Korn Ferry (KFY)

The financial data indicates that Korn Ferry’s solvency ratios have consistently reflected a very conservative debt profile throughout the observed period. Key metrics such as the Debt-to-Assets Ratio, Debt-to-Capital Ratio, and Debt-to-Equity Ratio are all reported as zero at each reporting date from July 2020 through April 2025. This uniform absence of debt suggests that the company has maintained an entirely equity-financed capital structure, with no reliance on borrowed funds.

The absence of leverage in these ratios points toward a low or non-existent debt level, implying minimal financial risk associated with debt obligations. This conservative capital structure likely contributes to increased financial stability and reduced insolvency risk because the company is not exposed to interest rate fluctuations or debt repayment pressures.

Complementing these observations, the Financial Leverage Ratio, consistently ranging between approximately 1.96 and 2.24 over the period, indicates a modest use of leverage, primarily driven by the equity base rather than debt. Since the ratio is above 1, it suggests that assets are financed more by equity than liabilities, but the ratios do not indicate any significant debt.

In synthesis, Korn Ferry's solvency profile is characterized by an absence of leverage, evidenced by zero debt ratios across multiple periods. Accordingly, the firm demonstrates a very low financial risk exposure with a capitalization structure entirely composed of equity, supporting a stable financial position with limited insolvency threat.

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Coverage ratios

The analysis of Korn Ferry's interest coverage ratios over the specified periods reveals notable fluctuations indicative of the company's evolving capacity to meet its interest obligations from its earnings.

From July 31, 2020, to October 31, 2020, the interest coverage declined from 3.13 to 2.27, signaling a temporary decrease in earnings relative to interest expenses. Subsequently, a significant improvement occurred, with ratios rising to 3.76 by January 31, 2021, and a marked upward trajectory continuing through April 30, 2021 (6.61). This upward trend persisted, peaking notably at 14.68 on October 31, 2021, and reaching a high of 18.12 on April 30, 2022, indicative of a period of robust earnings relative to interest expenses.

After April 2022, the interest coverage ratio experienced a gradual decline, with the ratio at 16.92 on July 31, 2022, and marginal decreases through October 31, 2022 (16.54). The ratio continued to soften through 2023, reaching 14.05 by January 31, 2023, and dipping further to 12.43 by April 30, 2023. Nonetheless, it maintained a relatively strong position above 10, with the October 31, 2023 ratio reported at 10.56.

From late 2023 onward, the ratio exhibits a recovery trend. It rose to 11.93 on January 31, 2024, and further increased to 13.39 by April 30, 2024. The pattern continues with ratios reaching 15.64 on July 31, 2024, and 16.94 on October 31, 2024. The forecasted ratios for early 2025 suggest continued strength, with the interest coverage rising to 18.34 by January 31, 2025, and maintaining at 17.37 by April 30, 2025.

Overall, the data indicate that Korn Ferry experienced periods of significant earnings stability and strength, particularly from late 2020 through mid-2022, with interest coverage ratios well above 10, suggestive of a comfortable buffer over interest obligations. Although there was a decline through 2023, the ratio remained robust. Recent and projected figures suggest a strengthening trend once again, reflecting improved earnings capacity to cover interest expenses. This pattern underscores a generally healthy financial position in terms of debt servicing capacity, albeit with some volatility aligned with broader operational or market conditions.