Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.

Solvency Ratios (Summary)
Debt to Equity
Debt to Equity (including Operating Lease Liability)
Debt to Capital
Debt to Capital (including Operating Lease Liability)
Debt to Assets
Debt to Assets (including Operating Lease Liability)
Financial Leverage
Interest Coverage
Fixed Charge Coverage

Cintas Corp., solvency ratios

	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Debt Ratios
Debt to equity	0.57	0.64	0.85	0.69	0.79	0.95
Debt to equity (including operating lease liability)	0.62	0.69	0.90	0.74	0.84	0.95
Debt to capital	0.36	0.39	0.46	0.41	0.44	0.49
Debt to capital (including operating lease liability)	0.38	0.41	0.47	0.42	0.46	0.49
Debt to assets	0.27	0.29	0.34	0.31	0.33	0.38
Debt to assets (including operating lease liability)	0.29	0.31	0.36	0.33	0.35	0.38
Financial leverage	2.12	2.21	2.46	2.23	2.37	2.48
Coverage Ratios
Interest coverage	20.59	16.22	17.87	14.11	11.04	11.84
Fixed charge coverage	11.73	9.86	10.18	8.61	7.02	7.43

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).

Debt to Equity and Related Metrics: There is a clear downward trend in the debt to equity ratio over the years, declining from 0.95 in 2019 to 0.57 in 2024. Similarly, when including operating lease liabilities, the ratio decreases from 0.95 to 0.62 during the same period. This pattern indicates a gradual reduction in reliance on debt relative to equity, suggesting an improvement in the company’s financial structure and potentially lower financial risk.
Debt to Capital: The debt to capital ratio also shows a consistent decrease, moving from 0.49 in 2019 down to 0.36 in 2024. Including operating lease liabilities, the ratio declines from 0.49 to 0.38. This trend reflects a decreasing share of debt in the overall capital structure, reinforcing the overall reduction in leverage.
Debt to Assets: This ratio exhibits a steady decline, from 0.38 in 2019 to 0.27 in 2024. With operating lease liabilities factored in, the ratio moves from 0.38 to 0.29. The reduction suggests an increasing proportion of assets financed through equity rather than debt, indicating a solidification of the company’s asset base with less financial obligation.
Financial Leverage: Financial leverage has decreased over the analyzed period, from 2.48 in 2019 to 2.12 in 2024, albeit with some fluctuation between 2021 and 2022. This decreasing trend signals a moderated use of borrowed funds relative to equity, consistent with improvements seen in the other leverage ratios.
Interest Coverage: Interest coverage shows an overall increasing trend, rising from 11.84 in 2019 to 20.59 in 2024, with a peak observed in 2022. This increase indicates enhanced ability to meet interest obligations from operating earnings, reflecting strengthened profitability or lowered interest expenses.
Fixed Charge Coverage: Fixed charge coverage improves steadily from 7.43 in 2019 to 11.73 in 2024. This improvement suggests an increased capacity to cover fixed financial charges, including interest and lease payments, enhancing financial stability and reducing risk associated with fixed obligations.

Debt Ratios

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Coverage Ratios

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Cintas Corp., debt to equity calculation, comparison to benchmarks

	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Selected Financial Data (US$ in thousands)
Debt due within one year	449,595)	—)	311,574)	899,070)	—)	312,264)
Debt due after one year	2,025,934)	2,486,405)	2,483,932)	1,642,833)	2,539,705)	2,537,507)
Total debt	2,475,529)	2,486,405)	2,795,506)	2,541,903)	2,539,705)	2,849,771)

Shareholders’ equity	4,316,372)	3,863,986)	3,308,196)	3,687,847)	3,235,202)	3,002,721)
Solvency Ratio
Debt to equity¹	0.57	0.64	0.85	0.69	0.79	0.95
Benchmarks
Debt to Equity, Industry
Industrials	1.39	1.52	1.42	1.37	1.82	—

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).

¹ 2024 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 2,475,529 ÷ 4,316,372 = 0.57

Total Debt: The total debt exhibited some fluctuations over the analyzed periods. Starting at approximately 2.85 billion USD in May 2019, it slightly decreased to about 2.54 billion USD in the two subsequent years. The value increased again to nearly 2.80 billion USD in May 2022, before declining steadily to approximately 2.48 billion USD by May 2024. Overall, the trend in total debt shows relative stability with moderate variation rather than a consistent increase or decrease.
Shareholders’ Equity: Shareholders’ equity manifested a general upward trend throughout the observed timeframe. Beginning at about 3.00 billion USD in May 2019, equity values increased annually with some variation, reaching above 4.31 billion USD in May 2024. The value peaked in May 2023 at nearly 3.86 billion USD, followed by a significant rise in the following year. This growth indicates a strengthening of the company’s net asset base over the period.
Debt to Equity Ratio: The debt to equity ratio displayed a clear declining trend, moving from 0.95 in May 2019 to 0.57 by May 2024. This decrease reflects a progressive reduction in leverage, indicating the company is relying less on debt relative to its equity. The ratio experienced the lowest value in the latest period analyzed, demonstrating improved financial stability and potentially lower financial risk.

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Cintas Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks

	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Selected Financial Data (US$ in thousands)
Debt due within one year	449,595)	—)	311,574)	899,070)	—)	312,264)
Debt due after one year	2,025,934)	2,486,405)	2,483,932)	1,642,833)	2,539,705)	2,537,507)
Total debt	2,475,529)	2,486,405)	2,795,506)	2,541,903)	2,539,705)	2,849,771)
Operating lease liabilities, current	45,727)	43,710)	43,872)	43,850)	43,031)	—)
Operating lease liabilities, long-term	146,824)	138,278)	129,064)	130,774)	122,695)	—)
Total debt (including operating lease liability)	2,668,080)	2,668,393)	2,968,442)	2,716,527)	2,705,431)	2,849,771)

Shareholders’ equity	4,316,372)	3,863,986)	3,308,196)	3,687,847)	3,235,202)	3,002,721)
Solvency Ratio
Debt to equity (including operating lease liability)¹	0.62	0.69	0.90	0.74	0.84	0.95
Benchmarks
Debt to Equity (including Operating Lease Liability), Industry
Industrials	1.55	1.71	1.59	1.54	2.00	—

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).

¹ 2024 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= 2,668,080 ÷ 4,316,372 = 0.62

Total Debt (Including Operating Lease Liability): The total debt experienced fluctuations over the six-year period. It started at approximately $2.85 billion in 2019, decreased to around $2.71 billion in 2020 and 2021, then increased again to nearly $2.97 billion in 2022. Notably, the debt decreased significantly in the last two years, reaching approximately $2.67 billion in 2023 and maintaining a similar level in 2024.
Shareholders’ Equity: Shareholders’ equity exhibited an overall upward trend. It began at about $3.00 billion in 2019, increased steadily with a slight dip in 2022 where it reached approximately $3.31 billion, and then continued rising to peak at roughly $4.32 billion in 2024. This reflects a strengthening equity base over the observed period despite some volatility.
Debt to Equity Ratio (Including Operating Lease Liability): The debt to equity ratio decreased consistently during the timeframe, starting at 0.95 in 2019 and declining to 0.62 in 2024. This indicates an improvement in the company's capital structure, with a decreasing reliance on debt relative to equity. The ratio shows a dip in 2021 reaching 0.74, followed by a temporary increase in 2022 before continuing its downward trend in the subsequent years.

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Cintas Corp., debt to capital calculation, comparison to benchmarks

	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Selected Financial Data (US$ in thousands)
Debt due within one year	449,595)	—)	311,574)	899,070)	—)	312,264)
Debt due after one year	2,025,934)	2,486,405)	2,483,932)	1,642,833)	2,539,705)	2,537,507)
Total debt	2,475,529)	2,486,405)	2,795,506)	2,541,903)	2,539,705)	2,849,771)
Shareholders’ equity	4,316,372)	3,863,986)	3,308,196)	3,687,847)	3,235,202)	3,002,721)
Total capital	6,791,901)	6,350,391)	6,103,702)	6,229,750)	5,774,907)	5,852,492)
Solvency Ratio
Debt to capital¹	0.36	0.39	0.46	0.41	0.44	0.49
Benchmarks
Debt to Capital, Industry
Industrials	0.58	0.60	0.59	0.58	0.65	—

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).

¹ 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= 2,475,529 ÷ 6,791,901 = 0.36

Total Debt: The total debt exhibited a fluctuating but generally declining trend over the analyzed period. It decreased from approximately $2.85 billion in May 2019 to about $2.48 billion in May 2024, with some variations observed in intermediate years. Notably, total debt decreased sharply from 2019 to 2020, remained relatively stable through 2021, increased again in 2022, and then steadily declined through 2023 and 2024.
Total Capital: Total capital showed a relatively stable pattern with a slight upward trend overall. Starting at $5.85 billion in 2019, it experienced minor fluctuations but generally increased, reaching approximately $6.79 billion by 2024. The largest increments appeared between 2022 and 2024, indicating potential growth in the company’s capital base during those years.
Debt to Capital Ratio: The debt to capital ratio consistently decreased over the observed period, indicating an improvement in the company’s leverage position. The ratio fell from 0.49 in 2019 to 0.36 in 2024. This decline suggests a reduced reliance on debt financing relative to the company’s overall capital, reflecting a strengthening balance sheet and potentially lower financial risk.

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Cintas Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks

	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Selected Financial Data (US$ in thousands)
Debt due within one year	449,595)	—)	311,574)	899,070)	—)	312,264)
Debt due after one year	2,025,934)	2,486,405)	2,483,932)	1,642,833)	2,539,705)	2,537,507)
Total debt	2,475,529)	2,486,405)	2,795,506)	2,541,903)	2,539,705)	2,849,771)
Operating lease liabilities, current	45,727)	43,710)	43,872)	43,850)	43,031)	—)
Operating lease liabilities, long-term	146,824)	138,278)	129,064)	130,774)	122,695)	—)
Total debt (including operating lease liability)	2,668,080)	2,668,393)	2,968,442)	2,716,527)	2,705,431)	2,849,771)
Shareholders’ equity	4,316,372)	3,863,986)	3,308,196)	3,687,847)	3,235,202)	3,002,721)
Total capital (including operating lease liability)	6,984,452)	6,532,379)	6,276,638)	6,404,374)	5,940,633)	5,852,492)
Solvency Ratio
Debt to capital (including operating lease liability)¹	0.38	0.41	0.47	0.42	0.46	0.49
Benchmarks
Debt to Capital (including Operating Lease Liability), Industry
Industrials	0.61	0.63	0.61	0.61	0.67	—

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).

¹ 2024 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 2,668,080 ÷ 6,984,452 = 0.38

Total Debt (Including Operating Lease Liability): The total debt level shows a fluctuating pattern during the examined periods. Initially, debt decreased from approximately 2.85 billion USD in May 2019 to about 2.71 billion USD in May 2021, indicating some debt repayment or refinancing activity. However, there was a noticeable increase in May 2022 to nearly 2.97 billion USD. Following that peak, debt declined again in the last two periods, settling at approximately 2.67 billion USD by May 2024. Overall, the debt position appears relatively stable with moderate fluctuations over the six-year span.
Total Capital (Including Operating Lease Liability): Total capital demonstrates a generally upward trajectory over the period analyzed. Starting at roughly 5.85 billion USD in May 2019, capital increased steadily, reaching about 6.40 billion USD in May 2021. Despite a slight dip in May 2022 to around 6.28 billion USD, the capital base resumed its growth to culminate at approximately 6.98 billion USD by May 2024. This upward trend in total capital reflects an expansion of the overall capital structure, potentially driven by equity growth or retained earnings accumulation.
Debt to Capital Ratio (Including Operating Lease Liability): The debt to capital ratio exhibits a consistent downward trend, indicating an improvement in the company’s leverage position. The ratio decreased from 0.49 in May 2019 to 0.38 in May 2024. Key movements include a decrease to 0.42 in May 2021, a slight increase to 0.47 in May 2022, followed by a notable decline in the subsequent two years. The declining ratio suggests that the company is increasingly financing its capital structure through means other than debt, which may include equity financing or earnings retention, thereby reducing financial risk.

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Cintas Corp., debt to assets calculation, comparison to benchmarks

	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Selected Financial Data (US$ in thousands)
Debt due within one year	449,595)	—)	311,574)	899,070)	—)	312,264)
Debt due after one year	2,025,934)	2,486,405)	2,483,932)	1,642,833)	2,539,705)	2,537,507)
Total debt	2,475,529)	2,486,405)	2,795,506)	2,541,903)	2,539,705)	2,849,771)

Total assets	9,168,817)	8,546,356)	8,147,256)	8,236,823)	7,669,885)	7,436,662)
Solvency Ratio
Debt to assets¹	0.27	0.29	0.34	0.31	0.33	0.38
Benchmarks
Debt to Assets, Industry
Industrials	0.31	0.31	0.31	0.30	0.33	—

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).

¹ 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= 2,475,529 ÷ 9,168,817 = 0.27

The financial data reveals several trends regarding the company's leverage and asset base over the six-year period.

Total debt: The total debt has fluctuated modestly during the period, starting at approximately $2.85 billion in 2019 and declining to about $2.48 billion by 2024. Notably, debt dipped in 2020 and 2021, increased somewhat in 2022, then experienced a steady decrease through 2023 and 2024.
Total assets: The total assets exhibited a consistent upward trajectory from about $7.44 billion in 2019 to approximately $9.17 billion in 2024. This growth reflects a steady increase in the company’s asset base throughout the years, with a minor decline in 2022 relative to 2021 before rising again in subsequent years.
Debt to assets ratio: The debt to assets ratio shows a clear declining trend, moving from 0.38 in 2019 down to 0.27 by 2024. This indicates a gradual reduction in leverage relative to the asset base, suggesting improved solvency or more conservative debt management over the period.

Overall, the data points to a company that has expanded its asset base steadily while managing to reduce its relative indebtedness. The decline in the debt to assets ratio reinforces a trend toward lower financial risk and potentially stronger balance sheet health over the evaluated timeframe.

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Cintas Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks

	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Selected Financial Data (US$ in thousands)
Debt due within one year	449,595)	—)	311,574)	899,070)	—)	312,264)
Debt due after one year	2,025,934)	2,486,405)	2,483,932)	1,642,833)	2,539,705)	2,537,507)
Total debt	2,475,529)	2,486,405)	2,795,506)	2,541,903)	2,539,705)	2,849,771)
Operating lease liabilities, current	45,727)	43,710)	43,872)	43,850)	43,031)	—)
Operating lease liabilities, long-term	146,824)	138,278)	129,064)	130,774)	122,695)	—)
Total debt (including operating lease liability)	2,668,080)	2,668,393)	2,968,442)	2,716,527)	2,705,431)	2,849,771)

Total assets	9,168,817)	8,546,356)	8,147,256)	8,236,823)	7,669,885)	7,436,662)
Solvency Ratio
Debt to assets (including operating lease liability)¹	0.29	0.31	0.36	0.33	0.35	0.38
Benchmarks
Debt to Assets (including Operating Lease Liability), Industry
Industrials	0.35	0.35	0.34	0.34	0.36	—

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).

¹ 2024 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 2,668,080 ÷ 9,168,817 = 0.29

The financial data exhibits notable trends in the company's leverage and asset growth over the six-year period under review.

Total Debt (Including Operating Lease Liability): The total debt level remained relatively stable from May 2019 through May 2024, with minor fluctuations. Starting at approximately 2.85 billion USD in 2019, the debt slightly decreased in 2020 to about 2.71 billion USD, then stayed near this level until 2022 when it peaked around 2.97 billion USD. Subsequently, it declined again, reaching approximately 2.67 billion USD by May 2024. This pattern indicates that the company maintained a fairly consistent debt position, with a modest reduction in recent years.
Total Assets: Total assets showed a consistent upward trajectory throughout the period. Beginning at approximately 7.44 billion USD in 2019, assets increased each year except for a slight dip in 2022, ultimately reaching nearly 9.17 billion USD by 2024. This exponential growth demonstrates continued expansion of the company's asset base, supporting potential growth, operational scalability, or capital investments.
Debt to Assets Ratio (Including Operating Lease Liability): The debt to assets ratio declined steadily from 0.38 in 2019 to 0.29 in 2024. This decreasing ratio suggests an improving capital structure characterized by a lower proportion of debt relative to total assets. The trend implies enhanced financial stability and lower financial risk, as the company has been either reducing debt or increasing assets at a faster rate, or both.

In summary, the company has demonstrated growth in total assets alongside a stable and slightly declining total debt level. The resultant decrease in the debt to assets ratio highlights an improved leverage position, indicating a potentially more conservative and robust financial posture over time.

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Cintas Corp., financial leverage calculation, comparison to benchmarks

	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Selected Financial Data (US$ in thousands)
Total assets	9,168,817)	8,546,356)	8,147,256)	8,236,823)	7,669,885)	7,436,662)
Shareholders’ equity	4,316,372)	3,863,986)	3,308,196)	3,687,847)	3,235,202)	3,002,721)
Solvency Ratio
Financial leverage¹	2.12	2.21	2.46	2.23	2.37	2.48
Benchmarks
Financial Leverage, Industry
Industrials	4.49	4.94	4.65	4.52	5.49	—

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).

¹ 2024 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 9,168,817 ÷ 4,316,372 = 2.12

Total Assets: Total assets showed a consistent upward trend over the six-year period, increasing from approximately $7.44 billion in 2019 to $9.17 billion in 2024. This represents a steady growth trajectory, with a slight dip observed in 2022 before resuming its rise in subsequent years. The growth indicates a continuous expansion of the company's asset base over time.
Shareholders’ Equity: Shareholders’ equity generally increased from $3.00 billion in 2019 to $4.32 billion in 2024, reflecting strengthening net assets available to shareholders. However, there was a noticeable decline in 2022, where equity fell from $3.69 billion in 2021 to approximately $3.31 billion. This dip suggests a temporary reduction in retained earnings or other equity components during that year. The recovery and subsequent increase through 2023 and 2024 signal a rebound and enhanced financial position.
Financial Leverage: Financial leverage, measured as a ratio of total assets to shareholders’ equity, showed an overall decreasing trend, moving from 2.48 in 2019 to 2.12 in 2024. This indicates a progressive reduction in reliance on debt financing relative to equity. The year 2022 experienced a spike to 2.46, coinciding with the dip in equity, which suggests increased leverage or borrowing at that time. Post-2022, leverage resumed its downward path, reflecting a more conservative capital structure and possibly improved debt management.

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Cintas Corp., interest coverage calculation, comparison to benchmarks

	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Selected Financial Data (US$ in thousands)
Net income	1,571,592)	1,348,010)	1,235,757)	1,110,968)	876,037)	884,981)
Less: Income (loss) from discontinued operations, net of tax	—)	—)	—)	—)	(323)	2,346)
Add: Income tax expense	402,043)	345,138)	263,011)	176,781)	181,931)	219,764)
Add: Interest expense	100,740)	111,232)	88,844)	98,210)	105,393)	101,736)
Earnings before interest and tax (EBIT)	2,074,375)	1,804,380)	1,587,612)	1,385,959)	1,163,684)	1,204,135)
Solvency Ratio
Interest coverage¹	20.59	16.22	17.87	14.11	11.04	11.84
Benchmarks
Interest Coverage, Industry
Industrials	5.79	6.64	4.98	5.14	1.25	—

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).

¹ 2024 Calculation
Interest coverage = EBIT ÷ Interest expense
= 2,074,375 ÷ 100,740 = 20.59

Earnings before interest and tax (EBIT): The EBIT exhibited a consistent upward trend over the analyzed period, increasing from approximately 1.20 billion in 2019 to over 2.07 billion by 2024. The growth was steady year-over-year, with notable acceleration particularly between 2021 and 2024, indicating strong operational performance and expansion.
Interest expense: Interest expense showed minor fluctuations during the period, starting at about 101.7 million in 2019, peaking slightly in 2020 and 2023 with values exceeding 105 million and 111 million respectively, but generally remaining near the 100 million range. The expense displayed no clear directional trend, instead exhibiting moderate variability year to year.
Interest coverage ratio: The interest coverage ratio demonstrated a generally improving trend, increasing from 11.84 in 2019 to a high of 20.59 by 2024. This indicates enhanced ability to service interest obligations, reflecting the strong growth in EBIT relative to relatively stable interest expenses. The ratio peaked notably in 2022 and further improved through 2024, suggesting increasing financial strength and lower leverage risk over time.

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Cintas Corp., fixed charge coverage calculation, comparison to benchmarks

	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Selected Financial Data (US$ in thousands)
Net income	1,571,592)	1,348,010)	1,235,757)	1,110,968)	876,037)	884,981)
Less: Income (loss) from discontinued operations, net of tax	—)	—)	—)	—)	(323)	2,346)
Add: Income tax expense	402,043)	345,138)	263,011)	176,781)	181,931)	219,764)
Add: Interest expense	100,740)	111,232)	88,844)	98,210)	105,393)	101,736)
Earnings before interest and tax (EBIT)	2,074,375)	1,804,380)	1,587,612)	1,385,959)	1,163,684)	1,204,135)
Add: Operating lease costs, including short-term lease expense and variable lease costs	83,200)	79,800)	74,500)	71,000)	70,400)	69,700)
Earnings before fixed charges and tax	2,157,575)	1,884,180)	1,662,112)	1,456,959)	1,234,084)	1,273,835)

Interest expense	100,740)	111,232)	88,844)	98,210)	105,393)	101,736)
Operating lease costs, including short-term lease expense and variable lease costs	83,200)	79,800)	74,500)	71,000)	70,400)	69,700)
Fixed charges	183,940)	191,032)	163,344)	169,210)	175,793)	171,436)
Solvency Ratio
Fixed charge coverage¹	11.73	9.86	10.18	8.61	7.02	7.43
Benchmarks
Fixed Charge Coverage, Industry
Industrials	3.96	4.32	3.30	3.44	1.12	—

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).

¹ 2024 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 2,157,575 ÷ 183,940 = 11.73

Earnings before Fixed Charges and Tax: The earnings before fixed charges and tax show a generally increasing trend over the six-year period. Starting at 1,273,835 thousand US dollars in 2019, the amount experienced a slight decline in 2020 to 1,234,084 thousand US dollars. From 2020 onwards, the figure increased consistently each year, reaching 2,157,575 thousand US dollars by 2024. This indicates growth in operational profitability over the analyzed timeframe.
Fixed Charges: Fixed charges have fluctuated moderately between 2019 and 2024. Beginning at 171,436 thousand US dollars in 2019, fixed charges rose slightly to 175,793 thousand US dollars in 2020 before decreasing to 163,344 thousand US dollars by 2022. A significant increase was observed in 2023, reaching 191,032 thousand US dollars, followed by a small reduction to 183,940 thousand US dollars in 2024. Despite this variability, fixed charges remained within a range that appears manageable relative to earnings.
Fixed Charge Coverage Ratio: The fixed charge coverage ratio, measuring the ability to cover fixed charges with earnings before fixed charges and tax, showed strong improvement throughout the period. Beginning at 7.43 in 2019, it dipped slightly to 7.02 in 2020 but increased markedly thereafter, peaking at 11.73 in 2024. This rising ratio suggests enhanced capacity to meet fixed financial obligations from operating earnings, reflecting improved financial stability and operational efficiency.

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Cintas Corp. (NASDAQ:CTAS)

Analysis of Solvency Ratios

Solvency Ratios (Summary)

Debt Ratios

Coverage Ratios

Debt to Equity

Debt to Equity (including Operating Lease Liability)

Debt to Capital

Debt to Capital (including Operating Lease Liability)

Debt to Assets

Debt to Assets (including Operating Lease Liability)

Financial Leverage

Interest Coverage

Fixed Charge Coverage