Cintas Corp. (NASDAQ:CTAS)

The financial data reveals notable trends in key performance indicators over the six-year period. Net operating profit after taxes (NOPAT) demonstrated a general upward trajectory, increasing from approximately $1.01 billion in 2019 to about $1.62 billion in 2024. This growth indicates improved operational profitability over time.

The cost of capital exhibited a gradual increase, rising from 16.18% in 2019 to 17.28% in 2024. This upward trend suggests a modestly higher required return on invested capital, potentially reflecting changes in market conditions or risk perceptions.

Invested capital experienced fluctuations but generally trended upward. It started at approximately $6.50 billion in 2019, modestly declined in 2020, then rebounded and increased to roughly $7.22 billion by 2024. The incremental increase in invested capital over the period reflects ongoing investment or growth initiatives.

Economic profit displayed a significant improvement over the years. Initially negative at about -$44.8 million in 2019 and worsening to nearly -$97.0 million in 2020, economic profit then moved toward breakeven in 2021, before turning distinctly positive from 2022 onward. By 2024, economic profit reached approximately $376.7 million, indicating that the returns from the invested capital substantially exceeded the cost of capital during the latter years.

Net Operating Profit After Taxes (NOPAT)

Consistently increased with an accelerated pace after 2020, reflecting stronger earnings capacity.

Cost of Capital

Steadily rose, indicating a slightly higher expected return requirement or increased financial risk.

Invested Capital

Overall growth with minor fluctuations, suggesting ongoing capital deployment and expansion efforts.

Economic Profit

From negative to positive territory, highlighting enhanced value creation and efficient capital utilization in more recent years.

The financial data reveals notable trends in profitability over the six-year period ending May 31, 2024. Both net income and net operating profit after taxes (NOPAT) demonstrate consistent growth, indicating strengthening financial performance.

Net Income Trends

Net income experienced minor fluctuations in the early years, with a slight decrease from 884,981 thousand USD in 2019 to 876,037 thousand USD in 2020. From 2020 onwards, net income shows a steady upward trajectory, increasing annually to reach 1,571,592 thousand USD by 2024. This upward trend suggests successful operational and revenue enhancements that have contributed to improved bottom-line results.

NOPAT Trends

NOPAT follows a similar pattern but with more pronounced growth. After a slight dip from 1,006,907 thousand USD in 2019 to 973,389 thousand USD in 2020, NOPAT increased significantly each year thereafter, culminating at 1,624,422 thousand USD in 2024. The stronger growth in NOPAT compared to net income may reflect efficiency improvements, effective tax management, or a focus on after-tax operating profitability.

Comparative Insights

Over the period analyzed, the gap between NOPAT and net income widened, indicating that operating profitability net of taxes is improving at a faster rate than net income alone. This could suggest improved operational efficiency or changes in financial structure affecting income components outside operating results.

Overall Pattern

The data illustrates resilience and gradually accelerating profitability growth following 2020, which may correspond with recovery or strategic initiatives undertaken by the company. The consistent upward movement in these key profitability metrics over multiple years points toward a robust and improving financial profile.

The financial data demonstrates a noticeable upward trend in income tax expense over the six-year period. Starting at approximately $220 million in 2019, the tax expense decreased slightly in the following two years, reaching a low point of around $177 million in 2021. From 2021 onwards, however, there is a significant increase, peaking at just over $400 million in 2024. This reflects a substantial rise in tax obligations in the most recent years.

Similarly, cash operating taxes exhibit a consistent increase throughout the period. Beginning at about $208 million in 2019, the cash operating taxes experienced a progressive growth, with a minor dip in 2022 around $231 million, followed by a sharp rise in subsequent years. By 2024, cash operating taxes peaked at approximately $454 million, more than doubling the starting figure.

Income Tax Expense

Initial decline from 2019 to 2021, followed by a strong upward trajectory through 2024.

Cash Operating Taxes

Consistent growth with a slight fluctuation in 2022, culminating in a substantial increase by 2024.

Overall Trends

Both income tax expense and cash operating taxes show marked increases over the analyzed period, especially from 2021 onward, indicating rising tax burdens which may reflect higher taxable income or changes in tax rates or regulations.

The financial data over the six-year period reveals several notable trends in the company's capital structure and financial position.

Total reported debt & leases

Debt levels exhibit some fluctuations but generally show a decreasing trend from 2019 through 2024. The total reported debt decreased from approximately $3.05 billion in 2019 to around $2.67 billion in 2024, with the highest value observed in 2019 and a notable decline by 2020. Debt levels increased slightly during 2021 and 2022 but again decreased in subsequent years.

Shareholders’ equity

Shareholders’ equity increases consistently over the period, reflecting growth in net assets attributable to shareholders. It rose from about $3.00 billion in 2019 to approximately $4.32 billion in 2024, with a significant rise between 2019 and 2021, followed by some variability but an overall upward trajectory through to 2024. This suggests strengthening financial stability and retained earnings growth.

Invested capital

The invested capital, representing the total amount of capital invested in the company's operations, experiences moderate growth. Starting at roughly $6.50 billion in 2019, it remains relatively stable through 2020 but then steadily increases to about $7.22 billion by 2024. This gradual growth indicates continued investment in business assets or operations, supporting expansion or enhancement efforts.

Overall, the data indicates that the company has been managing its debt prudently while enhancing its equity base and overall capital investment. This pattern implies a strengthening balance sheet and potentially a lower financial risk profile over the analyzed period.

The financial analysis reveals significant changes in several key metrics over the six-year period ending in May 2024. The economic profit has exhibited a notable upward trend, transitioning from negative values in the initial years to strong positive gains in the later years. Specifically, economic profit was negative in fiscal years 2019 through 2021, with the lowest point occurring in 2020. However, starting in 2022, economic profit turned positive and has continued to increase substantially through 2024.

Invested capital has shown a relatively stable pattern with moderate fluctuations. The figure slightly declined from 2019 to 2020, followed by a recovery and gradual increase through 2024. Although the changes in invested capital are not as dramatic as those observed in economic profit, the general trend reflects modest growth over the analyzed period.

The economic spread ratio, which measures the return on invested capital relative to the cost of capital, corresponds closely with the trend in economic profit. Initially, the ratio was negative and declined to its lowest point in 2020, implying the company was not generating sufficient returns to cover its cost of capital. From 2021 onwards, the ratio improved markedly, surpassing zero and reaching progressively higher positive levels through 2024, indicating enhanced profitability and value creation.

Economic Profit

Negative in the early years, with a significant turnaround in 2022, reaching increasing positive values in subsequent years, signifying improved operational profitability and value generation.

Invested Capital

Maintained a relatively stable base with slight variations, overall showing a gradual increase which suggests measured growth in capital employed by the company.

Economic Spread Ratio

Shifted from negative values, reaching a low point in 2020, to positive and increasing figures from 2021 to 2024, indicating that returns on investment have grown to exceed the cost of capital, enhancing shareholder value.

Revenue Trends

Revenue has demonstrated a consistent upward trend over the analyzed periods. Starting from approximately 6.89 billion in 2019, revenue increased steadily each year, reaching nearly 9.60 billion by 2024. This reflects a strong growth trajectory with no observed declines across the periods.

Economic Profit Analysis

Economic profit showed notable fluctuations throughout the years. Initially, economic profit was negative, reaching -44.8 million in 2019 and worsening to -97.0 million in 2020. A significant turnaround occurred in 2021, where economic profit moved close to break-even at -1.8 million. The following years witnessed substantial improvements, with economic profit becoming positive and growing to 255.5 million in 2022, 298.2 million in 2023, and further rising to 376.7 million in 2024.

Economic Profit Margin Insights

The economic profit margin mirrored the economic profit trend, starting at a negative margin of -0.65% in 2019 and declining further to -1.37% in 2020. A recovery phase was observed in 2021 with the margin improving to nearly zero at -0.03%. From 2022 onward, the margin turned positive and expanded steadily, reaching 3.25% in 2022, 3.38% in 2023, and 3.93% by 2024. This indicates enhanced profitability relative to revenue over time.