Cintas Corporation (CTAS)

Inventory turnover

		May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020
Cost of revenue	US$ in thousands	2,777,140	2,520,700	2,221,780	2,119,770	3,851,370
Inventory	US$ in thousands	410,201	506,604	472,150	481,797	408,898
Inventory turnover		6.77	4.98	4.71	4.40	9.42

May 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $2,777,140K ÷ $410,201K
= 6.77

The inventory turnover ratio for Cintas Corporation has shown fluctuation over the past five years. In 2020, the company achieved a high inventory turnover ratio of 9.42, indicating that inventory was sold and replaced nearly ten times during that fiscal year. However, this ratio declined in subsequent years, reaching its lowest point in 2021 with a ratio of 4.40.

Since 2021, there has been a gradual increase in the inventory turnover ratio, reaching 6.77 in 2024. This improvement suggests that Cintas has been more efficient in managing its inventory and turning it into sales. A higher inventory turnover ratio generally indicates that a company is selling goods at a faster rate relative to its inventory levels.

Overall, the upward trend in the inventory turnover ratio for Cintas Corporation from 2021 to 2024 reflects potential improvements in the company's inventory management practices and efficiency in converting inventory into sales. However, it is important to continue monitoring this ratio to ensure that the company maintains optimal inventory levels and turnover rates.