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Company: FTI Consulting (FCN)
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  No real economies of scale when you grow

FTI Consulting has not demonstrated the ability to truly realize economies of scale as it has grown. As evidence, Selling, General and Administrative (SGA) expenses as a percentage of total sales has been trending upwards over the last five years.

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  Lots of debt

For a human capital business, FTI Consulting maintains an extremely high debt/capitalization ratio (about 50%). This leverage is over five times greater than the industry average (about 9%).

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  Growth by acquisition model is inherently risky

Successful integration of acquired businesses is fundamental to FTI Consulting's growth strategy. FTI has experienced some trouble integrating new consultants, especially on the international level, which has led to significant variability in consultant utilization rates.

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