Cintas Corporation (CTAS)

Return on total capital

		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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,768,945	2,322,194	2,232,723	2,143,683	2,081,473	1,999,866	1,923,284	1,866,212	1,804,380	1,737,248	1,697,724	1,633,730	1,588,219	1,540,253	1,459,090	1,430,817	1,385,792	1,236,878	1,224,810	1,206,151
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	4,684,480	4,592,250	4,293,110	4,021,420	4,316,370	4,234,080	3,994,480	4,077,640	3,863,990	3,633,260	3,430,540	3,229,630	3,308,200	3,293,900	3,563,130	3,309,200	3,687,850	3,816,510	3,597,960	3,604,800
Return on total capital		37.76%	50.57%	52.01%	53.31%	48.22%	47.23%	48.15%	45.77%	46.70%	47.82%	49.49%	50.59%	48.01%	46.76%	40.95%	43.24%	37.58%	32.41%	34.04%	33.46%

May 31, 2025 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,768,945K ÷ ($—K + $4,684,480K)
= 37.76%

The analysis of Cintas Corporation's return on total capital (ROTC) over the period analyzed reveals notable fluctuations and an overall upward trend from August 2020 to mid-2024, followed by some decline and stabilization in later periods.

Initially, the ROTC stood at 33.46% as of August 31, 2020, indicating a solid efficiency in generating returns on total capital employed. Throughout 2020 and into early 2021, the ratio experienced modest increases, reaching 34.04% by November 2020 and slightly decreasing to 32.41% in February 2021. The first half of 2021 demonstrated a marked improvement, with the ratio rising significantly to 37.58% by May 31, 2021, and further accelerating to 43.24% by August 31, 2021.

This upward momentum continued into late 2021, with the ratio reaching 40.95% as of November 30, 2021, and surpassing 46.76% by February 28, 2022. The positive trend persisted into 2022, with the ratio increasing steadily to 48.01% in May 2022 and 50.59% in August 2022, before slight decreases to 49.49% in November 2022 and 47.82% in February 2023. A marginal decline continued into 2023, with the ratio at 46.70% in May 2023 and 45.77% in August 2023.

However, from late 2023 onward, there was a notable resurgence, with the ROTC rising to 48.15% by November 30, 2023, and maintaining a similar level at 47.23% by February 29, 2024. The most recent data points show a further increase to 48.22% in May 2024 and a peak at 53.31% in August 2024, indicating strong performance. Subsequently, there was a slight decline to 52.01% in November 2024, followed by fluctuations around 50.57% in February 2025, and a significant decrease to 37.76% in May 2025.

Overall, the trend suggests that Cintas has experienced periods of substantial improvements in operational efficiency and profitability relative to its total capital base, particularly in 2021 and early 2024. The fluctuations could reflect strategic operational changes, macroeconomic influences, or industry-specific factors impacting overall profitability and capital utilization. The recent peak implies a phase of strong performance, while the subsequent decline indicates potential cyclical adjustments or external challenges affecting its ability to generate consistent returns on total capital.