CLC_GroupBFIN504.docx(1) Fin-504 CLC – Case Study Component 3: GameStop Reboot Plan Grand Canyon University Finance 504 Case Study Component 3: GameStop Reboot Plan
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CLC_GroupBFIN504.docx(1) Fin-504 CLC – Case Study Component 3: GameStop Reboot Plan Grand Canyon University Finance 504 Case Study Component 3: GameStop Reboot Plan The future of GameStop as a company seems to be improving, post 3rd Quarter Financial reports dropping. At the end of the 3rd Quarter, GameStop ended with $602.6 million dollars in cash and restricted cash, dramatically freeing up liquidity to take care of outstanding debts. This was done primarily by store closures coupled with a 33% decrease of inventory to respond to the falling demand of their product. This liquidity is more than enough to cover their existing $269.5M of short-term debts and $216M in long term debts accounted for on their balance sheet. However, GameStop is currently looking into options of revamping its business practice and trying to reinvent itself as a company. Dramatic changes such as this require the ability to remain cash rich to bankroll reinvestment into existing infrastructure and business practice. GameStop will also require additional funding to advertise these new changes to the general public. Future Financial Needs With sales decreasing as businesses close, GameStop cannot rely solely on its own ability to generate cash for these expansions. To cover this shortfall, GameStop will require external financing to cover these costs (GameStop, 2020). GameStop has already planned ahead for ways to finance these new initiatives. They have been able . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. .. . . . . . . . . . . . . . . . . . .. . . . .
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