Cintas Corporation (CTAS)

Interest coverage

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 May 31, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 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 1,152,828 1,071,665 1,043,392 998,367 857,825 845,757 827,098 782,999
Interest expense (ttm) US$ in thousands 101,124 101,890 101,815 100,740 102,437 105,726 108,056 111,232 108,517 101,728 94,710 88,844 90,337 92,859 95,514 98,210 99,611 101,002 102,622 105,393
Interest coverage 22.96 21.91 21.05 20.66 19.52 18.19 17.27 16.22 16.01 16.69 17.25 17.88 12.76 11.54 10.92 10.17 8.61 8.37 8.06 7.43

February 28, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,322,194K ÷ $101,124K
= 22.96

The analysis of Cintas Corporation’s interest coverage ratios over the specified periods indicates a robust and generally improving capacity to meet interest obligations from operating earnings. Starting from a ratio of 7.43 as of May 31, 2020, the metric demonstrated a consistent upward trend, reaching 22.96 by February 28, 2025.

Throughout the period from mid-2020 to early 2025, the interest coverage ratio experienced steady growth, reflecting a strengthening ability to cover interest expenses. Notably, between May 2020 and May 2021, there was significant improvement, with the ratio increasing from 7.43 to 10.17, signaling enhanced operational profitability relative to interest obligations. This positive trend continued thereafter, with ratios crossing into double digits, indicating healthier coverage.

From mid-2021 onwards, the ratio displayed sustained growth, frequently surpassing 16, with a peak of 22.96 observed in February 2025. This indicates that Cintas has increasingly generated sufficient operating income to cover interest expenses multiple times over, suggesting a conservative financial structure with a comfortable margin of safety.

The trend of rising interest coverage ratios over the analyzed period underscores not only improved profitability and cash flow from operations but also a potential reduction in financial risk associated with interest payments. Overall, Cintas Corporation demonstrates a strong and growing ability to meet its interest obligations, supporting its financial stability and capacity for ongoing operational resilience.


See also:

Cintas Corporation Interest Coverage (Quarterly Data)