Cintas Corporation (CTAS)

Cash conversion cycle

		May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020
Days of inventory on hand (DOH)	days	53.91	73.36	77.57	82.96	38.75
Days of sales outstanding (DSO)	days	47.32	48.34	48.24	47.90	44.84
Number of days of payables	days	44.58	43.77	41.32	39.74	21.89
Cash conversion cycle	days	56.66	77.92	84.49	91.12	61.70

May 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 53.91 + 47.32 – 44.58
= 56.66

The cash conversion cycle of Cintas Corporation has shown fluctuations over the past five years. In May 2024, the company's cash conversion cycle decreased to 56.66 days compared to 77.92 days in May 2023, indicating an improvement in the company's ability to convert its investments in inventory and accounts receivable into cash. This suggests that Cintas is managing its working capital more efficiently in the most recent period.

Looking back further, the trend shows that the cash conversion cycle was 84.49 days in May 2022 and 91.12 days in May 2021, indicating a gradual deterioration in the company's working capital management during those years. However, there was a significant improvement in May 2020 when the cash conversion cycle was 61.70 days, suggesting that the company performed better in managing its cash flow and working capital during that period.

Overall, Cintas Corporation's recent decrease in the cash conversion cycle is a positive sign, indicating improved efficiency in managing working capital. Monitoring this metric over time can provide insights into the company's operational and financial health.