Korn Ferry (KFY)
Return on total capital
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 361,617 | 325,255 | 315,484 | 280,702 | 263,120 | 273,141 | 300,644 | 357,245 | 408,864 | 466,623 | 464,866 | 458,194 | 430,629 | 391,706 | 331,853 | 193,518 | 107,780 | 80,086 | 91,239 | 182,508 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,792,740 | 1,777,740 | 1,753,840 | 1,733,060 | 1,703,620 | 1,656,150 | 1,348,060 | 1,648,070 | 1,608,980 | 1,578,050 | 1,564,750 | 1,544,350 | 1,531,280 | 1,479,520 | 1,417,190 | 1,366,390 | 1,293,190 | 1,219,970 | 1,215,660 | 1,221,380 |
| Return on total capital | 20.17% | 18.30% | 17.99% | 16.20% | 15.44% | 16.49% | 22.30% | 21.68% | 25.41% | 29.57% | 29.71% | 29.67% | 28.12% | 26.48% | 23.42% | 14.16% | 8.33% | 6.56% | 7.51% | 14.94% |
January 31, 2025 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $361,617K ÷ ($—K + $1,792,740K)
= 20.17%
The analysis of Korn Ferry's return on total capital (ROTC) over the period from April 2020 to October 2024 reveals notable fluctuations and general trends indicative of the company's operational performance and capital efficiency.
Initially, as of April 30, 2020, the ROTC was recorded at 14.94%. This figure experienced a significant decline by July 2020, dropping to 7.51%, likely reflecting the impact of the economic disruptions caused by the COVID-19 pandemic. The subsequent months showed further reductions, reaching a low of 6.56% by October 2020, which may indicate ongoing challenges or adjustments in the company's financial operations.
Starting from early 2021, a reversal of this downward trend became evident. The ROTC surged to 8.33% in January 2021 and then experienced a marked increase, reaching 14.16% by April 2021. This upward momentum continued through 2021 and into 2022, characterized by substantial growth. Notably, the ROTC hit 23.42% by July 2021 and further advanced to 26.48% in October 2021. The upward trajectory persisted into 2022, with the ROTC approaching approximately 29.7% in April and maintaining a high level through mid-2022, peaking around 29.71% in July 2022.
Throughout 2022, the ratio remained relatively stable around the high twenties, signifying efficient use of capital and strong operational performance. However, a slight decline commenced toward the end of 2022 and into early 2023, with the ROTC decreasing to 25.41% in January 2023, followed by a further decline to 21.68% in April 2023 and to 16.49% in October 2023. These decreases may be reflective of market or strategic changes, increased investment, or shifts in operational efficiency.
From late 2023 onward, the ratio began a modest recovery, with values of 15.44% in January 2024 and 16.20% in April 2024. The upward trend persisted through mid-2024, reaching 17.99% in July 2024 and 18.30% in October 2024. Notably, by January 2025, the ROTC further increased to 20.17%, suggesting a positive correction in the company's capacity to generate returns relative to its total capital base.
In summary, Korn Ferry experienced a significant decline in return on total capital during the early months of the COVID-19 pandemic, followed by a strong recovery period that peaked in mid-2022. The subsequent decline into late 2022 and into 2023 indicates possible strategic adjustments or transitional phases, but this was gradually offset by a recovery beginning in late 2023 and extending into 2024 and early 2025, demonstrating resilience and potential improvement in operational efficiency.
Peer comparison
Jan 31, 2025