$Korn Ferry (KFY.US)$It is a USA company listed in 1999, and...

The gross margin rate has been around 94% in the past 5 years, with a focus on observing changes in expenses. The return on net assets has declined from 11.5% to around 8.5%, and then surged to 22% by 2022.

In the past 5 years, there has not been much change in revenue in the first four years, but it surged by 45.3% in 2022. Operating profit also surged by 152% in 2022, while net income surged by 186%. In Q1 2023, revenue, operating profit, and net income increased by 19.6%, 10.2%, and 2.8% respectively. The profit growth rate has slowed down significantly, which was expected.

The income statement shows an overall increasing trend in interest expenses in recent years. In 2021, interest expenses accounted for 5.4% of operating profit, which is not a heavy burden. Among other expense items, there are large expenses related to restructuring and mergers and acquisitions every few years, which have a significant impact on net income.

The debt-to-asset ratio has increased from 47% to 55.3% in the past 5 years, and then decreased to 51% in Q1 2023.

The balance sheet shows that accounts receivable has increased rapidly recently, but the proportion is still reasonable.

Goodwill has reached 0.724 billion, accounting for 46% of net assets of 1.571 billion. Long-term borrowings are 0.4 billion, which currently does not seem to be a heavy burden. However, there is cash of 0.7 billion, so it does not seem very reasonable to maintain such a high amount of long-term loans.

In the past 5 years, cash flow from operating activities has consistently been significantly higher than investment cash flow, resulting in a large amount of shareholder surplus. From the cash flow statement, the net outflow of financing is mainly due to the payment of dividends and stock repurchases, and the repurchased stocks have been canceled. This should have a significant positive impact on earnings per share.

The current PE ratio is 7.85, and the trailing PE ratio is 7.75. If calculated based on the average net income of 0.16 billion in the past 5 years, the PE ratio would be 15.7. The current price does not have enough discount, so it can be continuously observed.