Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Short-term Activity Ratios (Summary)
Cintas Corp., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2024-11-30), 10-Q (reporting date: 2024-08-31), 10-K (reporting date: 2024-05-31), 10-Q (reporting date: 2024-02-29), 10-Q (reporting date: 2023-11-30), 10-Q (reporting date: 2023-08-31), 10-K (reporting date: 2023-05-31), 10-Q (reporting date: 2023-02-28), 10-Q (reporting date: 2022-11-30), 10-Q (reporting date: 2022-08-31), 10-K (reporting date: 2022-05-31), 10-Q (reporting date: 2022-02-28), 10-Q (reporting date: 2021-11-30), 10-Q (reporting date: 2021-08-31), 10-K (reporting date: 2021-05-31), 10-Q (reporting date: 2021-02-28), 10-Q (reporting date: 2020-11-30), 10-Q (reporting date: 2020-08-31), 10-K (reporting date: 2020-05-31), 10-Q (reporting date: 2020-02-29), 10-Q (reporting date: 2019-11-30), 10-Q (reporting date: 2019-08-31), 10-K (reporting date: 2019-05-31), 10-Q (reporting date: 2019-02-28), 10-Q (reporting date: 2018-11-30), 10-Q (reporting date: 2018-08-31).
- Inventory Turnover
- The inventory turnover ratio exhibits a declining trend from a high of 11.31 in November 2018 to a low around 7.01 in May 2021. Since mid-2021, a gradual recovery is observed, reaching 12.69 by August 2024. This suggests that the company’s efficiency in managing inventory initially weakened but has notably improved in recent periods.
- Receivables Turnover
- The receivables turnover ratio remains relatively stable over the periods, fluctuating narrowly between approximately 7.22 and 8.14. Minor variations indicate consistent effectiveness in collecting receivables without major changes in credit policies or customer payment behavior.
- Payables Turnover
- The payables turnover ratio shows volatility, starting around 16.65 in early periods, peaking near 19.09 in November 2021, then trending downward to 11.97 by August 2024. This implies a lengthening in the time taken to pay suppliers in recent years, which could reflect changes in payment terms or cash management strategies.
- Working Capital Turnover
- Working capital turnover reveals extreme fluctuations, with a sharp increase to 120.4 in May 2022 that appears anomalous, followed by normalization to the range of approximately 4 to 9 in other periods. Excluding this outlier, the ratio maintains a moderate level with slight growth in the later periods, indicating a generally stable but occasionally volatile efficiency in utilizing working capital.
- Average Inventory Processing Period
- The average inventory processing period increased from 32 days in late 2018 to a peak of 52 days between late 2019 and early 2021, implying slower inventory movement during this time. Subsequently, the period declined steadily to 29 days by August 2024, reflecting improved inventory management and faster turnover.
- Average Receivable Collection Period
- This metric remained largely constant in the range of 45 to 51 days throughout the analyzed periods, signaling stable collection practices and no significant shifts in receivables management.
- Operating Cycle
- The operating cycle lengthened from about 80 days in 2018 to a peak of approximately 101 days in early 2021, then shortened again to around 79 days by mid-2024. The initial extension coincides with the inventory turnover increase and suggests a temporary decline in overall operational efficiency, followed by recovery.
- Average Payables Payment Period
- The average payables payment period exhibited a gradual increase from about 22 days in the earlier periods to 30 days by August 2024. This indicates prolonged payment periods to suppliers over time, which may be a strategic move to conserve cash or reflect renegotiated payment terms.
- Cash Conversion Cycle
- The cash conversion cycle increased from 58 days in early periods to a high of 78 days around May 2020, indicating a slowdown in converting investments into cash. Thereafter, it steadily decreased to 49 days by August 2024, suggesting improved liquidity management and operational efficiency in recent years.
Turnover Ratios
Average No. Days
Inventory Turnover
Cintas Corp., inventory turnover calculation (quarterly data)
Based on: 10-Q (reporting date: 2024-11-30), 10-Q (reporting date: 2024-08-31), 10-K (reporting date: 2024-05-31), 10-Q (reporting date: 2024-02-29), 10-Q (reporting date: 2023-11-30), 10-Q (reporting date: 2023-08-31), 10-K (reporting date: 2023-05-31), 10-Q (reporting date: 2023-02-28), 10-Q (reporting date: 2022-11-30), 10-Q (reporting date: 2022-08-31), 10-K (reporting date: 2022-05-31), 10-Q (reporting date: 2022-02-28), 10-Q (reporting date: 2021-11-30), 10-Q (reporting date: 2021-08-31), 10-K (reporting date: 2021-05-31), 10-Q (reporting date: 2021-02-28), 10-Q (reporting date: 2020-11-30), 10-Q (reporting date: 2020-08-31), 10-K (reporting date: 2020-05-31), 10-Q (reporting date: 2020-02-29), 10-Q (reporting date: 2019-11-30), 10-Q (reporting date: 2019-08-31), 10-K (reporting date: 2019-05-31), 10-Q (reporting date: 2019-02-28), 10-Q (reporting date: 2018-11-30), 10-Q (reporting date: 2018-08-31).
1 Q2 2025 Calculation
Inventory turnover
= (Cost of revenueQ2 2025
+ Cost of revenueQ1 2025
+ Cost of revenueQ4 2024
+ Cost of revenueQ3 2024)
÷ Inventories, net
= ( + + + )
÷ =
The financial data reveals several notable trends and patterns across the examined periods.
- Cost of Revenue
- The cost of revenue shows a generally increasing trend from August 2018 through November 2024. While fluctuations are observed quarter to quarter, the overall trajectory is upward, with values rising from approximately $923 million in August 2018 to over $1.28 billion by November 2024. A significant dip appears around May and August 2020, coinciding possibly with market disruptions, but the figures recover and continue to rise thereafter.
- Inventories, Net
- Net inventories display growth from August 2018 to November 2020, increasing from roughly $304 million to a peak around $534 million. Following this peak, inventories generally decline with some volatility, leveling off near $395 million by November 2024. This reduction after 2020 suggests a strategic inventory management shift or improved turnover efficiency.
- Inventory Turnover Ratio
- The inventory turnover ratio data begins from May 2019 and shows an overall improvement across the available periods. Initially around 11.25, it dips significantly through 2020, reaching a low near 7.01 in late 2020. Subsequently, the ratio steadily improves, surpassing previous levels and reaching approximately 12.69 by November 2024. This indicates increasing efficiency in managing inventory relative to cost of goods sold, suggesting improved operational efficiency or better alignment of inventory with sales demand.
In summary, while the cost of revenue steadily climbs over the years, net inventories peak and then decline after 2020, highlighting a notable inventory reduction or optimization. The inventory turnover ratio mirrors this by showing an initial decrease during the 2020 downturn, followed by a continual improvement, reflecting enhanced inventory management practices and possibly stronger sales or reduced inventory holding periods. Together, these trends suggest a progressive enhancement in operational efficiency and cost management over the reported intervals.
Receivables Turnover
Cintas Corp., receivables turnover calculation (quarterly data)
Based on: 10-Q (reporting date: 2024-11-30), 10-Q (reporting date: 2024-08-31), 10-K (reporting date: 2024-05-31), 10-Q (reporting date: 2024-02-29), 10-Q (reporting date: 2023-11-30), 10-Q (reporting date: 2023-08-31), 10-K (reporting date: 2023-05-31), 10-Q (reporting date: 2023-02-28), 10-Q (reporting date: 2022-11-30), 10-Q (reporting date: 2022-08-31), 10-K (reporting date: 2022-05-31), 10-Q (reporting date: 2022-02-28), 10-Q (reporting date: 2021-11-30), 10-Q (reporting date: 2021-08-31), 10-K (reporting date: 2021-05-31), 10-Q (reporting date: 2021-02-28), 10-Q (reporting date: 2020-11-30), 10-Q (reporting date: 2020-08-31), 10-K (reporting date: 2020-05-31), 10-Q (reporting date: 2020-02-29), 10-Q (reporting date: 2019-11-30), 10-Q (reporting date: 2019-08-31), 10-K (reporting date: 2019-05-31), 10-Q (reporting date: 2019-02-28), 10-Q (reporting date: 2018-11-30), 10-Q (reporting date: 2018-08-31).
1 Q2 2025 Calculation
Receivables turnover
= (RevenueQ2 2025
+ RevenueQ1 2025
+ RevenueQ4 2024
+ RevenueQ3 2024)
÷ Accounts receivable, net
= ( + + + )
÷ =
The quarterly financial data reveals several notable trends in revenue, accounts receivable, and receivables turnover ratios over the examined periods.
- Revenue
- Revenue indicates a generally upward trajectory from August 2018 through November 2024, rising from approximately 1.70 billion USD to over 2.56 billion USD. Some fluctuations occur within this span, most notably a decline during the early months of 2020, coinciding with the impact period of the global economic disruptions. After this dip in May 2020, revenue resumes a steady increase, reaching new highs by the latter part of 2024. This pattern suggests resilience and a recovery phase post-economic stress, with ongoing growth momentum.
- Accounts Receivable, Net
- Accounts receivable show an overall increase through the observed quarters, beginning at about 838 million USD in August 2018 and climbing to more than 1.37 billion USD by November 2024. Similar to revenue, there is a visible contraction around mid-2020 but it is less pronounced and shorter in duration. Noteworthy is the acceleration in growth of receivables from 2021 onward, suggesting increased sales volume or extended credit terms. The increase in receivables relative to revenue growth may indicate a potential area to monitor for cash flow efficiency.
- Receivables Turnover
- The receivables turnover ratio, available from February 2019 onward, fluctuates subtly between approximately 7.22 and 8.14 during the period. This ratio generally remains stable without a clear upward or downward trend, indicating a relatively consistent efficiency in collecting receivables throughout the examined quarters. The slight dips and recoveries align loosely with revenue and receivables changes, reflecting operational responsiveness to market conditions and credit management practices.
In summary, the data depicts a company with growing revenues and increasing accounts receivable balances, maintaining a stable receivables turnover ratio. The temporary decline around early 2020 reflects external economic impacts, from which there is evident recovery. The steady turnover ratio amidst rising receivables suggests that despite expanding credit exposure, collection efficiency has been largely sustained. Overall, the patterns portray growth accompanied by effective receivables management, albeit with potential attention needed on credit policy as receivables proportions increase.
Payables Turnover
Cintas Corp., payables turnover calculation (quarterly data)
Based on: 10-Q (reporting date: 2024-11-30), 10-Q (reporting date: 2024-08-31), 10-K (reporting date: 2024-05-31), 10-Q (reporting date: 2024-02-29), 10-Q (reporting date: 2023-11-30), 10-Q (reporting date: 2023-08-31), 10-K (reporting date: 2023-05-31), 10-Q (reporting date: 2023-02-28), 10-Q (reporting date: 2022-11-30), 10-Q (reporting date: 2022-08-31), 10-K (reporting date: 2022-05-31), 10-Q (reporting date: 2022-02-28), 10-Q (reporting date: 2021-11-30), 10-Q (reporting date: 2021-08-31), 10-K (reporting date: 2021-05-31), 10-Q (reporting date: 2021-02-28), 10-Q (reporting date: 2020-11-30), 10-Q (reporting date: 2020-08-31), 10-K (reporting date: 2020-05-31), 10-Q (reporting date: 2020-02-29), 10-Q (reporting date: 2019-11-30), 10-Q (reporting date: 2019-08-31), 10-K (reporting date: 2019-05-31), 10-Q (reporting date: 2019-02-28), 10-Q (reporting date: 2018-11-30), 10-Q (reporting date: 2018-08-31).
1 Q2 2025 Calculation
Payables turnover
= (Cost of revenueQ2 2025
+ Cost of revenueQ1 2025
+ Cost of revenueQ4 2024
+ Cost of revenueQ3 2024)
÷ Accounts payable
= ( + + + )
÷ =
The analysis of the financial data reveals notable trends in cost of revenue, accounts payable, and payables turnover ratios over the presented periods.
- Cost of Revenue
- The cost of revenue demonstrates a general upward trajectory from August 2018 through August 2024. Starting at approximately $923 million in August 2018, the cost experienced a few fluctuations but generally increased, reaching over $1.28 billion by November 2024. A significant dip occurred around May and August 2020, likely related to external economic factors, but the upward trend resumed subsequently with steady increases observed through 2022 to 2024.
- Accounts Payable
- Accounts payable also show an increasing trend over the time frame analyzed. From a value of approximately $214 million in August 2018, accounts payable fluctuated through the periods, with some noticeable rises and declines. For instance, accounts payable peaked near $274 million in November 2020 before dipping sharply below $203 million by August 2021. From late 2021 onwards, a strong upward movement is visible, climbing to over $418 million by November 2024, indicating greater outstanding liabilities or purchases on credit over time.
- Payables Turnover Ratio
- The payables turnover ratio, starting from data available only in May 2019, shows varied movement across the periods. The ratio was around 16.65 in May 2019, declining to approximately 13.71 by November 2020, indicating slower payment of supplier obligations. Subsequently, the ratio rose again, peaking near 19.09 in February 2022, suggesting more efficient turnover of payables at that point. However, from 2022 onwards, the ratio gradually declined to approximately 11.97 by November 2024, the lowest in the observed period, which may imply lengthening payment cycles or reduced purchasing efficiency.
Overall, the data indicates increasing cost structures and liabilities over time, accompanied by fluctuating efficiency in managing payables. The recent decline in payables turnover ratio warrants attention as it might signal changes in payment practices that could impact cash flow management.
Working Capital Turnover
Cintas Corp., working capital turnover calculation (quarterly data)
Based on: 10-Q (reporting date: 2024-11-30), 10-Q (reporting date: 2024-08-31), 10-K (reporting date: 2024-05-31), 10-Q (reporting date: 2024-02-29), 10-Q (reporting date: 2023-11-30), 10-Q (reporting date: 2023-08-31), 10-K (reporting date: 2023-05-31), 10-Q (reporting date: 2023-02-28), 10-Q (reporting date: 2022-11-30), 10-Q (reporting date: 2022-08-31), 10-K (reporting date: 2022-05-31), 10-Q (reporting date: 2022-02-28), 10-Q (reporting date: 2021-11-30), 10-Q (reporting date: 2021-08-31), 10-K (reporting date: 2021-05-31), 10-Q (reporting date: 2021-02-28), 10-Q (reporting date: 2020-11-30), 10-Q (reporting date: 2020-08-31), 10-K (reporting date: 2020-05-31), 10-Q (reporting date: 2020-02-29), 10-Q (reporting date: 2019-11-30), 10-Q (reporting date: 2019-08-31), 10-K (reporting date: 2019-05-31), 10-Q (reporting date: 2019-02-28), 10-Q (reporting date: 2018-11-30), 10-Q (reporting date: 2018-08-31).
1 Q2 2025 Calculation
Working capital turnover
= (RevenueQ2 2025
+ RevenueQ1 2025
+ RevenueQ4 2024
+ RevenueQ3 2024)
÷ Working capital
= ( + + + )
÷ =
- Working Capital
- The working capital figures show considerable fluctuation over the reported periods. Initially, working capital increased from approximately 1.43 billion US dollars in August 2018 to a peak of roughly 1.71 billion by February 2021. However, it then sharply declined to a low point of approximately 208 million US dollars by November 2021. Following this sharp drop, working capital gradually recovered in subsequent quarters, reaching a high of around 1.82 billion by November 2023 before showing a moderate decline toward the middle of 2024. Overall, the pattern indicates significant volatility, with a notable trough in late 2021 followed by a recovery phase.
- Revenue
- Revenue demonstrates a general upward trend throughout the entire timeframe. Starting at around 1.70 billion US dollars in August 2018, revenue steadily increased with minor fluctuations, reaching approximately 2.56 billion by November 2024. Despite some periods of slower growth or stabilization, the overall trajectory is positive, reflecting growth in the company’s sales over the period analyzed.
- Working Capital Turnover
- Working capital turnover ratios exhibit marked irregularity, with some extreme outliers in certain quarters. Early in the series, turnover ratios range between approximately 4.0 and 6.2, representing relatively stable efficiency in utilizing working capital to generate revenue. However, beginning in May 2021, the ratio spikes dramatically, reaching very high levels including 34.83 and an extreme peak of 120.40 in subsequent quarters, before returning to more normalized values between 4.9 and 9.2 from late 2022 onward. These spikes coincide with the period of the sharp working capital decline, indicating a temporary but significant increase in turnover driven by the contraction in working capital rather than a proportional increase in revenue. Post these spikes, the turnover stabilizes to levels closer to historical norms, suggesting a normalization of working capital management or operational efficiency after the volatility.
- Summary Insights
- The data reflects a period of operational and financial volatility particularly evident in the working capital and turnover metrics during 2021. While revenue maintained consistent growth, working capital experienced sharp declines and subsequent recovery, likely reflecting changes in asset management or short-term liabilities. The abnormal turnover spikes highlight the impact of these working capital changes on operational efficiency ratios but do not correspond with commensurate revenue growth, suggesting balance sheet adjustments rather than pure operational changes. Post-2021, both working capital and turnover ratios move towards steadier levels, consistent with stable revenue growth and improved financial management practices.
Average Inventory Processing Period
Cintas Corp., average inventory processing period calculation (quarterly data)
Based on: 10-Q (reporting date: 2024-11-30), 10-Q (reporting date: 2024-08-31), 10-K (reporting date: 2024-05-31), 10-Q (reporting date: 2024-02-29), 10-Q (reporting date: 2023-11-30), 10-Q (reporting date: 2023-08-31), 10-K (reporting date: 2023-05-31), 10-Q (reporting date: 2023-02-28), 10-Q (reporting date: 2022-11-30), 10-Q (reporting date: 2022-08-31), 10-K (reporting date: 2022-05-31), 10-Q (reporting date: 2022-02-28), 10-Q (reporting date: 2021-11-30), 10-Q (reporting date: 2021-08-31), 10-K (reporting date: 2021-05-31), 10-Q (reporting date: 2021-02-28), 10-Q (reporting date: 2020-11-30), 10-Q (reporting date: 2020-08-31), 10-K (reporting date: 2020-05-31), 10-Q (reporting date: 2020-02-29), 10-Q (reporting date: 2019-11-30), 10-Q (reporting date: 2019-08-31), 10-K (reporting date: 2019-05-31), 10-Q (reporting date: 2019-02-28), 10-Q (reporting date: 2018-11-30), 10-Q (reporting date: 2018-08-31).
1 Q2 2025 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
The analysis reveals notable fluctuations and trends in the inventory management metrics over the observed periods.
- Inventory Turnover Ratio
- The inventory turnover ratio exhibits a declining trend initially, starting from a high level above 11 in mid-2019 and decreasing steadily to a low of approximately 7 by early 2021. This decline indicates a slowdown in inventory turnover during this period. However, from mid-2021 onward, the ratio begins to recover and shows a consistent upward trajectory, reaching nearly 13 by late 2024. This improvement suggests enhanced efficiency in inventory management and faster turnover in recent quarters.
- Average Inventory Processing Period
- The average inventory processing period, measured in days, presents an inverse pattern to the turnover ratio, which is consistent with their conceptual relationship. Initially stable at around 32-33 days, it increases markedly to a peak of about 52 days between late 2019 and early 2021, signifying slower processing and longer holding times for inventory. Following this peak, the period steadily decreases, falling to approximately 29 days by late 2024, indicating an acceleration in inventory processing times and improved operational efficiency by the end of the observed timeline.
Overall, the data show a period of decreased inventory management efficiency culminating around early 2021, followed by a phase of progressive recovery and improvement in both turnover ratios and processing periods through to late 2024. These patterns suggest adaptive operational responses to prior inefficiencies or external challenges affecting inventory handling during the earlier periods.
Average Receivable Collection Period
Cintas Corp., average receivable collection period calculation (quarterly data)
Based on: 10-Q (reporting date: 2024-11-30), 10-Q (reporting date: 2024-08-31), 10-K (reporting date: 2024-05-31), 10-Q (reporting date: 2024-02-29), 10-Q (reporting date: 2023-11-30), 10-Q (reporting date: 2023-08-31), 10-K (reporting date: 2023-05-31), 10-Q (reporting date: 2023-02-28), 10-Q (reporting date: 2022-11-30), 10-Q (reporting date: 2022-08-31), 10-K (reporting date: 2022-05-31), 10-Q (reporting date: 2022-02-28), 10-Q (reporting date: 2021-11-30), 10-Q (reporting date: 2021-08-31), 10-K (reporting date: 2021-05-31), 10-Q (reporting date: 2021-02-28), 10-Q (reporting date: 2020-11-30), 10-Q (reporting date: 2020-08-31), 10-K (reporting date: 2020-05-31), 10-Q (reporting date: 2020-02-29), 10-Q (reporting date: 2019-11-30), 10-Q (reporting date: 2019-08-31), 10-K (reporting date: 2019-05-31), 10-Q (reporting date: 2019-02-28), 10-Q (reporting date: 2018-11-30), 10-Q (reporting date: 2018-08-31).
1 Q2 2025 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
- Receivables Turnover Ratio Trends
- The receivables turnover ratio exhibits moderate fluctuations over the analyzed periods, beginning at 7.57 in mid-2019 and peaking at 8.14 by August 2020. Following this peak, the ratio experiences a gradual decline, with values generally ranging between 7.2 and 7.8. The most recent data points indicate a slight reduction, with the ratio moving towards the lower end of this range, settling around 7.25 as of November 2024. Overall, the turnover efficiency remains relatively stable, showing no drastic deterioration or improvement.
- Average Receivable Collection Period Trends
- The average collection period in days demonstrates a complementary pattern to the receivables turnover. Starting near 48 days in mid-2019, the period briefly improves to a low of 45 days around mid-2020, indicating faster collection during that timeframe. Subsequently, it stabilizes predominantly between 47 and 49 days, with occasional slight increments reaching up to 51 days. Notably, the collection period tends to lengthen marginally in the later periods, touching near 50 days in late 2024, suggesting slower receivable turnover towards the end of the timeline analyzed.
- Relationship and Insights
- The inverse relationship between the receivables turnover ratio and the average collection period is evident, as improvements in one metric correspond to declines in the other. The data reflects that after an initial peak in turnover and reduction in days outstanding around 2020, the subsequent periods show a modest easing of collection efficiency. This trend may imply external factors influencing payment speeds or credit policies. However, the variations are contained within relatively narrow ranges, indicating consistent management of receivables over time.
Operating Cycle
Cintas Corp., operating cycle calculation (quarterly data)
No. days
Based on: 10-Q (reporting date: 2024-11-30), 10-Q (reporting date: 2024-08-31), 10-K (reporting date: 2024-05-31), 10-Q (reporting date: 2024-02-29), 10-Q (reporting date: 2023-11-30), 10-Q (reporting date: 2023-08-31), 10-K (reporting date: 2023-05-31), 10-Q (reporting date: 2023-02-28), 10-Q (reporting date: 2022-11-30), 10-Q (reporting date: 2022-08-31), 10-K (reporting date: 2022-05-31), 10-Q (reporting date: 2022-02-28), 10-Q (reporting date: 2021-11-30), 10-Q (reporting date: 2021-08-31), 10-K (reporting date: 2021-05-31), 10-Q (reporting date: 2021-02-28), 10-Q (reporting date: 2020-11-30), 10-Q (reporting date: 2020-08-31), 10-K (reporting date: 2020-05-31), 10-Q (reporting date: 2020-02-29), 10-Q (reporting date: 2019-11-30), 10-Q (reporting date: 2019-08-31), 10-K (reporting date: 2019-05-31), 10-Q (reporting date: 2019-02-28), 10-Q (reporting date: 2018-11-30), 10-Q (reporting date: 2018-08-31).
1 Q2 2025 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
The analysis of the quarterly trends for the average inventory processing period, average receivable collection period, and operating cycle reveals several noteworthy patterns over the observed timeline.
- Average Inventory Processing Period
- This metric was initially reported at 32 days, maintaining stability around this figure for several quarters. Starting in August 2020, a marked increase is observed, peaking at 52 days in February and May 2021. Following this peak, the period gradually declines to a low of 29 days by November 2024. The overall trend suggests an initial escalation in inventory processing duration, likely reflecting operational or supply chain adjustments, followed by a steady improvement to shorter processing times in later periods.
- Average Receivable Collection Period
- The receivable collection period demonstrated relative stability throughout the timeframe, fluctuating modestly around the mid to high 40s in days. Values generally ranged between 45 and 51 days, with no pronounced upward or downward trend. This consistency indicates maintained efficiency in receivables management, without significant changes in the time taken to collect payments from customers.
- Operating Cycle
- The operating cycle exhibited an increasing pattern from approximately 80 days to a peak near 101 days around early 2021, which aligns temporally with the increase in inventory processing days. Subsequently, the operating cycle length gradually reduces back to the high 70s by late 2024. This pattern suggests that the overall cash-to-cash cycle lengthened initially, likely due to inventory handling delays, then improved steadily as inventory processing times decreased, while receivable periods remained stable.
In summary, the data reflects a period of operational strain or adjustments resulting in longer inventory processing and an extended operating cycle between mid-2020 and early 2021. Following this, the company appears to have regained efficiency, particularly in inventory management, leading to shortened operating cycles towards the end of the analyzed period. Receivables collection remained consistent, providing a stabilizing factor in working capital management throughout.
Average Payables Payment Period
Cintas Corp., average payables payment period calculation (quarterly data)
Based on: 10-Q (reporting date: 2024-11-30), 10-Q (reporting date: 2024-08-31), 10-K (reporting date: 2024-05-31), 10-Q (reporting date: 2024-02-29), 10-Q (reporting date: 2023-11-30), 10-Q (reporting date: 2023-08-31), 10-K (reporting date: 2023-05-31), 10-Q (reporting date: 2023-02-28), 10-Q (reporting date: 2022-11-30), 10-Q (reporting date: 2022-08-31), 10-K (reporting date: 2022-05-31), 10-Q (reporting date: 2022-02-28), 10-Q (reporting date: 2021-11-30), 10-Q (reporting date: 2021-08-31), 10-K (reporting date: 2021-05-31), 10-Q (reporting date: 2021-02-28), 10-Q (reporting date: 2020-11-30), 10-Q (reporting date: 2020-08-31), 10-K (reporting date: 2020-05-31), 10-Q (reporting date: 2020-02-29), 10-Q (reporting date: 2019-11-30), 10-Q (reporting date: 2019-08-31), 10-K (reporting date: 2019-05-31), 10-Q (reporting date: 2019-02-28), 10-Q (reporting date: 2018-11-30), 10-Q (reporting date: 2018-08-31).
1 Q2 2025 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
The payables turnover ratio and the average payables payment period reflect the company's efficiency in managing its accounts payable over the observed quarters.
- Payables Turnover Ratio
- The payables turnover ratio shows some fluctuation over the periods analyzed, starting around 16.65 and generally exhibiting a slight downward trend towards the end of the timeline, reaching approximately 11.97. The ratio peaked at 19.09 during the August 31, 2021 period, indicating a moment of heightened efficiency in paying off suppliers. Subsequent values trend downward from this peak, suggesting a gradual decline in turnover speed. This decline may signal an increase in the time taken to settle payables or a strategic adjustment in payment terms with suppliers.
- Average Payables Payment Period
- The average payables payment period, expressing the number of days taken to pay suppliers, shows an inverse relationship with the payables turnover ratio, generally ranging from 19 to 30 days. Initially, values hovered around 22 to 24 days, converging with the higher payables turnover ratios. Post the peak turnover period, the payment period slightly increased, reaching 29 to 30 days towards the latter periods. This lengthening suggests a trend toward slower payments or extended credit terms granted by suppliers, corroborating the observed decrease in payables turnover ratio.
- Overall Analysis
- Over the duration analyzed, the company appears to have experienced a shift towards slower settlement of payables, as evidenced by the decreasing payables turnover ratio and the increasing average payment period. The momentary peak in payables turnover in August 2021 indicates a period of improved payment efficiency, which has gradually reversed. These patterns may reflect changing operational strategies, liquidity management, or altered supplier agreements impacting the company's accounts payable management.
Cash Conversion Cycle
Cintas Corp., cash conversion cycle calculation (quarterly data)
No. days
Based on: 10-Q (reporting date: 2024-11-30), 10-Q (reporting date: 2024-08-31), 10-K (reporting date: 2024-05-31), 10-Q (reporting date: 2024-02-29), 10-Q (reporting date: 2023-11-30), 10-Q (reporting date: 2023-08-31), 10-K (reporting date: 2023-05-31), 10-Q (reporting date: 2023-02-28), 10-Q (reporting date: 2022-11-30), 10-Q (reporting date: 2022-08-31), 10-K (reporting date: 2022-05-31), 10-Q (reporting date: 2022-02-28), 10-Q (reporting date: 2021-11-30), 10-Q (reporting date: 2021-08-31), 10-K (reporting date: 2021-05-31), 10-Q (reporting date: 2021-02-28), 10-Q (reporting date: 2020-11-30), 10-Q (reporting date: 2020-08-31), 10-K (reporting date: 2020-05-31), 10-Q (reporting date: 2020-02-29), 10-Q (reporting date: 2019-11-30), 10-Q (reporting date: 2019-08-31), 10-K (reporting date: 2019-05-31), 10-Q (reporting date: 2019-02-28), 10-Q (reporting date: 2018-11-30), 10-Q (reporting date: 2018-08-31).
1 Q2 2025 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
- Average Inventory Processing Period
- The average inventory processing period shows a gradual increase starting at 32 days in mid-2019, peaking at 52 days towards the end of 2020 and early 2021. After this peak, a declining trend is observed, with the period decreasing steadily to 29 days by late 2024. This indicates an initial lengthening in inventory turnover time, followed by improvement in managing inventory more efficiently in later periods.
- Average Receivable Collection Period
- The average receivable collection period remains relatively stable throughout the entire timeframe, fluctuating narrowly around the mid to high 40-day range. It showed slight increases and decreases between 45 and 51 days, suggesting consistent credit and collection policies with minor variations but no significant long-term changes.
- Average Payables Payment Period
- The average payables payment period exhibits more variability, beginning at 22 days in mid-2019, increasing to a peak of 30 days by late 2024. The period experienced occasional dips but generally trended upward, indicating a tendency to extend payment terms with suppliers over time, possibly to optimize cash outflows or manage liquidity strategically.
- Cash Conversion Cycle
- The cash conversion cycle starts around 58 days in mid-2019 and rises to a high of 78 days at the end of 2020 and early 2021. Following this peak, a downward trend is evident, decreasing steadily to 49 days by late 2024. The initial lengthening of the cycle corresponds with increased inventory and payables periods, possibly reflecting supply chain or operational challenges. The subsequent reduction suggests improved cash flow management and operational efficiency.