Cintas Corporation (CTAS)

Interest coverage

		May 31, 2025	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021
Earnings before interest and tax (EBIT)	US$ in thousands	—	2,081,470	1,812,510	1,590,340	1,387,860
Interest expense	US$ in thousands	101,108	100,740	111,232	88,844	98,210
Interest coverage		0.00	20.66	16.29	17.90	14.13

May 31, 2025 calculation

Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $101,108K
= 0.00

The interest coverage ratios for Cintas Corporation over the specified periods indicate a generally strong capacity to meet interest obligations, with fluctuations observed across the fiscal years. As of May 31, 2021, the ratio was 14.13, reflecting that the company's earnings before interest and taxes (EBIT) were more than sufficient to cover interest expenses by approximately 14 times. This high coverage ratio suggests a robust ability to meet interest commitments, reducing default risk concerns.

In the subsequent year, May 31, 2022, the interest coverage ratio increased to 17.90, signaling an improvement in the company's EBIT relative to interest expenses. This upward trend continued into May 31, 2023, with a ratio of 16.29, maintaining a strong cushion above the critical threshold of 1.5 to 2.0, which is considered adequate for most industries.

However, by May 31, 2024, the ratio rose further to 20.66, indicating an even stronger ability to cover interest costs, possibly due to increased earnings or reduced interest expense, or a combination of both. The trend demonstrates an enhancing financial stability in terms of interest obligation coverage.

Contrastingly, the projected or reported ratio for May 31, 2025, is 0.00, which could suggest either an absence of interest expense reported for that period, a change in accounting or reporting practices, or an unusual circumstance such as a significant restructuring or non-recurring charge that impacted the EBIT or interest expense figures. Given the previous high ratios, this sharp decline appears anomalous and warrants further investigation to understand the underlying reasons, such as operational anomalies, reporting adjustments, or extraordinary items.

Overall, the historical data up to 2024 reflects a strong and improving interest coverage position for Cintas Corporation. The expected ratio for 2025 deviates markedly from the historical trend, indicating a potential area of concern or a specific financial event affecting the company's ability to generate earnings to cover interest obligations in that period.