Cintas Corp. (NASDAQ:CTAS)

Asset Turnover

The reported total asset turnover shows a slight decline from 0.93 in 2019 to 0.86 in 2021, followed by a steady increase reaching 1.05 in 2024. The adjusted total asset turnover mirrors this trend, decreasing initially and then improving, ending slightly lower at 1.04 in 2024 compared to the reported figure.

Current Ratio

The reported current ratio exhibits variability, rising significantly from 1.98 in 2019 to a peak of 2.61 in 2020, before dropping sharply to 1.47 in 2021. It recovers thereafter, reaching 2.39 in 2023 but declines again to 1.74 in 2024. The adjusted current ratio follows the same pattern with marginally higher values.

Debt to Equity

There is a clear downward trend in the debt to equity ratio, decreasing from 0.95 in 2019 to 0.57 in 2024. The adjusted ratio, consistently slightly lower, confirms the reduction in leverage over the period, indicating a gradual deleveraging strategy.

Debt to Capital

The debt to capital ratio also declines steadily from 0.49 in 2019 to 0.36 in 2024 for both reported and adjusted figures. This suggests an improved capital structure with less reliance on debt financing.

Financial Leverage

Reported financial leverage falls from 2.48 in 2019 to 2.12 in 2024, showing a reduction in the use of debt relative to equity. The adjusted figures show a similar decline, indicating a consistent decrease in financial risk.

Net Profit Margin

Net profit margin shows improvement over the years, increasing from 12.84% in 2019 to 16.38% in 2024. The adjusted net profit margin follows a comparable trajectory with a notable dip in 2020, but substantial growth thereafter, reflecting enhanced profitability.

Return on Equity (ROE)

Reported ROE fluctuates, starting at 29.47% in 2019, dipping to 27.08% in 2020, peaking at 37.35% in 2022, and settling at 36.41% in 2024. Adjusted ROE is slightly more conservative but shows the same overall trend, indicating strong returns on shareholder investments with some volatility.

Return on Assets (ROA)

ROA increases steadily from 11.9% in 2019 to 17.14% in 2024 on a reported basis, with adjusted ROA values tracking similarly but slightly lower. This improvement signals better efficiency in generating profits from the company's assets.

Revenue Trend

Revenue demonstrated a consistent upward trajectory from May 31, 2019, through May 31, 2024. Starting at approximately 6.89 billion US dollars in 2019, revenue increased each year to reach nearly 9.60 billion US dollars by 2024. The growth was steady with a notable acceleration between 2021 and 2023, indicating robust operational performance and market expansion over the period.

Total Assets Movement

Total assets showed a gradual increase from 7.44 billion US dollars in 2019 to approximately 9.17 billion US dollars in 2024. There was a slight decline observed between 2021 and 2022, where total assets decreased from about 8.24 billion to 8.15 billion US dollars, before resuming growth thereafter. Overall, assets expanded in line with revenue growth, suggesting ongoing investments and asset accumulation to support business operations.

Reported Total Asset Turnover Ratio

This ratio initially declined from 0.93 in 2019 to 0.86 in 2021, indicating a period where asset utilization efficiency decreased. However, from 2021 onwards, there was a recovery and improvement in the turnover ratio, climbing to 1.05 by 2024. This upward trend implies enhanced efficiency in generating revenue from the asset base during the latter years.

Adjusted Total Assets and Turnover

Adjusted total assets followed a trend very similar to reported total assets, increasing from 7.67 billion US dollars in 2019 to roughly 9.19 billion US dollars in 2024. The adjusted total asset turnover ratio exhibited the same pattern as the reported ratio, declining to 0.86 in 2021 before improving steadily to 1.04 by 2024. This parallel movement suggests consistency between reported and adjusted figures in reflecting asset utilization dynamics.

Summary of Insights

Over the six-year period, the data reflects strong revenue growth supported by a growing asset base. The initial decline in asset turnover ratios suggests a temporary dip in operational efficiency or changes in asset structure around 2020-2021. The subsequent improvement in turnover ratios through 2024 indicates effective management and better utilization of assets to drive revenue. The coherence between reported and adjusted asset figures reinforces the reliability of these conclusions.

The analysis of the annual financial data reveals notable trends in liquidity and asset management over the six-year period.

Current Assets

Current assets exhibit an overall upward trajectory, increasing from 2,236,280 thousand US dollars in 2019 to 3,185,207 thousand US dollars in 2024. There was a significant peak in 2021 at 2,843,309 thousand US dollars, a slight decline in 2022 to 2,631,983 thousand US dollars, followed by steady growth through 2023 and 2024.

Current Liabilities

Current liabilities display more volatility with notable fluctuations. Starting at 1,127,733 thousand US dollars in 2019, they decreased substantially in 2020 to 885,195 thousand US dollars, then sharply increased to 1,934,085 thousand US dollars in 2021. This was followed by a decline in the next years, reaching 1,230,062 thousand US dollars in 2023, and rising again to 1,828,519 thousand US dollars in 2024.

Reported Current Ratio

The reported current ratio oscillates between 1.47 and 2.61 during the period, indicating fluctuating liquidity conditions. It peaked in 2020 at 2.61, suggesting strong short-term financial stability, then dropped to a low of 1.47 in 2021, reflecting decreased liquidity. It recovered in 2022 and 2023 to values above 2.3, before declining again to 1.74 in 2024.

Adjusted Current Assets

Adjusted current assets follow a pattern similar to reported current assets, with incremental growth over the period. Starting at 2,274,089 thousand US dollars in 2019, they steadily increased, reaching 3,203,121 thousand US dollars in 2024. The adjusted figures consistently exceed the reported values, indicating certain reclassifications or adjustments that improve the asset base.

Adjusted Current Ratio

The adjusted current ratio mirrors the behavior of the reported current ratio but tends to be slightly higher, ranging from 1.48 to 2.68. This suggests a somewhat stronger liquidity position after adjustments, especially notable in 2020 and 2023. The ratio demonstrates a similar pattern of peak and trough as observed with the reported ratio, peaking in 2020 and diminishing again by 2024.

In summary, the data reveals a general trend of increasing current assets and adjusted current assets, suggesting growth in resource availability. Current liabilities, however, have shown volatility, reflecting variability in short-term obligations. The current ratio fluctuates, indicating changing liquidity, with the strongest liquidity observed in 2020, followed by some declines and partial recoveries in subsequent years. Adjustments to current assets and the resulting adjusted current ratio imply improved reported liquidity when considering these adjustments. Overall, while the asset base is strengthening, the fluctuations in liabilities and liquidity ratios underscore the importance of careful working capital management.

Total Debt

The total debt decreased from 2,849,771 thousand USD in May 2019 to 2,475,529 thousand USD in May 2024, with a slight increase observed in the years 2021 and 2022 before resuming its downward trend. Overall, total debt shows a moderate decline over the six-year period.

Shareholders’ Equity

Shareholders’ equity exhibited a consistent upward trend, increasing from 3,002,721 thousand USD in May 2019 to 4,316,372 thousand USD in May 2024. Although there was a temporary decline in 2022 after 2021’s peak, the equity value recovered and surpassed previous levels in the following years.

Reported Debt to Equity Ratio

The reported debt to equity ratio demonstrated a steady decline from 0.95 in May 2019 to 0.57 in May 2024. This indicates a gradual reduction in leverage, reflecting improved capitalization and stronger equity relative to debt.

Adjusted Total Debt

Adjusted total debt followed a pattern similar to reported total debt, decreasing from 3,048,635 thousand USD in May 2019 to 2,668,080 thousand USD in May 2024. This metric also showed a slight increase around 2022, followed by a reduction in subsequent years, reinforcing the trend of debt diminution.

Adjusted Shareholders’ Equity

Adjusted shareholders’ equity increased significantly from 3,478,709 thousand USD in May 2019 to 4,809,798 thousand USD in May 2024. Despite a dip in 2022, the overall trend shows consistent growth in equity on an adjusted basis.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio steadily declined from 0.88 in May 2019 to 0.55 in May 2024, corroborating the observed improvements in the company's capital structure by showing decreased reliance on debt funding relative to shareholders’ equity.

The financial data reveals a gradual decrease in both reported and adjusted debt to capital ratios over the six-year period from May 31, 2019, to May 31, 2024. This trend indicates an overall reduction in leverage and an improvement in the capital structure.

Total Debt

Total debt decreased from approximately $2.85 billion in 2019 to about $2.48 billion in 2024, showing some fluctuations between years. Notably, total debt peaked in 2022 before dropping again in subsequent years.

Total Capital

Total capital experienced a steady increase across the period, moving from around $5.85 billion in 2019 to nearly $6.79 billion in 2024. This growth suggests an expansion in the company's equity and debt financing combined.

Reported Debt to Capital Ratio

The reported debt to capital ratio declined from 0.49 in 2019 to 0.36 in 2024. This consistent downward trend reflects a strategic reduction in debt proportion relative to total capital.

Adjusted Total Debt and Capital

Adjusted total debt follows a similar pattern to reported total debt, decreasing overall from roughly $3.05 billion in 2019 to about $2.67 billion in 2024. Adjusted total capital also increased steadily from approximately $6.53 billion to around $7.48 billion during the same period.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio shows a decline from 0.47 in 2019 to 0.36 in 2024, mirroring the pattern observed in the reported debt to capital ratio. This implies consistent financial management practices that improve capital structure quality when accounting for adjustments.

Overall, the company demonstrates a clear initiative toward strengthening its balance sheet by lowering leverage ratios while expanding its capital base. The steady increase in total and adjusted capital alongside the decrease in debt ratios suggests prudent financial management focused on reducing risk and enhancing financial stability.

The analysis of the annual financial data reveals several notable trends in the company's balance sheet and leverage metrics over the period from May 31, 2019, to May 31, 2024.

Total Assets and Adjusted Total Assets

Total assets generally exhibit an upward trend, increasing steadily from approximately $7.44 billion in 2019 to around $9.17 billion by 2024. This growth suggests ongoing asset expansion, albeit with minor fluctuations, notably a slight decline between 2021 and 2022. Adjusted total assets follow the same pattern, indicating consistent asset adjustments that track closely with the reported totals.

Shareholders’ Equity and Adjusted Shareholders’ Equity

Shareholders’ equity demonstrates a positive trajectory, growing from roughly $3.00 billion in 2019 to about $4.32 billion in 2024. Although there is a dip in 2022, which lowers equity from the prior year, the general trend remains one of strengthening equity. Adjusted shareholders’ equity similarly increases, maintaining a close relationship with reported equity values and reflecting consistent adjustments over time.

Reported Financial Leverage

The reported financial leverage ratio declines steadily over the period, moving from 2.48 in 2019 down to 2.12 in 2024. This reduction in leverage indicates a gradual decrease in the ratio of total liabilities to equity, which typically points to a stronger equity position relative to liabilities and potentially lower financial risk.

Adjusted Financial Leverage

Adjusted financial leverage presents a similar but more pronounced downward trend, beginning at 2.21 in 2019 and reaching 1.91 by 2024. This suggests an improving capital structure under the adjusted calculations, with decreasing reliance on debt financing relative to equity.

Overall, the company's asset base and equity have expanded consistently over the analyzed period, with a corresponding decline in both reported and adjusted financial leverage. The trends imply improving financial stability and a potentially lower risk profile associated with the company’s capital structure. The slight dips observed in certain years do not detract from the general upward momentum in equity and asset growth, nor from the continued deleveraging demonstrated through leverage ratios.

Net Income

The net income demonstrates an overall upward trend from 884,981 thousand USD in 2019 to 1,571,592 thousand USD in 2024. There was a slight decline from 2019 to 2020, but this was followed by steady growth through subsequent years, with the most significant increases occurring from 2022 to 2024.

Revenue

Revenue increased consistently across the period, starting at 6,892,303 thousand USD in 2019 and reaching 9,596,615 thousand USD in 2024. The growth appears steady, with notable acceleration between 2021 and 2024, indicating strong sales expansion or business scaling during these years.

Reported Net Profit Margin

The reported net profit margin shows some variability but a general improvement over the period. It declined slightly from 12.84% in 2019 to 12.36% in 2020, then rose to a peak of 16.38% by 2024. Margins were relatively stable from 2021 onward, fluctuating within a narrow range around 15% to 16%, signifying efficient cost management or improved operational performance.

Adjusted Net Income

Adjusted net income follows a pattern similar to net income but with greater variation. After a decrease between 2019 and 2020, there was a sharp increase in 2021 and continued growth until 2024, reaching 1,557,503 thousand USD. This suggests that adjustments for non-recurring items or other factors reveal stronger underlying profitability in the later periods.

Adjusted Net Profit Margin

The adjusted net profit margin shows more pronounced fluctuations compared to the reported margin. It dropped notably from 12.57% in 2019 to 10.89% in 2020, then surged to 17.38% in 2022 before slightly declining to 15.28% in 2023 and recovering to 16.23% in 2024. These variations indicate that adjustments have a significant impact on perceived profitability and that core earnings performance improved considerably after 2020.

Overall Insights

The financial data indicate a company experiencing consistent revenue growth accompanied by increasing profitability over the analyzed period. Despite some dips in margins and adjusted income around 2020, the subsequent years show strong recovery and improvement in both net income and profit margins. This suggests effective management of costs and operational efficiencies, along with successful revenue expansion strategies. The adjusted figures imply that underlying business performance improved more significantly than reported results alone might suggest, especially post-2020.

The annual financial data reveals several notable trends in profitability, equity, and return on equity (ROE) metrics over the six-year period from May 31, 2019, to May 31, 2024.

Net Income

The net income shows an overall upward trend, increasing from approximately $885 million in 2019 to $1.57 billion in 2024. Despite a slight dip in 2020 to around $876 million, likely influenced by external factors, the company demonstrated consistent growth in net income from 2021 onward, with significant year-over-year increases through to 2024.

Shareholders' Equity

Shareholders' equity also increased over the period, rising from about $3.0 billion in 2019 to approximately $4.3 billion in 2024. The equity base experienced slight fluctuations, such as a decline between 2021 and 2022, dropping from $3.69 billion to $3.31 billion, which may indicate dividend payments, share repurchases, or other equity adjustments. However, the overall trend remains positive, reflecting renewed capital growth in subsequent years.

Reported Return on Equity (ROE)

Reported ROE exhibited variability but maintained a generally strong level, fluctuating between 27.08% in 2020 and a peak of 37.35% in 2022. The trend suggests effective utilization of equity to generate profits, with particularly high efficiency observed in 2022 and sustained elevated ROE levels above 34% in 2023 and 2024.

Adjusted Net Income

Adjusted net income trends largely mirror reported net income but with some variations. After a decrease in 2020 to approximately $771 million, adjusted net income surged sharply to $1.23 billion in 2021 and peaked around $1.37 billion in 2022. It slightly decreased in 2023 but rebounded to approximately $1.56 billion in 2024, indicating resilience after adjustments for nonrecurring items or other accounting considerations.

Adjusted Shareholders’ Equity

Adjusted shareholders’ equity consistently increased throughout the period, growing from roughly $3.48 billion in 2019 to nearly $4.81 billion in 2024. This smoothing of equity fluctuations relative to reported equity suggests that the adjustments provide a more stable measurement of the company’s capital base, supporting sustained growth and financial stability.

Adjusted Return on Equity (ROE)

The adjusted ROE portrays a similar pattern to the reported ROE but with slightly lower percentages, ranging from 20.92% in 2020 to a high of 35.98% in 2022. The data indicates that, after adjustments, the company still maintains strong profitability relative to adjusted equity, with some volatility but a positive trajectory from 2021 onward. Despite a dip in 2023 to 30.77%, adjusted ROE increased again in 2024 to 32.38%, underscoring continued efficient use of equity to generate profits.

In summary, the company demonstrated solid improvements in profitability and equity over the six years, with strong and relatively stable returns on equity. The fluctuations observed in 2020 likely reflect broader economic challenges, but subsequent years show recovery, growth, and operational efficiency, both on a reported and adjusted basis.

Net Income

The net income has shown a consistent upward trend over the analyzed periods, increasing from $884,981 thousand in 2019 to $1,571,592 thousand in 2024. This indicates steady profitability growth.

Total Assets

Total assets have increased gradually from $7,436,662 thousand in 2019 to $9,168,817 thousand in 2024. This suggests ongoing asset expansion and potential investment in business growth.

Reported Return on Assets (ROA)

Reported ROA improved steadily from 11.9% in 2019 to 17.14% in 2024, reflecting enhanced efficiency in using assets to generate net income over time.

Adjusted Net Income

Adjusted net income exhibited some variability; it decreased from $866,198 thousand in 2019 to $771,223 thousand in 2020, then increased significantly to $1,559,503 thousand in 2024. The initial decline likely reflects specific adjustments or extraordinary items affecting 2020, followed by robust growth thereafter.

Adjusted Total Assets

Adjusted total assets follow a similar pattern to the reported figures, rising from $7,673,335 thousand in 2019 to $9,186,731 thousand in 2024, with minor fluctuations that could be related to adjustment factors.

Adjusted Return on Assets (ROA)

The adjusted ROA dropped from 11.29% in 2019 to 9.97% in 2020, indicating a decline in operational efficiency or impact from extraordinary events. It rebounded sharply to 16.95% in 2024, signifying improved profitability relative to assets after adjustment considerations.