Cintas Corp. (NASDAQ:CTAS)

The financial data indicates a positive trajectory in several key performance metrics over the six-year period ending in May 2024.

Net Operating Profit After Taxes (NOPAT)

NOPAT demonstrates a general upward trend, increasing from approximately $1.01 billion in May 2019 to about $1.62 billion in May 2024. There was a slight decline observed in 2020 compared to 2019, where NOPAT decreased from $1.01 billion to roughly $973 million, which could suggest an impact from external challenges in that period. However, from 2021 onwards, there is consistent growth, with the most significant increases occurring between 2021 and 2022 as well as between 2023 and 2024, signaling strong operational improvements or favorable market conditions.

Invested Capital

Invested capital has remained relatively stable in the early years, slightly decreasing between 2019 and 2020, from approximately $6.50 billion to $6.49 billion. Following 2020, invested capital shows a gradual increase each year, reaching about $7.22 billion by May 2024. This steady rise suggests ongoing investment in the company's assets or infrastructure, supporting operational growth.

Return on Invested Capital (ROIC)

ROIC exhibits a noteworthy improvement throughout the period, starting at 15.49% in May 2019, then slightly declining to 15% in May 2020. Post-2020, ROIC improves substantially, reaching 16.72% in 2021, then jumping sharply to 20.61% in 2022. Further increases follow, with ROIC growing to 21.4% in 2023 and 22.5% in 2024. This trend indicates enhanced efficiency and profitability in the use of invested capital, particularly strong from 2021 forward.

Overall, the data portrays a company recovering from a minor downturn in 2020 with consistent growth in profitability and asset utilization in subsequent years. The incremental rise in invested capital, coupled with a stronger ROIC, reflects improved operational effectiveness and potentially strategic capital deployment that has resulted in increased returns over the latest periods analyzed.

Operating Profit Margin (OPM)

The operating profit margin exhibited an overall upward trajectory from 17.62% in 2019 to 21.66% in 2024. There was a slight dip between 2019 and 2020, followed by consistent improvement each subsequent year, reaching the highest margin in 2024, which indicates increasing operational efficiency and profitability over the period.

Turnover of Capital (TO)

The turnover of capital ratio showed a gradual increase from 1.06 in 2019 to 1.33 in 2024. Minor fluctuations were noted in the initial years, but the trend was clearly positive, reflecting enhanced asset utilization and more effective deployment of capital to generate revenue.

1 – Effective Cash Tax Rate (CTR)

The value representing one minus the effective cash tax rate started at 82.9% in 2019 and declined to 78.16% by 2024, implying that the effective cash tax rate itself increased over time. The most noticeable decrease occurred between 2022 and 2024, suggesting a growing tax burden or reduced tax benefits impacting net cash flow.

Return on Invested Capital (ROIC)

The return on invested capital increased steadily from 15.49% in 2019 to 22.5% in 2024. The most significant improvement was observed between 2020 and 2022, indicating a strengthening in the company’s efficiency and profitability in generating returns from its invested capital over the period analyzed.

Net Operating Profit Before Taxes (NOPBT)

The net operating profit before taxes showed a steady upward trend over the observed periods. Starting at approximately 1.21 billion US dollars in 2019, it experienced a slight decline in 2020 but rebounded significantly thereafter. By 2024, the NOPBT reached about 2.08 billion US dollars, reflecting substantial profit growth and an overall positive trajectory in operational profitability.

Revenue

Revenue demonstrated consistent growth across all years under review. From roughly 6.89 billion US dollars in 2019, revenue increased each year, reaching approximately 9.60 billion US dollars in 2024. This steady increase indicates successful business expansion and improved sales performance over time.

Operating Profit Margin (OPM)

The operating profit margin experienced some fluctuations but generally trended upward. Initially declining from 17.62% in 2019 to 16.82% in 2020, the margin then improved significantly, rising to 21.66% by 2024. This improvement signifies enhanced operational efficiency and effective cost management leading to higher profitability relative to revenue.

Summary of Trends

Overall, the data reflects positive financial momentum characterized by rising revenue and increasing net operating profits. The improvement in operating profit margin further underscores the company's ability to convert revenues into profits more efficiently over time. These trends collectively suggest strengthening operational performance and financial health across the reviewed periods.

Revenue

The revenue exhibited a consistent upward trend over the six-year period. Beginning at approximately $6.89 billion in May 2019, it increased annually, reaching nearly $9.60 billion by May 2024. This progression indicates steady growth, with the most notable acceleration observed in the last two years, where revenue grew by approximately 12.3% from 2022 to 2023 and by about 8.8% from 2023 to 2024.

Invested Capital

Invested capital demonstrated relative stability with modest growth throughout the timeframe. Starting at roughly $6.50 billion in May 2019, it experienced slight fluctuations in subsequent years but generally increased, culminating at approximately $7.22 billion in May 2024. The growth rate of invested capital was more gradual compared to revenue, suggesting controlled capital investments or effective asset management.

Turnover of Capital (TO)

The turnover of capital ratio displayed an overall improving trend, indicating enhanced efficiency in utilizing invested capital to generate revenue. From 1.06 in May 2019, the ratio remained relatively stable until May 2021, then increased significantly to 1.19 in May 2022. This upward momentum continued, reaching 1.33 by May 2024, which reflects an improving capacity to generate higher revenue per unit of invested capital.

Summary Insights

The data suggests that the company has been successful in growing its revenue substantially while maintaining a controlled and moderate increase in invested capital. The increasing turnover of capital ratio further supports the conclusion that asset utilization efficiency improved notably, especially in the last three years. This combination of strong revenue growth, moderate capital increases, and enhanced capital turnover points to effective operational management and potentially favorable market conditions influencing the company’s performance.

Cash Operating Taxes

Cash operating taxes exhibited a general upward trend over the six-year period. Beginning at $207,657 thousand in 2019, the amount consistently increased except for a slight decline between 2020 and 2022. The most notable rise occurred between 2022 and 2024, where cash operating taxes surged from $230,781 thousand to $453,900 thousand, nearly doubling in two years.

Net Operating Profit Before Taxes (NOPBT)

Net operating profit before taxes demonstrated a continuous and robust increase throughout the timeframe. Starting at $1,214,564 thousand in 2019, NOPBT showed moderate growth in the early years and then accelerated significantly after 2021. By 2024, it reached $2,078,322 thousand, representing a substantial increase of approximately 71% over six years, indicating improving operational profitability.

Effective Cash Tax Rate (CTR)

The effective cash tax rate fluctuated within a range of approximately 14.5% to 21.84% across the years. It started at 17.1% in 2019, then slightly increased to 18.3% in 2020 before decreasing to 14.5% in 2022, indicating a beneficial tax position or tax planning strategies during that period. Subsequently, the tax rate rose sharply post-2022, reaching a peak of 21.84% in 2024, which could reflect changes in tax regulations, profitability timing differences, or other tax-related considerations.

Overall Insight

The data suggest that the company’s operational profitability improved substantially, with net operating profits growing steadily. Despite this growth, cash operating taxes rose even more sharply in recent years, particularly after 2022, partially driven by an increased effective cash tax rate. These patterns imply that tax expenses are becoming a more significant component relative to operating profit, which may warrant further analysis into tax strategies and obligations.