Cintas Corporation (CTAS)

Solvency ratios

	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	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019
Debt-to-assets ratio	0.22	0.28	0.28	0.28	0.29	0.29	0.29	0.30	0.30	0.16	0.17	0.17	0.20	0.27	0.27	0.28	0.33	0.32	0.32	0.33
Debt-to-capital ratio	0.32	0.37	0.38	0.38	0.39	0.41	0.42	0.43	0.43	0.29	0.27	0.29	0.31	0.38	0.39	0.39	0.44	0.43	0.45	0.45
Debt-to-equity ratio	0.47	0.58	0.62	0.61	0.64	0.68	0.72	0.77	0.75	0.41	0.38	0.41	0.45	0.60	0.64	0.64	0.79	0.76	0.82	0.83
Financial leverage ratio	2.12	2.12	2.21	2.14	2.21	2.33	2.46	2.56	2.46	2.48	2.25	2.37	2.23	2.19	2.35	2.23	2.37	2.38	2.54	2.51

The solvency ratios of Cintas Corporation provide insights into the company's ability to meet its long-term financial obligations. Looking at the trends over the past few quarters, we can observe the following:

1. Debt-to-assets ratio: This ratio has fluctuated over the periods provided, ranging from 0.16 to 0.33. It indicates the proportion of the company's assets that are financed by debt. Cintas has maintained a relatively conservative level of debt compared to its assets, with the ratio mostly hovering around the 0.25 mark.

2. Debt-to-capital ratio: This ratio also shows variability, ranging from 0.27 to 0.45. It reveals the extent to which debt is used to fund the company's operations compared to equity. Despite some fluctuations, Cintas has generally maintained a balanced mix of debt and equity in its capital structure.

3. Debt-to-equity ratio: The trend for this ratio reflects fluctuations between 0.38 and 0.83, indicating Cintas' increasing reliance on debt financing in relation to equity. The higher ratios suggest a higher level of financial leverage and potentially greater financial risk.

4. Financial leverage ratio: This ratio has shown fluctuations between 2.12 and 2.56, measuring the level of debt in relation to equity. Cintas' financial leverage has varied over the periods but generally stayed around the 2.25-2.50 range, implying a moderate level of leverage in the company's capital structure.

Overall, Cintas Corporation seems to have maintained a reasonable level of solvency throughout the periods analyzed, with a relatively stable debt-to-assets ratio and a balanced debt-to-capital ratio. However, the increasing debt-to-equity ratio indicates a growing reliance on debt funding, which warrants monitoring for potential impacts on the company's financial stability and risk profile.

Coverage ratios

	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	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019
Interest coverage	20.56	19.47	18.16	17.26	16.22	16.01	16.69	17.25	17.87	17.04	15.71	14.98	14.11	12.42	12.13	11.76	11.04	12.07	11.66	11.91

Interest coverage ratio is a financial metric used to evaluate a company's ability to pay interest on its outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense. A higher interest coverage ratio indicates that the company is in a better position to meet its interest obligations.

Based on the data provided for Cintas Corporation, the interest coverage ratio has been consistently healthy over the past few years, ranging from 11.04 to 20.56. This indicates that the company has been able to generate sufficient earnings to cover its interest expenses comfortably.

The trend shows a generally increasing interest coverage ratio over the past few quarters, which is a positive signal. It suggests that Cintas Corporation has been managing its debt and interest payments more efficiently, leading to improved financial health and stability.

Overall, the consistently high and improving interest coverage ratio of Cintas Corporation reflects a strong financial position and signifies the company's ability to handle its debt obligations effectively.