Cintas Corporation (CTAS)

Inventory turnover

		May 31, 2025	Feb 28, 2025	Nov 30, 2024	Aug 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	5,166,020	5,121,550	5,090,630	5,041,180	4,992,480	4,890,980	4,788,040	4,704,820	4,642,400	4,575,200	4,481,630	4,366,360	4,222,214	4,070,335	3,975,485	3,875,509	3,801,689	3,736,842	3,755,555	3,809,749
Inventory	US$ in thousands	447,408	420,826	394,605	399,078	410,201	451,215	1,510,560	1,519,870	1,518,520	1,530,300	1,501,340	1,427,600	1,388,860	1,368,480	1,340,930	1,310,350	1,291,900	1,310,580	1,307,060	1,244,530
Inventory turnover		11.55	12.17	12.90	12.63	12.17	10.84	3.17	3.10	3.06	2.99	2.99	3.06	3.04	2.97	2.96	2.96	2.94	2.85	2.87	3.06

May 31, 2025 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $5,166,020K ÷ $447,408K
= 11.55

The analysis of Cintas Corporation's inventory turnover ratio over the period from August 31, 2020, through May 31, 2025, reveals a general upward trend, with some notable fluctuations.

Between August 2020 and August 2022, the inventory turnover rate remained relatively stable, oscillating within a narrow range from approximately 2.85 to 3.06. This stability suggests consistent inventory management and sales efficiency during this period, with the company effectively converting inventory into sales at a steady pace.

Starting from November 2022, the ratio consistently increased, reaching approximately 3.17 by November 2023. This upward movement indicates improved inventory turnover, implying that Cintas has been more effectively managing its inventory levels relative to sales, likely resulting in faster stock replenishment and a more efficient supply chain.

However, a dramatic and anomalous increase is observed in the data for February 29, 2024, where the ratio spiked to 10.84, followed by further elevation to around 12.17 in May 2024 and subsequent months. These extraordinary values deviate sharply from prior figures and may be attributed to data anomalies, accounting adjustments, or extraordinary operational circumstances rather than a normal business cycle.

Subsequently, the ratios stabilize at elevated levels, consistently exceeding 12. with readings of approximately 12.63 for August 2024, 12.90 for November 2024, and 12.17 for February 2025, then gradually declining to 11.55 in May 2025. The sustained high levels, post-anomaly, suggest an extremely rapid turnover of inventory, possibly reflecting significant operational efficiencies, changes in inventory valuation, or extraordinary inventory management practices.

In summary, the historical progression indicates a steady, moderate inventory turnover in the pre-2023 period, with a marked and unprecedented increase starting in early 2024. The latter figures imply an exceptionally high rate of inventory conversion relative to sales, which warrants further investigation into the underlying causes, including potential accounting adjustments or operational shifts.