Cintas Corporation (CTAS)

Payables 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
Payables	US$ in thousands	339,166	302,292	251,504	230,786	230,995
Payables turnover		8.19	8.34	8.83	9.19	16.67

May 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $2,777,140K ÷ $339,166K
= 8.19

The payables turnover ratio for Cintas Corporation has been relatively stable over the past five years, ranging from 8.19 to 16.67. This ratio measures how quickly the company is able to pay off its suppliers and is calculated by dividing the cost of goods sold by the average accounts payable balance.

A decreasing trend in payables turnover, as seen from 2011 to 2013, could indicate that the company is taking longer to pay its suppliers, which may strain relationships or be a sign of financial distress. On the other hand, a high payables turnover ratio, such as in 2020, may suggest that the company is efficiently managing its payables by paying them off quickly.

Overall, a stable payables turnover ratio indicates that Cintas Corporation has been effectively managing its accounts payable, ensuring timely payments to suppliers while maintaining healthy relationships and financial stability. It is important for the company to continue monitoring and optimizing this ratio to strike a balance between cash flow management and vendor relationships.