Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Cintas Corp., FCFF calculation
US$ in thousands
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).
- Net Cash Provided by Operating Activities
- The net cash provided by operating activities shows a consistent upward trend over the six-year period. Starting at approximately $1.07 billion in 2019, the figure rises steadily each year to reach about $2.08 billion in 2024. This represents nearly a doubling of operating cash flow, indicating improving operational efficiency and/or growth in core operating income. The most significant annual increases occur between 2023 and 2024, suggesting an acceleration in cash-generating capability during the most recent year.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm similarly demonstrates a steady increase from $873 million in 2019 to $1.75 billion in 2024. This upward trajectory closely parallels the trend in operating cash flow, implying that capital expenditures and other adjustments have remained relatively stable or proportional to operational growth. Although there is a slight dip in 2023 compared to 2022, the overall pattern remains one of growth, with a strong rebound in the final year.
- Overall Financial Insights
- The data indicates solid and sustained growth in both operating cash flow and free cash flow over the analyzed timeframe. The company's ability to generate increasing cash from operations, alongside rising free cash flow, suggests strong financial health and potentially enhanced capacity for reinvestment, debt reduction, or shareholder returns. The acceleration observed in the final year may reflect successful strategic initiatives or favorable market conditions contributing to enhanced liquidity.
Interest Paid, Net of Tax
Cintas Corp., interest paid, net of tax calculation
US$ in thousands
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).
2 2024 Calculation
Interest paid, tax = Interest paid × EITR
= 100,800 × 20.37% = 20,533
The analysis of the available financial data over the specified periods reveals distinct trends in the effective income tax rate (EITR) and net interest paid by the company.
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibited a downward trend from 19.94% in 2019 to a low of 13.73% in 2021. Following this decrease, the rate increased notably to 17.55% in 2022, then continued rising to just above 20% in both 2023 and 2024, reaching 20.38% and 20.37% respectively. This pattern suggests that after a period of tax optimization or benefits which reduced the tax burden between 2019 and 2021, the company experienced a reversal leading to a normalized or higher tax rate in the subsequent years.
- Interest Paid, Net of Tax
- Interest expenses net of tax fluctuated moderately over the six-year span. The amount started at $81.5 million in 2019, increased to a peak of approximately $87.4 million in 2020, then slightly declined in the following years, reducing to $80.3 million by 2024. This indicates some variability in the company’s borrowing costs or debt levels, with a peak in 2020 followed by a gradual reduction. The fluctuations could be associated with changes in debt management strategies, interest rates, or capital structure adjustments.
Enterprise Value to FCFF Ratio, Current
Cintas Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 79,876,250) |
| Free cash flow to the firm (FCFF) | 1,750,579) |
| Valuation Ratio | |
| EV/FCFF | 45.63 |
| Benchmarks | |
| EV/FCFF, Industry | |
| Industrials | 35.08 |
Based on: 10-K (reporting date: 2024-05-31).
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Cintas Corp., historical EV/FCFF calculation, comparison to benchmarks
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).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= 78,197,934 ÷ 1,750,579 = 44.67
- Enterprise Value (EV)
- The enterprise value demonstrates a consistent upward trend over the six-year period. Starting at approximately $29.57 billion in 2019, it increased steadily each year, reaching about $78.20 billion by 2024. The most notable increase appears between 2023 and 2024, where the value jumped substantially, indicating a significant growth in the company's overall market valuation.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm showed growth from 2019 through 2022, rising from roughly $873 million to about $1.38 billion. However, in 2023, there was a slight decline to approximately $1.36 billion, before increasing again to around $1.75 billion in 2024. Overall, the FCFF trend depicts general growth, albeit with some minor fluctuations, suggesting the company has improved its cash-generating ability over time.
- EV/FCFF Ratio
- The ratio of enterprise value to free cash flow to the firm exhibits variability throughout the period. Initially, the ratio decreased from 33.89 in 2019 to 29.64 in 2020, indicating that the enterprise value was growing at a slower rate relative to free cash flow. Following that, the ratio fluctuated around the low 30s until 2022. From 2022 onward, there is a noticeable upward trend, culminating in a ratio of 44.67 in 2024. This increasing ratio suggests that the company's enterprise value has been rising at a faster pace than its free cash flow, which may imply elevated market expectations or valuation pressures during the most recent years.