Korn Ferry (KFY)

The analysis of Korn Ferry's solvency ratios over the specified period reveals the following insights:

1. Debt-to-Assets Ratio: The data indicates a consistent value of zero across all years from April 30, 2021, through April 30, 2025. This suggests that the company completely lacks interest-bearing debt relative to its total assets, reflecting an absence of leverage and indicating a highly conservative financial structure in terms of debt usage.

2. Debt-to-Capital Ratio: Similarly, the debt-to-capital ratio remains at zero throughout the period, reinforcing the conclusion that Korn Ferry has not utilized or reported any capital comprising debt. This stability indicates the absence of long-term borrowings impacting the capital structure.

3. Debt-to-Equity Ratio: The ratio remains at zero across all years, indicating that the firm maintains an equity-only financing approach with no debt component relative to shareholders' equity. This further underscores the company's reliance solely on equity financing for its operations.

4. Financial Leverage Ratio: The financial leverage ratio shows a decreasing trend from 2.24 in April 2021 and 2022 to 2.17 in 2023, then gradually declining to 2.12 in 2024 and 2.07 in 2025. This ratio measures the extent to which the company's assets are financed via shareholders' equity, with higher values indicating greater leverage. The decline suggests a gradual reduction in leverage, which implies a shift toward more conservative use of debt or possibly an increase in equity relative to assets.

Summary: The comprehensive evaluation indicates that Korn Ferry exhibits a debt-free capital structure from 2021 onwards, with no reliance on debt for financing its assets. The consistently zero debt ratios highlight a conservative approach to leverage, while the decreasing financial leverage ratio suggests a gradual shift toward lower financial risk and conservatism over the period.

---

Coverage ratios

The interest coverage ratios for Korn Ferry over the specified periods demonstrate significant fluctuations, reflecting changes in its ability to meet interest obligations from its earnings before interest and taxes (EBIT).

As of April 30, 2021, the interest coverage ratio was 6.59. This indicates that Korn Ferry's EBIT was approximately 6.59 times the interest expense, suggesting a comfortable margin of safety in covering interest costs. The ratio increased markedly in the subsequent year to 18.12 as of April 30, 2022, signifying a substantial improvement in EBIT relative to interest expenses and indicating enhanced financial stability and risk mitigation concerning interest obligations.

In the following year, the ratio declined to 12.43 as of April 30, 2023. While still substantially above the typical threshold of 3, which often indicates sound coverage, this decrease signals a reduction in the firm's EBIT coverage capacity compared to the previous year, potentially due to increased interest expense or decreased earnings.

For the fiscal year ending April 30, 2024, the ratio further decreased to 11.62. Despite this again representing a decline from the previous year, the ratio remains robust, maintaining a strong buffer for interest payments. The trend suggests some variability in earnings that could warrant ongoing monitoring.

Looking ahead to April 30, 2025, the ratio is projected to increase to 15.69, signifying a notable rebound in the firm's ability to cover interest expenses. The forecasted improvement underscores expectations of enhanced earnings capacity or effective cost management strategies.

Overall, the interest coverage ratios indicate that Korn Ferry has maintained strong capacity to cover its interest obligations across these periods, with ratios consistently well above common risk thresholds. The periods of fluctuation, especially the dip observed in 2023 and 2024, highlight the importance of ongoing earnings stability. Nevertheless, the projections suggest a positive outlook in terms of interest coverage, with ratios returning to elevated levels by 2025.