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.