Cintas Corporation (CTAS)

Quick ratio

		May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020
Cash	US$ in thousands	342,015	124,149	90,471	493,640	145,402
Short-term investments	US$ in thousands	—	—	—	274,616	—
Receivables	US$ in thousands	1,244,180	1,152,990	1,027,930	923,992	870,369
Total current liabilities	US$ in thousands	1,828,520	1,230,060	1,432,890	1,934,080	885,195
Quick ratio		0.87	1.04	0.78	0.87	1.15

May 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($342,015K + $—K + $1,244,180K) ÷ $1,828,520K
= 0.87

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using its most liquid assets. A quick ratio of less than 1 indicates that a company may have difficulty meeting its current liabilities with its most liquid assets alone.

Analyzing Cintas Corporation's quick ratio over the past five years, we observe fluctuations in its liquidity position. In 2024, the quick ratio stands at 0.87, showing a decrease from the previous year. This decrease may raise concerns about the company's ability to cover its short-term obligations solely using its quick assets.

Comparing the 2024 quick ratio to earlier years, we see that in 2023 and 2021, the company had quick ratios of 1.04 and 0.87, respectively, indicating relatively better liquidity positions during those periods. In 2022 and 2020, the quick ratios were 0.78 and 1.15, showing fluctuations in the company's liquidity over the years.

Overall, the trend in Cintas Corporation's quick ratio suggests some variability in its ability to cover short-term liabilities with its quick assets alone. Further analysis of the company's financial statements and cash flow trends would be beneficial to gain a deeper understanding of its liquidity position.