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).

An analysis of the solvency ratios from May 31, 2019, to May 31, 2024, reveals a consistent strengthening of the financial position, characterized by a systemic reduction in leverage and a significant increase in debt-servicing capacity.

Debt Leverage Ratios: A sustained downward trend is observed across all primary leverage metrics. The debt-to-equity ratio declined from 0.95 in 2019 to 0.57 in 2024, while the debt-to-assets ratio decreased from 0.38 to 0.27 over the same period. Similar trajectories are evident when including operating lease liabilities, with the debt-to-equity (including leases) ratio moving from 0.95 to 0.62. A temporary increase in leverage occurred in 2022 across all these metrics, followed by a return to the downward trajectory in 2023 and 2024.
Capital Structure and Financial Leverage: The debt-to-capital ratio improved from 0.49 in 2019 to 0.36 in 2024, indicating a shift toward a more equity-heavy capital structure. This is further supported by the financial leverage ratio, which decreased from 2.48 to 2.12. The convergence of these trends suggests a strategic reduction in the reliance on external borrowing to fund assets and operations.
Coverage Ratios: There is a marked improvement in the ability to meet fixed financial obligations. The interest coverage ratio rose from 11.84 in 2019 to 20.59 in 2024, reflecting a substantial increase in the margin of safety for interest payments. Similarly, the fixed charge coverage ratio grew from 7.43 in 2019 to 11.73 in 2024, confirming that the capacity to cover both interest and other fixed charges has strengthened considerably over the six-year period.

Overall, the data indicates a transition toward a more conservative solvency profile. The simultaneous reduction in debt ratios and the expansion of coverage ratios suggest a lowered risk of insolvency and increased financial flexibility.

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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	—	—

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

An analysis of the solvency position from May 31, 2019, to May 31, 2024, indicates a significant strengthening of the capital structure. The organization has successfully reduced its leverage, moving toward a more sustainable balance between debt and equity financing.

Debt to Equity Ratio: A clear downward trajectory is observed in the debt-to-equity ratio, which declined from 0.95 in 2019 to 0.57 in 2024. Although a temporary increase to 0.85 occurred in 2022, the ratio resumed its decline in the subsequent two years, reaching its lowest level in the analyzed period by 2024. This trend reflects an improved solvency profile and a reduced reliance on external borrowing relative to owner investment.
Total Debt Dynamics: Total debt levels exhibited a general trend of reduction, starting at approximately 2.85 billion USD in 2019 and concluding at 2.48 billion USD in 2024. A notable spike occurred in 2022, where debt rose to 2.80 billion USD, but this was effectively reversed through reductions in 2023 and 2024.
Shareholders' Equity Growth: The primary driver of the improved solvency ratio is the substantial growth in shareholders' equity, which increased from 3.00 billion USD in 2019 to 4.32 billion USD in 2024. Despite a contraction in 2022, the equity base expanded robustly in the following two fiscal years, enhancing the company's internal funding capacity and reducing the proportional weight of its total debt.

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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	—	—

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

The company exhibits a positive trajectory in its solvency position between May 2019 and May 2024. A consistent trend of reducing financial leverage is observed, as the proportion of debt relative to equity has decreased significantly over the six-year period.

Total Debt Dynamics: Total debt, including operating lease liabilities, remained relatively stable with minor fluctuations. Following a decline in 2020, debt reached a peak of approximately 2.97 billion USD in 2022 before decreasing and stabilizing at 2.67 billion USD by 2024. This suggests a managed approach to liabilities with no long-term expansion of debt obligations.
Shareholders' Equity Expansion: Equity demonstrated a strong upward trend, increasing from 3.00 billion USD in 2019 to 4.32 billion USD in 2024. Despite a moderate contraction in 2022, the overall growth indicates a substantial increase in the company's net asset base, which provides a larger cushion for creditors.
Debt to Equity Ratio Evolution: The debt-to-equity ratio shifted from 0.95 in 2019 to 0.62 in 2024. A temporary spike to 0.90 was recorded in 2022, coinciding with the period of highest debt and lowest equity within the latter half of the timeframe. The subsequent decline to 0.62 represents the lowest ratio in the analyzed period, signaling an improved solvency profile and a decreased reliance on borrowed capital to fund operations.

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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	—	—

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

The analysis of solvency indicators from May 31, 2019, to May 31, 2024, reveals a strategic reduction in leverage and a strengthening of the overall capital structure. A consistent trend toward reducing the reliance on borrowed funds relative to the total capital base is observed.

Total Debt Trends: Total debt experienced a general decline over the six-year period, falling from $2,849,771 thousand in 2019 to $2,475,529 thousand in 2024. While a notable increase occurred in 2022, reaching $2,795,506 thousand, this peak was followed by consecutive reductions in 2023 and 2024.
Total Capital Growth: The total capital base expanded from $5,852,492 thousand in 2019 to $6,791,901 thousand by May 31, 2024. This growth indicates a broadening of the financial foundation, which, when paired with the decrease in total debt, suggests an increase in the proportion of equity within the capital structure.
Debt to Capital Ratio Analysis: The debt to capital ratio demonstrates a clear downward trajectory, decreasing from 0.49 in 2019 to 0.36 in 2024. A temporary deviation is observed in 2022, where the ratio rose to 0.46, correlating with the increase in total debt for that period. The subsequent descent to 0.36 represents the lowest leverage level in the analyzed timeframe, signifying enhanced long-term solvency and a reduced financial risk profile.

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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	—	—

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

Analysis of the solvency profile from May 31, 2019, to May 31, 2024, reveals a consistent strengthening of the capital structure. There is a clear long-term trend toward deleveraging, characterized by a reduction in the proportion of debt relative to total capital.

Total Debt Dynamics: Total debt, including operating lease liabilities, remained relatively stable with a slight downward trajectory over the six-year period. After peaking at US$ 2,968,442 thousand in 2022, the balance declined to US$ 2,668,080 thousand by 2024. This represents a net decrease from the 2019 level of US$ 2,849,771 thousand, indicating a controlled approach to borrowing.
Total Capital Expansion: Total capital exhibited a steady upward trend, growing from US$ 5,852,492 thousand in 2019 to US$ 6,984,452 thousand in 2024. The continuous growth of the capital base, occurring alongside stable or decreasing debt levels, suggests a substantial increase in equity or other non-debt funding sources.
Debt to Capital Ratio Trend: The debt to capital ratio decreased from 0.49 in 2019 to 0.38 in 2024. Despite a temporary increase to 0.47 in 2022, the ratio subsequently fell to its lowest point in the analyzed period by 2024. This contraction signifies a reduced reliance on leveraged financing and an improved solvency position, which enhances overall financial flexibility and reduces long-term 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	—	—

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 trajectory from May 31, 2019, to May 31, 2024, reflects a consistent strengthening of the solvency position, characterized by a strategic expansion of the asset base and a general reduction in total debt obligations.

Asset Growth Trend: Total assets exhibited a sustained upward trend over the six-year period, rising from US$ 7,436,662 thousand in 2019 to US$ 9,168,817 thousand in 2024. While a slight contraction occurred in 2022, the overall trajectory indicates a consistent increase in the company's resource base.
Debt Obligations Performance: Total debt levels fluctuated but ultimately declined from a peak of US$ 2,849,771 thousand in 2019 to US$ 2,475,529 thousand in 2024. Despite a temporary increase in 2022 to US$ 2,795,506 thousand, the subsequent reductions in 2023 and 2024 suggest a focused effort to decrease total liabilities.
Debt to Assets Ratio Interpretation: The debt to assets ratio demonstrates a clear downward trend, decreasing from 0.38 in 2019 to 0.27 in 2024. This decline indicates a systematic reduction in financial leverage, meaning a smaller proportion of assets is financed through debt. The transition from a ratio of 0.38 to 0.27 suggests an improved solvency profile and a reduction in long-term financial risk.

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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	—	—

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 position of the organization indicates a strengthening solvency profile between May 31, 2019, and May 31, 2024. This improvement is characterized by a consistent expansion of the asset base paired with a disciplined management of total debt, including operating lease liabilities.

Total Asset Expansion: Total assets demonstrated a sustained upward trajectory, growing from 7,436,662 thousand US dollars in 2019 to 9,168,817 thousand US dollars in 2024. With the exception of a minor decrease in 2022, the asset base expanded steadily, providing a larger cushion for obligations.
Debt Stability and Management: Total debt, including operating lease liabilities, remained relatively stable over the analyzed period. After a peak of 2,968,442 thousand US dollars in 2022, liabilities were reduced to 2,668,080 thousand US dollars by May 31, 2024. This represents a net reduction in total debt compared to the 2019 level of 2,849,771 thousand US dollars.
Debt to Assets Ratio Trend: A clear downward trend is observed in the debt to assets ratio, which declined from 0.38 in 2019 to 0.29 in 2024. Despite a brief increase to 0.36 in 2022, the ratio reached its lowest point in the final year of the sequence, indicating a reduction in financial leverage and an improved capacity to cover total debt with available assets.

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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	—	—

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

An evaluation of the solvency position from May 31, 2019, to May 31, 2024, reveals a consistent trend toward reduced financial risk and a strengthened equity base. Total assets and shareholders' equity have both experienced overall growth, although the growth rate of equity has outpaced that of assets over the long term, resulting in a general contraction of financial leverage.

Total Asset Expansion: Total assets exhibited a steady upward trajectory, increasing from 7,436,662 thousand US$ in 2019 to 9,168,817 thousand US$ in 2024. This represents a consistent expansion of the resource base, with only a marginal decrease observed between 2021 and 2022.
Shareholders' Equity Dynamics: Equity increased from 3,002,721 thousand US$ in 2019 to 4,316,372 thousand US$ in 2024. While the overall trend is positive, a significant contraction occurred in 2022, where equity fell to 3,308,196 thousand US$ from 3,687,847 thousand US$ in the prior year. This was followed by a robust recovery and accelerated growth through 2024.
Financial Leverage Trend: The financial leverage ratio demonstrates a general downward trend, declining from 2.48 in 2019 to 2.12 in 2024. A temporary spike to 2.46 was recorded in 2022, directly correlating with the decline in shareholders' equity during that period. The subsequent decline to 2.12 indicates a strategic shift toward a less leveraged capital structure, reducing the company's reliance on debt relative to equity and improving overall solvency.

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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	—	—

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

The solvency profile demonstrates a substantial strengthening of the capacity to meet interest obligations over the six-year period ending May 31, 2024. This improvement is primarily driven by robust growth in operating earnings while interest costs remained relatively contained.

Earnings Before Interest and Tax (EBIT): A consistent upward trajectory in EBIT is observed following a marginal decline in 2020. Earnings grew from US$ 1,163,684 thousand in 2020 to US$ 2,074,375 thousand in 2024, representing a significant expansion in core operational profitability.
Interest Expense: Interest expenses exhibited stability throughout the analyzed period, fluctuating within a narrow range. Despite a peak of US$ 111,232 thousand in 2023, the expense for 2024 returned to US$ 100,740 thousand, suggesting that debt costs have not scaled proportionally with the increase in EBIT.
Interest Coverage Ratio: The interest coverage ratio reflects a marked improvement in solvency. After a low of 11.04 in 2020, the ratio climbed to 20.59 by May 31, 2024. This progression indicates that operating profit now covers interest obligations more than twenty times over, significantly reducing financial risk and enhancing the margin of safety for creditors.

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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	—	—

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

An analysis of the solvency position reveals a consistent strengthening of the ability to meet fixed obligations over the six-year period ending May 31, 2024. The primary driver of this improvement is the substantial growth in earnings relative to the stability of fixed costs.

Earnings Before Fixed Charges and Tax: A strong upward trajectory is observed in operational earnings. After a marginal decline between 2019 and 2020, earnings grew from US$1,234,084 thousand to US$2,157,575 thousand by 2024. This represents a significant expansion in the capital available to service fixed obligations.
Fixed Charges: Fixed charges remained relatively stable throughout the analyzed period, fluctuating within a narrow range between US$163,344 thousand and US$191,032 thousand. The lack of significant growth in these charges, despite the increase in earnings, indicates effective cost management or a stable debt structure.
Fixed Charge Coverage Ratio: The coverage ratio exhibits an overall positive trend, increasing from 7.43 in 2019 to a peak of 11.73 in 2024. While a slight dip occurred in 2020 (7.02) and 2023 (9.86), the general progression indicates a decreasing risk profile and an enhanced margin of safety for creditors.

The divergence between rapidly increasing earnings and stagnant fixed charges has resulted in a markedly improved solvency profile. By May 31, 2024, the capacity to cover fixed charges had expanded to its highest level in the reported period, reflecting robust financial health 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