Korn Ferry (KFY)
Interest coverage
| 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 |
| Interest expense (ttm) | US$ in thousands | 19,718 | 19,203 | 20,173 | 20,968 | 22,058 | 22,490 | 22,992 | 25,864 | 26,561 | 28,212 | 27,479 | 25,293 | 26,412 | 26,681 | 27,810 | 29,278 | 28,684 | 28,305 | 25,021 | 22,184 |
| Interest coverage | 18.34 | 16.94 | 15.64 | 13.39 | 11.93 | 12.14 | 13.08 | 13.81 | 15.39 | 16.54 | 16.92 | 18.12 | 16.30 | 14.68 | 11.93 | 6.61 | 3.76 | 2.83 | 3.65 | 8.23 |
January 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $361,617K ÷ $19,718K
= 18.34
The interest coverage ratio for Korn Ferry demonstrates notable fluctuations over the period from April 2020 to January 2025. In April 2020, the ratio stood at 8.23, indicating that the company's earnings before interest and taxes (EBIT) were more than sufficient to cover interest expenses by a comfortable margin. During the subsequent months, there was a significant decline, reaching a low of 2.83 in October 2020, suggesting a period of financial stress where earnings were only marginally sufficient to cover interest obligations.
Following this trough, the ratio experienced a steady and robust recovery, reaching a peak of approximately 18.34 by January 2025. This upward trend reflects an improving ability to service debt, with earnings increasingly surpassing interest expenses. Notably, between April 2021 and October 2021, the ratio escalated sharply from 6.61 to 14.68, indicating a rapid strengthening of earnings. The ratio remained relatively high and stable afterward, generally hovering between 12 and 16, which suggests a consistent capacity to meet interest commitments without undue strain.
The data indicates that Korn Ferry managed a significant deterioration in its interest coverage early in the period but subsequently restored and enhanced its financial flexibility over time. The overall trend points to improving profitability and possibly prudent debt management, resulting in a solid buffer to interest expenses as of late 2024 and early 2025.
Peer comparison
Jan 31, 2025