Cintas Corporation (CTAS)

Cash conversion cycle

		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
Days of inventory on hand (DOH)	days	31.61	29.99	28.29	28.89	29.99	33.67	115.15	117.91	119.39	122.08	122.27	119.34	120.06	122.72	123.11	123.41	124.04	128.01	127.03	119.23
Days of sales outstanding (DSO)	days	50.03	50.32	50.72	48.40	47.32	48.95	50.58	48.60	47.74	48.18	50.09	48.65	47.77	51.32	52.28	47.15	47.39	52.23	50.91	45.04
Number of days of payables	days	34.27	29.11	29.99	28.67	24.80	22.98	24.14	24.42	23.77	22.47	25.33	24.44	21.74	21.08	22.06	19.12	22.16	23.23	26.63	24.19
Cash conversion cycle	days	47.37	51.20	49.03	48.63	52.51	59.65	141.59	142.10	143.36	147.80	147.03	143.55	146.09	152.95	153.33	151.44	149.27	157.01	151.31	140.09

May 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 31.61 + 50.03 – 34.27
= 47.37

The cash conversion cycle (CCC) of Cintas Corporation has demonstrated notable variation over the analyzed period. From August 31, 2020, through August 31, 2023, the CCC fluctuated within a relatively stable range, approximately between 140 to 157 days. During this period, the cycle showed minor increases and decreases, indicating consistent operational efficiency in managing receivables, inventory, and payables.

However, starting from November 30, 2023, there was a dramatic decline in the CCC, dropping from approximately 141.59 days to 59.65 days by February 29, 2024. This substantial reduction represents a more than 50% decrease within just three months. The trend of shortening the cycle persisted into the subsequent periods, with the CCC reaching as low as 48.63 days by August 31, 2024. The figures indicate a significant enhancement in the company's cash conversion efficiency, possibly driven by improvements in receivables collection, inventory management, or payables terms.

In the most recent data, the CCC has remained relatively stable within the low 50s days, fluctuating slightly around the 47 to 52-day mark through May 31, 2025. This sustained reduction and stability suggest a strategic shift or operational improvements aimed at optimizing working capital management, thus converting cash more rapidly compared to earlier periods.

Overall, the trend highlights a marked and sustained decrease in the cash conversion cycle, reflecting increased operational efficiency and potentially indicative of strategic initiatives to tighten receivables collection, optimize inventory turnover, or extend payables, thereby improving liquidity and reducing working capital requirements.