s competitive advantage” (n.d). Microsoft’s technical innovations and leadership in consumer and corporate markets has made it a formidable competitor in this information age (liquor, 2011). Throughout this paper, I will provide financial ratios analysis of Microsoft Corporation based on the available financial data for the last five years.

That’s a lot of different services that are offered to the world and many businesses. They are categorized as Specialty Retailers, “The general business activity and principal products or commercial enterprise of GameStop are categorized as being part of the Specialty Retailers Industry.” (Making A Fortune, n.d.). They specifically retail in video game hardware and software. They also deal within: video games, electronics of all sorts (cell phones, computers, tablets, multimedia devices). Tapping into all these different markets can only mean that GameStop must do well when it comes to making money and keeping their finances in order.

1. Profitability Ratios: it measure of the profit comparative to the resources available to generate the profit. Under this ratio we have four other ratios that are as follows:

The profitability ration in a financial analysis is the ability of the organization to generate a profit. This ratio looks at areas such as net income, revenue, gross profit, earnings before taxes and interest and operating profit to name a few. Profitability shows the bottom line numbers for a company and is the goal that most organizations strive for. Ratios examined were gross profit margin and net profit margins

GameStop has been around since 1984 and they have been evolving since then. They started out as a pure video game retailer, but now they are a family of specialty retailer brands. Currently, the company is operating more than 6900 stores in all over the world including Europe, Canada, Australia and the United States. Their product line basically consists of two major brands which are video game related brands and also technology brands. For the video game related brands, GameStop’s family include a lot of leading video game retailer such as EB Games who is well-known at the international level. From the annual report, it listed the net sales is increasing from last year by 2.8% which is an essential figure that suggests an encouraging growth in the business of this company. The increase in net sales is due to the increase in demand for new video game hardware and accessories. For the technology brands, GameStop is also a parent company for Simply Mac and Spring Mobile. These two retailers are known for their service in the mobile

— Return on Invested Capital (simple form) = Net Income – Dividends / Invested Capital