Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Cintas Corp., consolidated cash flow statement

US$ in thousands

12 months ended:	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Net income	1,571,592)	1,348,010)	1,235,757)	1,110,968)	876,037)	884,981)
Depreciation	280,866)	257,041)	249,376)	243,836)	235,905)	223,631)
Amortization of intangible assets and capitalized contract costs	161,518)	152,121)	150,325)	144,115)	143,148)	136,462)
Stock-based compensation	116,986)	103,621)	109,308)	112,035)	115,435)	139,210)
Gain on equity method investment transaction	—)	—)	(30,151)	—)	—)	—)
Net gain on sale of operating assets	—)	—)	(12,129)	(22,030)	—)	(3,200)
Long-lived asset impairment	—)	—)	—)	5,114)	9,220)	—)
Gain on sale of a cost method investment	—)	—)	—)	—)	—)	(69,373)
Deferred income taxes	(28,912)	23,233)	52,110)	(42,242)	(16,252)	31,708)
Accounts receivable, net	(91,399)	(151,771)	(100,392)	(32,576)	39,681)	(94,918)
Inventories, net	95,766)	(35,658)	16,194)	(75,501)	(74,773)	(60,039)
Uniforms and other rental items in service	(22,815)	(98,252)	(111,332)	(35,659)	12,773)	(90,228)
Prepaid expenses and other current assets and capitalized contract costs	(117,674)	(132,173)	(28,581)	(102,600)	(110,248)	(100,765)
Accounts payable	36,896)	53,369)	22,697)	(2,604)	2,629)	12,276)
Accrued compensation and related liabilities	(27,013)	2,711)	(3,625)	113,769)	(26,476)	15,321)
Accrued liabilities and other	97,750)	41,314)	(9,241)	(6,735)	49,906)	30,910)
Income taxes, current	6,220)	34,248)	(2,691)	(49,150)	34,498)	11,886)
Change in current assets and liabilities, net of acquisitions of businesses	(22,269)	(286,212)	(216,971)	(191,056)	(72,010)	(275,557)
Adjustments to reconcile net income to net cash provided by operating activities	508,189)	249,804)	301,868)	249,772)	415,446)	182,881)
Net cash provided by operating activities	2,079,781)	1,597,814)	1,537,625)	1,360,740)	1,291,483)	1,067,862)
Capital expenditures	(409,469)	(331,109)	(240,672)	(143,470)	(230,289)	(276,719)
Purchases of investments	(7,546)	(4,566)	(6,076)	(4,299)	(10,031)	(17,841)
Proceeds from sale of operating assets, net of cash disposed	—)	—)	15,347)	31,705)	13,300)	3,200)
Proceeds from sale of a cost method investment	—)	—)	—)	—)	—)	73,342)
Acquisitions of businesses, net of cash acquired	(186,837)	(46,357)	(164,228)	(10,038)	(53,720)	(9,813)
Other, net	(4,779)	(6,640)	(7,006)	(11,113)	(4,658)	(7,807)
Net cash used in investing activities	(608,631)	(388,672)	(402,635)	(137,215)	(285,398)	(235,638)
Issuance (payments) of commercial paper, net	—)	(261,200)	261,200)	—)	(112,500)	112,500)
Proceeds from issuance of debt	—)	—)	1,190,506)	—)	—)	200,000)
Repayment of debt	(13,450)	(50,000)	(1,200,000)	—)	(200,000)	—)
Proceeds from exercise of stock-based compensation awards	1,370)	3,021)	117,737)	129,957)	90,519)	65,371)
Dividends paid	(530,909)	(449,917)	(375,119)	(451,327)	(267,956)	(220,764)
Repurchase of common stock	(700,033)	(398,865)	(1,525,873)	(554,121)	(464,518)	(1,016,300)
Other, net	(10,468)	(15,875)	(6,394)	(4,377)	(752)	(14,112)
Net cash used in financing activities	(1,253,490)	(1,172,836)	(1,537,943)	(879,868)	(955,207)	(873,305)
Effect of exchange rate changes on cash and cash equivalents	206)	(2,628)	(216)	4,581)	(2,121)	(998)
Net increase (decrease) in cash and cash equivalents	217,866)	33,678)	(403,169)	348,238)	48,757)	(42,079)
Cash and cash equivalents at beginning of year	124,149)	90,471)	493,640)	145,402)	96,645)	138,724)
Cash and cash equivalents at end of year	342,015)	124,149)	90,471)	493,640)	145,402)	96,645)

Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).

The financial performance demonstrates a general upward trend in net income over the six-year period, increasing from approximately $885 million in 2019 to about $1.57 billion in 2024. This suggests improving profitability. Depreciation and amortization expenses have also progressively increased, indicating rising investments in fixed and intangible assets over time. In contrast, stock-based compensation showed a mild declining trend until 2023 before a slight increase in 2024.

There are sporadic gains and losses from non-operating activities, such as gains on sales of assets and investments, which appear irregular and without a clear pattern. Long-lived asset impairments were noted in 2020 and 2021 but absent in other years. Deferred income taxes fluctuated significantly between positive and negative values, reflecting varying tax circumstances and adjustments.

Working capital components experienced volatility. Accounts receivable showed negative changes in most recent years, implying an increase in receivables. Inventories likewise fluctuated, alternating between decreases and increases. Uniforms and rental items in service mostly contributed negatively, except for a positive change in 2020. Prepaid expenses and other assets generally declined, particularly in 2022 and 2023. Accounts payable and accrued liabilities demonstrated inconsistent changes, sometimes positive and at other times negative, indicating variable timing in payments and accruals.

The net cash provided by operating activities has consistently grown from around $1.07 billion in 2019 to nearly $2.08 billion in 2024, reflecting strong operational cash flow generation. Capital expenditures increased steadily, peaking at about $410 million in 2024, indicating maintainance or expansion activity. Investing activities generally resulted in net cash outflows, intensified notably in 2022 and 2024, partially due to acquisitions and capital spending.

Financing activities saw significant fluctuations. The issuance and repayment of debt were substantial yet variable, with notable debt proceeds in 2022 followed by repayments in subsequent years. Dividends increased each year, reflecting a rising return to shareholders. Share repurchases were significant across all years, though they declined in scale after 2022. The net cash used in financing was consistently negative, indicating more cash outflows than inflows in this segment.

Cash and cash equivalents experienced variability, dropping sharply in 2022 but increasing again in 2023 and 2024. Despite fluctuations, the ending cash balance in 2024 increased notably compared to 2019, suggesting an overall positive liquidity position.

Profitability: Steady increase in net income exemplifying solid earnings growth.
Depreciation and Amortization: Gradual increase indicative of growing asset base or capital investment.
Stock-based Compensation: Moderate decline followed by slight recovery, possibly due to compensation strategy adjustments.
Working Capital: Fluctuating changes in receivables, inventories, and payables suggesting variable operational cycles.
Operating Cash Flow: Consistent upward trend highlighting strong cash generation capabilities.
Investing Activities: Net outflows enlarging with rising capital expenditure and acquisitions.
Financing Activities: Substantial repayments and distributions with ongoing share repurchases indicate active capital management.
Liquidity: Cash position generally improving despite periodic declines.

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Cintas Corp. (NASDAQ:CTAS)

Cash Flow Statement