Cintas Corporation provides workplace products and services — primarily uniform rental, facility services and safety/fire-protection solutions — and presents as a high-return, cash-generative industrial services business with conservative balance-sheet leverage.
The company shows several clear strengths. Return on equity remains elevated at 36.2% (most recent TTM) per the Return on Equity (ROE) series, and trailing net income has expanded to $2.39B TTM with quarterly net income around $502.5M most recently (quarter ending 2026-02-28), supporting the view of growing earnings power shown in the Revenue & Net Income card. Cash generation is robust: operating cash flow (most recently reported in the dataset) reached $1.29B and free cash flow margin is about 10.7%, with a cash conversion ratio of 1.47 indicating earnings convert to cash at a healthy pace (see Earnings Quality Analysis and Strategic Capital Allocation). The balance sheet exhibits conservative leverage metrics with debt-to-equity of 0.5446, an interest coverage ratio of 24.25x, and a current ratio of 1.7420.
There are notable concerns that temper the strengths. Margin and operating-profitability measures have been highly volatile: gross margin swung from 89.7% in 2022 to 3.6% by 2025-05-31 before recovering to 22.6% by 2025-08-31, and operating margin shows a wide range including a −49.0% observation (period ending 2025-05-31), as summarized in Profit Margin Trends. Cash-flow allocation shows materially larger outflows into investing and financing recently — investing cash flow around −$625.5M TTM and financing cash flow about −$1.71B most recently — which increases sensitivity to capital allocation decisions (see Strategic Capital Allocation). In addition, a ROE-growth metric is negative (−0.7344), indicating that despite high absolute ROE, return trends have not been steadily improving.
The foundation of business quality and long-term value creation
CINTAS CORP's reported quarterly revenue has shown a generally higher level in recent years, rising from $2.34B on 2023-08-31 to $2.56B on 2024-11-30, reaching $2.80B on 2025-05-31 before a slight pullback to $2.72B on 2025-08-31. The recent quarters therefore show revenue clustering in the mid-to-high $2.7B range.
Net income has shifted from mid‑hundreds of millions in earlier quarters toward higher recent levels. After a sequence around $325M–$415M in 2023–2024, reported net income was $463.5M on 2025-02-28, spiked to $900.3M on 2025-05-31 (a notable one-quarter inflection), and then resumed around $490M–$502M through 2025-08-31 ($491.1M), 2025-11-30 ($495.3M) and 2026-02-28 ($502.5M). The most recent quarterly revenue was $2.72B and the most recent quarterly net income was $502.5M.
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Over the period Sep 2024 to Aug 2025, Cintas Corp converts approximately 23¢ of every revenue dollar into gross profit (gross margin: 22.6%).After accounting for operating expenses and taxes and expenses, the company retains 28.5% as net profit margin, resulting in $2.30B in net earnings.
Period Information
Report Type: Annual (10-K)
Period: Sep 2024 to Aug 2025
Analyzing long-term margin stability and competitive positioning
CINTAS CORP’s margin history shows large swings across the series rather than steady stability.
Gross margin was very high at 89.7% in both 2022-05-31 and 2023-05-31, then dropped sharply to 3.6% by 2025-05-31 before recovering to 22.6% by 2025-08-31.
Operating margin likewise exhibits wide variability, ranging from 65.6% on 2023-05-31 to -49.0% on 2025-05-31, with intermediate observations of 19.5% (2021-05-31) and -4.5% (2016-05-31).
Net profit margin was largely in the mid-teens across several prior periods (e.g., 13.7%–15.6% from 2018–2023) but moved higher in 2025, showing 33.8% on 2025-05-31 and 28.5% on 2025-08-31.
The most recent margins are summarized as follows: gross margin 22.6% (period ending 2025-08-31), operating margin -49.0% (2025-05-31), and net profit margin 28.5% (2025-08-31).
Understanding Profit Margins
Between Sep 2024 and Aug 2025, Cintas Corp converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
CINTAS CORP's trailing‑12‑month net income shows a steady upward trend in recent quarters, accelerating after mid‑2024. Net income rose from $1.57B at 2024‑05‑31 to $1.81B at 2025‑05‑31 and then to $2.30B (2025‑08‑31), $2.35B (2025‑11‑30) and $2.39B (2026‑02‑28), indicating a sustained increase over the most recent reporting periods.
Operating cash flow (TTM) in the chart is only available through 2020‑05‑31, where it was $1.29B; earlier operating cash flow increased from \$608.0M (2014‑05‑31) to $1.07B (2019‑05‑31) and then $1.29B (2020‑05‑31). The most recent Net Income TTM was $2.39B and the most recent Operating Cash Flow TTM shown was $1.29B.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
Trailing Twelve Months
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
CINTAS CORP's trailing twelve-month ROE has remained elevated in recent quarters, recording 36.2% as of . The most recent reading follows a peak of 52.8% on and 38.7% on , with prior quarterly values of 36.4% (2024-05-31) and 35.5% (2024-02-29), indicating a reversion from the late-2025 spike back into the mid-30% range.
Over the multi-year series, ROE moved up from mid-20% levels (26.1% in 2016 and roughly 27–30% through 2018–2020) into the low-to-mid 30% band by 2023–2025, with an outlier dip to 20.1% on . The most recent Return on Equity was 36.2%.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
CINTAS CORP's trailing twelve-month data show operating cash flow reported in the dataset only through mid-2020, where operating cash increased from $964.2M (2018) to $1.07B (2019) and to $1.29B (2020). Investing cash flow has trended steadily more negative over the period covered, moving from roughly -$135.7M in 2018 to larger outflows by 2021 (-$402.6M) and further into the mid- to high-$500M$ to -$625M range in 2024–2025. Financing cash flow has been persistently negative across the series and has generally increased in magnitude over time, rising from the mid-to-high hundreds of millions in 2018–2020 toward roughly -$1.1B–$1.6B in 2021–2024 and reaching -$1.71B in the most recent observation.
Most recent TTM values: operating cash flow $1.29B, investing cash flow -$625.5M, and financing cash flow -$1.71B
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Trailing Twelve Months
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.