Revenue Analysis
Total and Operating Revenue: Between 2023 and 2024, CTAS’s total revenue showed a rising trend from $2.19 billion in February 2023 to $2.41 billion by February 2024. Operating revenue also increased from $1.72 billion in February 2023 to approximately $1.88 billion in February 2024. These trends suggest a robust growth in the company’s core operations.
Gross Profit Margins: Gross profit margins remained relatively consistent, with the gross profit rising from $1.03 billion in February 2023 to approximately $1.19 billion by February 2024. This steady increase reflects efficient revenue management and possibly improved cost structures in goods sold.
Cost Management
Cost of Revenue: The cost of revenue was high but stable, moving from about $1.16 billion in February 2023 to roughly $1.22 billion by February 2024. This indicates a controlled cost environment relative to the revenue increments.
Operating Expense: Operating expenses saw a gradual increment, moving from $587 million in February 2023 to $667 million by February 2024, in line with the revenue and operational scale-ups.
Total Expenses: Total expenses increased from $1.74 billion in February 2023 to around $1.89 billion by February 2024, aligning with the general operational growth.
Profitability Analysis
EBITDA and Operating Income: EBITDA increased from $550 million in February 2023 to $633 million by February 2024, and Operating Income followed a similar upward trajectory. This underlines stronger operational performance and effective cost management.
Pretax Income and Net Income: Pretax income grew from $418 million in February 2023 to $496 million by February 2024. Net income also showed a rising trend, contributing to a net increase in profitability from $326 million in February 2023 to nearly $398 million by February 2024.
Cash Flow Indicators
Reconciled Depreciation: Reconciled depreciation has seen a slight increase, which is consistent with expanding operations and investment in fixed assets, indicating future preparedness for operational capabilities.
Interest Expense: Interest expense has remained relatively stable, adjusting for normal business operations and financing activities.
Taxation
Tax Rate and Provision: The tax rate varied minimally but stayed within the range of 19.2% to 22.4% through the analyzed period, with consequent tax provisions aligned accordingly.
Tax Effect Of Unusual Items: There were no tax effects of unusual items, simplifying the tax scenario for CTAS during the period reviewed.
Shareholder Metrics
Diluted and Basic EPS: Both diluted and basic EPS showed improvement, reflecting the company’s enhanced earning power. Diluted EPS increased from 3.14 in February 2023 to 3.84 by February 2024, and Basic EPS from 3.19 to 3.9 in the same period.
Average Shares and Net Income Available to Common Stockholders: Average shares outstanding remained stable, showing management’s controlled approach towards any equity dilution. Meanwhile, Net Income Available to Common Stockholders reflected the net income trends effectively.
Conclusion
CTAS has demonstrated solid revenue growth, stable cost management, and increasing profitability over the past three fiscal quarters. The financial indicators suggest robust operational health and strategic financial management. The company should continue to focus on optimizing operational efficiency and exploring growth opportunities to enhance shareholder value.