Income statement Critique Essay

The Gamester trade-in model Is relatively seamless and allows the company to maintain a negative working capital balance that outpaces any big-box specialty retailer” (Morrison, 2014). As I worked throughout this assignment I referenced three financial reports in order to gain a better understanding of Game Stop Corporation’s financial position: 2012 Game Stop Annual Review, Hoofs Game Stop Income Statement, and Y Charts GEM Statement of Cash Flows. I have two sons and they are avid gamer and Game Stop Rewards hat receives an abundance of dollars of my income each year.
Game Stop Competitive Position In terms of competitiveness is that Game Stop Corporation holds a superior advantage against most of their competition in the electronic software retail market. By taking a look at the attached spreadsheet we can come to this conclusion by looking at the volume of sales and net income of the company. Game Stop generates more than four times the amount of income and revenue than that of Play n’ Trade, their closest competitor. Game Stop first went public in August of 2001 , after recording over 200 million dollars in sales the previous year.
Prior to producing an initial public offering Barnes and Nobles Inc. Agreed to purchase 66. 3 percent of all Game Stop Corp.. (GEM) class B stocks; which represents over 92 percent of the voting shares of all GEM common stock. This move made Game Stop and all subsidiary stores (Baggage’s and Software Etc. ) a wholly owned subsidiary of Barnes and Nobles Inc. (Game Stop, 2013). In respects to free cash flow Game Stop spent $680,000 more than it brought in during fiscal year 2011. Although the company is in the red in this department, the active number does not necessarily denote poor operations on the part of the company.

Sometimes a company needs to spend to expand its business, and we are all familiar with the term “It takes money to make money’. This is most likely the case with Game Stop as the organization has expanded its footprint to include operations in Canada, China, Japan, and more than 100 European locations. Taking this into account I would consider the organization to be in a good relative cash position, as they seem to efficiently use their cash and assets in order to expand their operations n hopes of reaching new markets to generate more revenue (Game Stop, 2013).

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