FTI Consulting, Inc. (FCN) Balance Sheet

The rise in leverage appears to reflect either acquisition funding or share repurchase financing, since equity has fallen from $2.3B to $1.3B alongside substantial buybacks. The partial easing in the latest quarter suggests management is managing the balance sheet back toward a moderate level, though the speed of the swing warrants monitoring for whether leverage is strategic or necessity-driven.

The gap between debt and cash is wide, which suggests the company depends on operating cash flow and revolver access to service obligations. Given the volatile quarterly operating cash flow reported in the cash flow analysis, refinancing timing and covenant headroom appear to be the key items investors should monitor. The data available does not disclose debt maturities or interest terms, so refinancing risk cannot be fully quantified.

A current ratio above 1.7 provides a reasonable buffer, but the combination of falling cash and rising debt suggests current assets are increasingly tied up in receivables rather than liquid balances. This raises questions about how quickly working capital converts to cash. The ratio appears sufficient for near-term obligations based on reported figures, though the buffer against a demand shock is narrower than a year ago.

Net PP&E of $340.6M to $372.0M is modest relative to total assets, consistent with a people-based consulting model. The heavy goodwill weighting implies that a sustained decline in segment performance could eventually require impairment testing, which would reduce equity without affecting cash. Investors should weigh tangible asset quality more heavily than headline asset totals.