Analysis of Long-term (Investment) Activity Ratios
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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- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Return on Assets (ROA) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
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Long-term Activity Ratios (Summary)
Cintas Corp., long-term (investment) activity ratios
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 Fixed Asset Turnover
- The net fixed asset turnover ratio demonstrated a consistent upward trend from 4.82 in May 2019 to a peak of 6.31 in May 2023, indicating improved efficiency in utilizing fixed assets to generate sales. In the latest period, it slightly decreased to 6.26 but remained significantly higher than the initial value, reflecting sustained efficient asset usage over the years.
- Net Fixed Asset Turnover Including Operating Lease, Right-of-Use Asset
- When incorporating operating leases and right-of-use assets, the turnover ratio showed a fluctuating yet overall positive trajectory. It declined from 4.82 in 2019 to 4.53 in 2020, potentially reflecting changes due to lease accounting or operational adjustments. Subsequently, it steadily increased to 5.57 by May 2024, though it consistently remained below the standard net fixed asset turnover ratio, signifying the extended asset base's impact on this metric.
- Total Asset Turnover
- Total asset turnover experienced a slight decrease from 0.93 in 2019 to 0.86 in 2021. However, it rebounded thereafter, reaching 1.05 by May 2024, its highest level in the observed periods. This pattern reveals initial challenges or investments increasing asset base that were later offset by higher sales efficiency in asset utilization.
- Equity Turnover
- The equity turnover ratio showed variability with a decrease from 2.30 in 2019 to a low of 1.93 in 2021. Following this trough, the ratio rebounded to 2.37 in 2022 but decreased slightly in subsequent years, ending at 2.22 in 2024. These fluctuations suggest changes in the company's equity base and sales generation efficiency, with the ratio indicating moderate stability in recent periods.
- Summary
- Overall, the analyzed financial turnover ratios reflect a general trend of improving efficiency in the use of fixed and total assets to generate revenue, particularly from 2021 onwards. The inclusion of operating lease assets reduces turnover ratios but shows a similar upward trend. Equity turnover reveals more volatility, with a dip around 2021 but recovery thereafter, indicating changes in equity management and revenue generation dynamics. The data points to enhanced operational efficiency balanced against evolving asset and equity structures.
Net Fixed Asset Turnover
Cintas Corp., net fixed asset turnover 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).
1 2024 Calculation
Net fixed asset turnover = Revenue ÷ Property and equipment, net
= ÷ =
- Revenue Trends
- Revenue exhibited consistent growth across the examined period, increasing from approximately $6.89 billion in 2019 to nearly $9.60 billion in 2024. The revenue growth accelerated notably during the years 2021 to 2023, with a significant jump from $7.85 billion in 2022 to $8.82 billion in 2023, indicating strong expansion during that timeframe. The upward trajectory persisted into 2024, albeit at a slightly moderated pace compared to the previous year.
- Property and Equipment, Net
- The net value of property and equipment displayed a generally decreasing trend over the early years, moving from about $1.43 billion in 2019 down to roughly $1.32 billion in 2021 and 2022. However, a reversal occurred starting in 2023, with net property and equipment rising to approximately $1.40 billion and continuing to increase to $1.53 billion in 2024. This recovery and growth phase suggest renewed investment or acquisition of fixed assets in the most recent years.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio experienced steady improvement from 4.82 in 2019 to a peak of 6.31 in 2023, reflecting enhanced efficiency in utilizing fixed assets to generate revenue. This upward movement indicates that the company was able to produce more revenue per unit of net fixed assets over time. In 2024, there was a slight decline to 6.26, implying a minor reduction in asset productivity but still maintaining a high level relative to previous years.
- Summary Insights
- The data reveal an overall positive performance characterized by strong revenue growth coupled with an initial reduction followed by renewed investment in property and equipment. The increasing net fixed asset turnover ratio throughout most of the periods analyzed indicates improved operational efficiency in asset utilization. The slight dip in turnover ratio in the most recent year, along with increasing asset base, may suggest the company is in a phase of capital expansion, which might temporarily affect asset productivity ratios. These patterns collectively demonstrate a strategic balance between growth, asset investment, and operational efficiency over the reviewed timeframe.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Cintas Corp., net fixed asset turnover (including operating lease, right-of-use asset) 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).
1 2024 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenue ÷ Property and equipment, net (including operating lease, right-of-use asset)
= ÷ =
- Revenue Trends
- Revenue demonstrates a consistent upward trend over the six-year period. Starting at 6,892,303 thousand US dollars in 2019, revenue increased each year, reaching 9,596,615 thousand US dollars by 2024. This represents a cumulative growth of approximately 39.2%, indicating steady expansion in business operations or market demand.
- Property and Equipment, Net
- The net value of property and equipment, including operating lease right-of-use assets, shows moderate fluctuation but with an overall upward trajectory. The figure rose from 1,430,685 thousand US dollars in 2019 to 1,722,121 thousand US dollars in 2024. Despite a slight dip in 2021, the asset base has generally grown, possibly reflecting ongoing investments in physical assets or lease arrangements.
- Net Fixed Asset Turnover
- Net fixed asset turnover, which measures revenue generated per unit of net fixed assets, exhibits a dynamic trend. The ratio declined from 4.82 in 2019 to 4.53 in 2020, suggesting lower efficiency or asset utilization during that year. However, the ratio subsequently improved to 5.57 by 2024, surpassing the 2019 level. This indicates enhanced utilization of fixed assets to generate revenue, which may be linked to operational improvements or better asset management.
- Overall Insights
- The data portrays a company experiencing steady revenue growth alongside increasing investment in property and equipment. Despite a temporary reduction in fixed asset turnover efficiency in 2020, the overall trend toward higher asset utilization and growing revenue suggests positive operational performance. The growth in revenue outpaces the increase in net fixed assets, which typically reflects effective resource management and expanding business scale.
Total Asset Turnover
Cintas Corp., total asset turnover 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).
1 2024 Calculation
Total asset turnover = Revenue ÷ Total assets
= ÷ =
- Revenue Trends
- Revenue exhibited a consistent upward trajectory over the six-year period, increasing from approximately 6.89 billion US dollars in 2019 to nearly 9.60 billion US dollars in 2024. The growth rate accelerated notably after 2021, with revenue rising from 7.12 billion in 2021 to 7.85 billion in 2022, then to 8.82 billion in 2023, and reaching 9.60 billion in 2024. This indicates a strengthening sales performance, possibly reflecting enhanced market demand or expanded operations.
- Total Assets
- Total assets also showed growth from 7.44 billion US dollars in 2019 to 9.17 billion US dollars in 2024. However, this growth was less linear compared to revenue, with a minor decline observed between 2021 (8.24 billion) and 2022 (8.15 billion). Following this dip, total assets resumed an upward trend through 2023 and 2024. The asset base expansion is consistent with the scaling operations but the temporary decrease in 2022 could suggest asset sales, write-downs, or reclassification.
- Total Asset Turnover
- The total asset turnover ratio, which measures the efficiency of asset use in generating revenue, declined from 0.93 in 2019 to a low of 0.86 in 2021. This decrease suggests less efficient use of assets during that period. Thereafter, asset turnover improved markedly, reaching 1.05 in 2024, denoting enhanced operational efficiency. The ratio surpassed one in the last two years, indicating that revenue growth outpaced asset growth during this interval, reflecting more productive use of company resources.
- Overall Analysis
- Over the span of six years, there is a clear trend of growing revenue alongside an increasing but more volatile asset base. Initial declines in asset turnover suggest a phase of less effective asset utilization followed by a recovery and improvement in efficiency. The improved turnover ratios in the most recent years highlight a positive operational shift, where revenue expansion is increasingly supported by better asset employment, signaling strengthened management and potential profitability improvements.
Equity Turnover
Cintas Corp., equity turnover 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).
1 2024 Calculation
Equity turnover = Revenue ÷ Shareholders’ equity
= ÷ =
- Revenue Trend
- Over the six-year period, revenue exhibited a consistent upward trend, increasing from approximately 6.89 billion US dollars in 2019 to about 9.60 billion US dollars in 2024. The growth was steady each year, with a notable acceleration after 2021, where annual increases became more pronounced, reflecting potential expansion or increased market penetration.
- Shareholders’ Equity Development
- Shareholders’ equity also showed a general increase during the period, starting at around 3.00 billion US dollars in 2019 and reaching approximately 4.32 billion US dollars by 2024. The equity value experienced fluctuations, including a decline between 2021 and 2022, where equity decreased from about 3.69 billion to 3.31 billion US dollars, before resuming growth in subsequent years. This may indicate periodic reinvestments, dividends, or other financing activities impacting equity.
- Equity Turnover Ratio Dynamics
- The equity turnover ratio, measuring how efficiently the company used its equity to generate revenue, fluctuated throughout the years. It started at 2.3 in 2019, decreased to a low of 1.93 in 2021, then rose again above 2.2 by 2024. This pattern suggests varying efficiency levels, with reduced efficiency around 2021 potentially linked to equity growth outpacing revenue during that period. The increase post-2021 indicates improved utilization of equity for revenue generation.
- Overall Insights
- The data reflects a company with solid revenue growth and increasing equity base overall, albeit with some short-term fluctuations in equity. The decreasing trend in equity turnover ratio around 2021 may highlight a phase where equity growth was not matched by proportional revenue increases, but the subsequent recovery implies a return to more effective capital use. The firm appears to be on a growth trajectory with enhanced operational efficiency in recent years.