Cintas Corporation (CTAS)

Inventory turnover

		May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019
Cost of revenue (ttm)	US$ in thousands	2,777,144	2,724,308	2,642,279	2,575,827	2,520,704	2,471,483	2,375,013	2,301,013	2,221,776	2,201,735	2,191,834	2,153,433	2,119,873	2,444,419	2,912,024	3,400,970	3,851,372	3,909,773	3,850,697	3,802,449
Inventory	US$ in thousands	410,201	451,215	474,840	498,354	506,604	531,270	514,839	473,888	472,150	486,750	464,864	463,692	481,797	533,211	534,128	488,165	408,898	352,924	348,304	336,290
Inventory turnover		6.77	6.04	5.56	5.17	4.98	4.65	4.61	4.86	4.71	4.52	4.72	4.64	4.40	4.58	5.45	6.97	9.42	11.08	11.06	11.31

May 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $2,777,144K ÷ $410,201K
= 6.77

The inventory turnover of Cintas Corporation has shown a fluctuating trend over the past few periods. The inventory turnover ratio measures how efficiently a company manages its inventory by indicating how many times during a particular period the company sells and replaces its inventory.

From November 2019 to May 2020, the inventory turnover ratio of Cintas showed a decreasing trend, declining from 11.06 to 4.58. This significant decrease could indicate either a build-up of excess inventory or a slowdown in sales during this period.

However, from May 2020 to November 2020, there was a notable increase in the inventory turnover ratio, rising from 4.58 to 5.45. This improvement suggests that Cintas was able to manage and sell its inventory more efficiently during this period compared to the previous one.

Subsequently, from November 2020 to May 2022, the inventory turnover ratio consistently ranged between 4.40 and 4.86, indicating a relatively stable performance in managing inventory turnover during this period.

In the most recent periods, from May 2022 to May 2024, the inventory turnover ratio has been gradually increasing, reaching a peak of 6.77 in May 2024. This upward trend suggests that Cintas has been managing its inventory more efficiently and effectively over these recent periods.

Overall, it is essential for Cintas to continue monitoring and managing its inventory turnover to ensure optimal efficiency in its operations and to maintain a healthy balance between holding enough inventory to meet demand and avoiding excess inventory that could tie up capital.