Intrinsic value of Cintas - CTAS

Previous Close

$151.22

  Intrinsic Value

$179.40

stock screener

  Rating & Target

hold

+19%

  Value-price divergence*

+82%

Previous close

$151.22

 
Intrinsic value

$179.40

 
Up/down potential

+19%

 
Rating

hold

 
Value-price divergence*

+82%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of CTAS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 16.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  10.99
  24.90
  22.91
  21.12
  19.51
  18.06
  16.75
  15.58
  14.52
  13.57
  12.71
  11.94
  11.24
  10.62
  10.06
  9.55
  9.10
  8.69
  8.32
  7.99
  7.69
  7.42
  7.18
  6.96
  6.76
  6.59
  6.43
  6.29
  6.16
  6.04
  5.94
Revenue, $m
  5,323
  6,648
  8,172
  9,897
  11,828
  13,964
  16,303
  18,842
  21,578
  24,505
  27,619
  30,917
  34,393
  38,046
  41,873
  45,873
  50,046
  54,393
  58,918
  63,624
  68,516
  73,599
  78,881
  84,371
  90,078
  96,012
  102,184
  108,607
  115,294
  122,260
  129,519
Variable operating expenses, $m
 
  5,515
  6,715
  8,075
  9,596
  11,278
  13,120
  15,121
  17,276
  19,582
  22,035
  24,354
  27,093
  29,970
  32,985
  36,135
  39,423
  42,848
  46,412
  50,119
  53,972
  57,977
  62,138
  66,462
  70,958
  75,632
  80,494
  85,554
  90,821
  96,308
  102,026
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  4,550
  5,515
  6,715
  8,075
  9,596
  11,278
  13,120
  15,121
  17,276
  19,582
  22,035
  24,354
  27,093
  29,970
  32,985
  36,135
  39,423
  42,848
  46,412
  50,119
  53,972
  57,977
  62,138
  66,462
  70,958
  75,632
  80,494
  85,554
  90,821
  96,308
  102,026
Operating income, $m
  774
  1,133
  1,456
  1,823
  2,232
  2,686
  3,182
  3,721
  4,302
  4,923
  5,584
  6,562
  7,300
  8,076
  8,888
  9,737
  10,623
  11,546
  12,506
  13,505
  14,543
  15,622
  16,744
  17,909
  19,120
  20,380
  21,690
  23,053
  24,473
  25,951
  27,492
EBITDA, $m
  971
  1,516
  1,864
  2,258
  2,698
  3,185
  3,719
  4,298
  4,922
  5,589
  6,300
  7,052
  7,845
  8,678
  9,551
  10,463
  11,415
  12,407
  13,439
  14,512
  15,628
  16,788
  17,993
  19,245
  20,547
  21,900
  23,308
  24,773
  26,298
  27,887
  29,543
Interest expense (income), $m
  0
  103
  141
  185
  234
  289
  350
  417
  490
  568
  652
  741
  835
  935
  1,039
  1,149
  1,263
  1,383
  1,507
  1,637
  1,771
  1,911
  2,057
  2,208
  2,365
  2,528
  2,698
  2,874
  3,058
  3,250
  3,449
Earnings before tax, $m
  687
  1,030
  1,315
  1,638
  1,999
  2,397
  2,832
  3,304
  3,812
  4,355
  4,932
  5,821
  6,465
  7,141
  7,849
  8,588
  9,360
  10,163
  10,999
  11,869
  12,772
  13,711
  14,687
  15,701
  16,755
  17,852
  18,992
  20,179
  21,414
  22,702
  24,043
Tax expense, $m
  230
  278
  355
  442
  540
  647
  765
  892
  1,029
  1,176
  1,332
  1,572
  1,746
  1,928
  2,119
  2,319
  2,527
  2,744
  2,970
  3,204
  3,448
  3,702
  3,966
  4,239
  4,524
  4,820
  5,128
  5,448
  5,782
  6,129
  6,492
Net income, $m
  481
  752
  960
  1,196
  1,459
  1,750
  2,067
  2,412
  2,783
  3,179
  3,601
  4,250
  4,720
  5,213
  5,730
  6,269
  6,833
  7,419
  8,029
  8,664
  9,324
  10,009
  10,722
  11,462
  12,231
  13,032
  13,864
  14,731
  15,633
  16,572
  17,552

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  191
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  6,844
  8,311
  10,214
  12,372
  14,785
  17,455
  20,378
  23,553
  26,972
  30,631
  34,524
  38,646
  42,992
  47,557
  52,341
  57,341
  62,557
  67,992
  73,648
  79,530
  85,644
  91,999
  98,602
  105,464
  112,598
  120,015
  127,730
  135,759
  144,118
  152,825
  161,898
Adjusted assets (=assets-cash), $m
  6,653
  8,311
  10,214
  12,372
  14,785
  17,455
  20,378
  23,553
  26,972
  30,631
  34,524
  38,646
  42,992
  47,557
  52,341
  57,341
  62,557
  67,992
  73,648
  79,530
  85,644
  91,999
  98,602
  105,464
  112,598
  120,015
  127,730
  135,759
  144,118
  152,825
  161,898
Revenue / Adjusted assets
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
Average production assets, $m
  1,515
  1,895
  2,329
  2,821
  3,371
  3,980
  4,646
  5,370
  6,150
  6,984
  7,871
  8,811
  9,802
  10,843
  11,934
  13,074
  14,263
  15,502
  16,792
  18,133
  19,527
  20,976
  22,481
  24,046
  25,672
  27,363
  29,122
  30,953
  32,859
  34,844
  36,913
Working capital, $m
  823
  1,243
  1,528
  1,851
  2,212
  2,611
  3,049
  3,523
  4,035
  4,582
  5,165
  5,781
  6,432
  7,115
  7,830
  8,578
  9,359
  10,172
  11,018
  11,898
  12,812
  13,763
  14,751
  15,777
  16,845
  17,954
  19,108
  20,310
  21,560
  22,863
  24,220
Total debt, $m
  3,134
  4,028
  5,273
  6,684
  8,262
  10,008
  11,921
  13,996
  16,233
  18,626
  21,172
  23,867
  26,709
  29,696
  32,824
  36,094
  39,505
  43,060
  46,759
  50,606
  54,604
  58,760
  63,079
  67,567
  72,232
  77,083
  82,128
  87,379
  92,846
  98,540
  104,474
Total liabilities, $m
  4,541
  5,435
  6,680
  8,091
  9,669
  11,415
  13,328
  15,403
  17,640
  20,033
  22,579
  25,274
  28,116
  31,103
  34,231
  37,501
  40,912
  44,467
  48,166
  52,013
  56,011
  60,167
  64,486
  68,974
  73,639
  78,490
  83,535
  88,786
  94,253
  99,947
  105,881
Total equity, $m
  2,303
  2,875
  3,534
  4,281
  5,116
  6,039
  7,051
  8,149
  9,332
  10,598
  11,945
  13,371
  14,875
  16,455
  18,110
  19,840
  21,645
  23,525
  25,482
  27,517
  29,633
  31,832
  34,116
  36,491
  38,959
  41,525
  44,195
  46,973
  49,865
  52,877
  56,017
Total liabilities and equity, $m
  6,844
  8,310
  10,214
  12,372
  14,785
  17,454
  20,379
  23,552
  26,972
  30,631
  34,524
  38,645
  42,991
  47,558
  52,341
  57,341
  62,557
  67,992
  73,648
  79,530
  85,644
  91,999
  98,602
  105,465
  112,598
  120,015
  127,730
  135,759
  144,118
  152,824
  161,898
Debt-to-equity ratio
  1.361
  1.400
  1.490
  1.560
  1.620
  1.660
  1.690
  1.720
  1.740
  1.760
  1.770
  1.780
  1.800
  1.800
  1.810
  1.820
  1.830
  1.830
  1.830
  1.840
  1.840
  1.850
  1.850
  1.850
  1.850
  1.860
  1.860
  1.860
  1.860
  1.860
  1.870
Adjusted equity ratio
  0.317
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  481
  752
  960
  1,196
  1,459
  1,750
  2,067
  2,412
  2,783
  3,179
  3,601
  4,250
  4,720
  5,213
  5,730
  6,269
  6,833
  7,419
  8,029
  8,664
  9,324
  10,009
  10,722
  11,462
  12,231
  13,032
  13,864
  14,731
  15,633
  16,572
  17,552
Depreciation, amort., depletion, $m
  197
  383
  408
  435
  465
  499
  536
  577
  620
  666
  716
  490
  545
  602
  663
  726
  792
  861
  933
  1,007
  1,085
  1,165
  1,249
  1,336
  1,426
  1,520
  1,618
  1,720
  1,825
  1,936
  2,051
Funds from operations, $m
  683
  1,135
  1,368
  1,631
  1,924
  2,249
  2,604
  2,988
  3,403
  3,845
  4,316
  4,739
  5,264
  5,815
  6,393
  6,996
  7,625
  8,280
  8,962
  9,671
  10,409
  11,175
  11,971
  12,798
  13,658
  14,552
  15,482
  16,450
  17,458
  18,508
  19,602
Change in working capital, $m
  -81
  248
  285
  323
  361
  399
  437
  475
  512
  547
  582
  617
  650
  683
  716
  748
  780
  813
  846
  880
  915
  951
  988
  1,027
  1,067
  1,110
  1,154
  1,201
  1,250
  1,303
  1,357
Cash from operations, $m
  764
  888
  1,083
  1,308
  1,563
  1,849
  2,166
  2,514
  2,891
  3,298
  3,734
  4,123
  4,614
  5,132
  5,677
  6,248
  6,845
  7,467
  8,116
  8,791
  9,494
  10,224
  10,983
  11,771
  12,591
  13,442
  14,328
  15,249
  16,208
  17,205
  18,245
Maintenance CAPEX, $m
  0
  -84
  -105
  -129
  -157
  -187
  -221
  -258
  -298
  -342
  -388
  -437
  -490
  -545
  -602
  -663
  -726
  -792
  -861
  -933
  -1,007
  -1,085
  -1,165
  -1,249
  -1,336
  -1,426
  -1,520
  -1,618
  -1,720
  -1,825
  -1,936
New CAPEX, $m
  -273
  -380
  -434
  -492
  -550
  -609
  -667
  -724
  -780
  -834
  -888
  -940
  -991
  -1,041
  -1,091
  -1,140
  -1,189
  -1,239
  -1,290
  -1,341
  -1,394
  -1,449
  -1,506
  -1,565
  -1,626
  -1,691
  -1,759
  -1,831
  -1,906
  -1,985
  -2,069
Cash from investing activities, $m
  -2,310
  -464
  -539
  -621
  -707
  -796
  -888
  -982
  -1,078
  -1,176
  -1,276
  -1,377
  -1,481
  -1,586
  -1,693
  -1,803
  -1,915
  -2,031
  -2,151
  -2,274
  -2,401
  -2,534
  -2,671
  -2,814
  -2,962
  -3,117
  -3,279
  -3,449
  -3,626
  -3,810
  -4,005
Free cash flow, $m
  -1,546
  423
  544
  687
  856
  1,053
  1,279
  1,532
  1,813
  2,122
  2,458
  2,746
  3,134
  3,547
  3,984
  4,445
  4,929
  5,436
  5,965
  6,517
  7,092
  7,690
  8,312
  8,958
  9,628
  10,325
  11,049
  11,801
  12,582
  13,395
  14,240
Issuance/(repayment) of debt, $m
  1,682
  1,085
  1,245
  1,411
  1,578
  1,746
  1,912
  2,076
  2,236
  2,393
  2,546
  2,696
  2,842
  2,986
  3,128
  3,270
  3,412
  3,554
  3,699
  3,847
  3,999
  4,156
  4,318
  4,488
  4,665
  4,851
  5,046
  5,251
  5,467
  5,694
  5,934
Issuance/(repurchase) of shares, $m
  11
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,721
  1,085
  1,245
  1,411
  1,578
  1,746
  1,912
  2,076
  2,236
  2,393
  2,546
  2,696
  2,842
  2,986
  3,128
  3,270
  3,412
  3,554
  3,699
  3,847
  3,999
  4,156
  4,318
  4,488
  4,665
  4,851
  5,046
  5,251
  5,467
  5,694
  5,934
Total cash flow (excl. dividends), $m
  172
  1,508
  1,789
  2,098
  2,435
  2,799
  3,191
  3,608
  4,049
  4,515
  5,004
  5,441
  5,976
  6,533
  7,112
  7,715
  8,340
  8,990
  9,664
  10,364
  11,091
  11,846
  12,630
  13,446
  14,293
  15,176
  16,094
  17,051
  18,049
  19,089
  20,174
Retained Cash Flow (-), $m
  -460
  -572
  -659
  -746
  -835
  -924
  -1,012
  -1,098
  -1,183
  -1,266
  -1,347
  -1,426
  -1,504
  -1,580
  -1,655
  -1,730
  -1,805
  -1,880
  -1,957
  -2,035
  -2,116
  -2,199
  -2,285
  -2,374
  -2,468
  -2,566
  -2,669
  -2,778
  -2,892
  -3,013
  -3,139
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  936
  1,130
  1,351
  1,600
  1,876
  2,179
  2,509
  2,866
  3,249
  3,657
  4,015
  4,472
  4,953
  5,457
  5,985
  6,536
  7,110
  7,707
  8,329
  8,976
  9,647
  10,346
  11,071
  11,825
  12,609
  13,425
  14,273
  15,157
  16,077
  17,035
Discount rate, %
 
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.18
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.20
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.37
  29.79
  31.28
PV of cash for distribution, $m
 
  870
  969
  1,061
  1,142
  1,206
  1,250
  1,273
  1,272
  1,247
  1,200
  1,112
  1,032
  939
  837
  731
  625
  523
  428
  342
  267
  204
  151
  109
  77
  53
  35
  22
  14
  8
  5
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Cintas Corporation is a provider of corporate identity uniforms through rental and sales programs, as well as a provider of related business services, including entrance mats, restroom cleaning services and supplies, carpet and tile cleaning services, first aid and safety services and fire protection products and services. Its segments include uniform rental and facility services, and first aid and safety services. Its uniform rental and facility service segment offers services, which include rental and servicing of uniforms and other garments, including flame resistant clothing, mats, mops and shop towels, and other ancillary items. Its first aid and safety service segment offers services, which include first aid and safety products and services. Rental processing plants, rental branches, first aid and safety facilities, fire protection facilities, direct sales offices, distribution centers and manufacturing facilities are all utilized by the businesses included in All Other.

FINANCIAL RATIOS  of  Cintas (CTAS)

Valuation Ratios
P/E Ratio 33.1
Price to Sales 3
Price to Book 6.9
Price to Tangible Book
Price to Cash Flow 20.9
Price to Free Cash Flow 32.5
Growth Rates
Sales Growth Rate 11%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -0.7%
Cap. Spend. - 3 Yr. Gr. Rate 13.3%
Financial Strength
Quick Ratio 1
Current Ratio 0.6
LT Debt to Equity 120.3%
Total Debt to Equity 136.1%
Interest Coverage 0
Management Effectiveness
Return On Assets 8.8%
Ret/ On Assets - 3 Yr. Avg. 11.8%
Return On Total Capital 11.2%
Ret/ On T. Cap. - 3 Yr. Avg. 15.3%
Return On Equity 23.2%
Return On Equity - 3 Yr. Avg. 27%
Asset Turnover 1
Profitability Ratios
Gross Margin 43.2%
Gross Margin - 3 Yr. Avg. 43.5%
EBITDA Margin 16.6%
EBITDA Margin - 3 Yr. Avg. 17.7%
Operating Margin 14.5%
Oper. Margin - 3 Yr. Avg. 15.4%
Pre-Tax Margin 12.9%
Pre-Tax Margin - 3 Yr. Avg. 14.1%
Net Profit Margin 9%
Net Profit Margin - 3 Yr. Avg. 11.1%
Effective Tax Rate 33.5%
Eff/ Tax Rate - 3 Yr. Avg. 35.6%
Payout Ratio 29.5%

CTAS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CTAS stock intrinsic value calculation we used $5323 million for the last fiscal year's total revenue generated by Cintas. The default revenue input number comes from 2017 income statement of Cintas. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CTAS stock valuation model: a) initial revenue growth rate of 24.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.6%, whose default value for CTAS is calculated based on our internal credit rating of Cintas, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Cintas.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CTAS stock the variable cost ratio is equal to 84%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CTAS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Cintas.

Corporate tax rate of 27% is the nominal tax rate for Cintas. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CTAS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CTAS are equal to 28.5%.

Life of production assets of 18 years is the average useful life of capital assets used in Cintas operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CTAS is equal to 18.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2303 million for Cintas - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 105.963 million for Cintas is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Cintas at the current share price and the inputted number of shares is $16.0 billion.

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COMPANY NEWS

▶ 'Trump Stock' Cintas: Cramer's Top Takeaways   [Oct-16-17 08:59PM  TheStreet.com]
▶ Cintas a 'terrific' play on job growth   [07:01PM  CNBC Videos]
▶ ETFs with exposure to Cintas Corp. : October 12, 2017   [Oct-12-17 10:23AM  Capital Cube]
▶ Here are the top 10 Cincinnati stocks so far this year: SLIDESHOW   [Oct-10-17 04:56PM  American City Business Journals]
▶ [$$] Memory Chip Maker Micron Elbows Ahead   [Sep-30-17 12:52AM  Barrons.com]
▶ 3 Growth Dividend Stocks for September   [Sep-29-17 08:00PM  Motley Fool]
▶ Highly Rated Stock Gaps Up Into Buy Zone; Earns Rating Upgrade   [Sep-28-17 10:50AM  Investor's Business Daily]
▶ Company News For Sep 28, 2017   [09:52AM  Zacks]
▶ 3 Ultra Cheap Value Stocks   [Sep-27-17 09:24PM  Zacks]
▶ Cintas Looks Unstoppable   [01:02PM  TheStreet.com]
▶ Cintas tops Street 1Q forecasts   [Sep-26-17 09:39PM  Associated Press]
▶ Which of these restrooms is Americas best? PHOTOS   [Sep-21-17 11:40AM  American City Business Journals]
▶ Is It Too Late To Buy Cintas Corporation (CTAS)?   [Sep-18-17 09:07AM  Simply Wall St.]
▶ Only One Week Left to Vote for Canadas Best Restroom®   [Aug-31-17 09:00AM  Business Wire]
▶ ETFs with exposure to Cintas Corp. : August 28, 2017   [Aug-28-17 05:05PM  Capital Cube]
▶ 3 Stocks You Can Buy and Hold for the Next Decade   [Aug-24-17 10:33AM  Motley Fool]
▶ ETFs with exposure to Cintas Corp. : August 16, 2017   [Aug-16-17 05:32PM  Capital Cube]
▶ 5 Winning Stocks to Fight August Woes   [Aug-01-17 11:38AM  Zacks]
▶ ETFs with exposure to Cintas Corp. : July 24, 2017   [Jul-24-17 03:10PM  Capital Cube]
▶ Cintas Was the S&P 500s Top Gainer on July 21   [11:35AM  Market Realist]
▶ General Electric and Chipotle fall while Capital One climbs   [Jul-21-17 05:52PM  Associated Press]
▶ Cintas tops Street 4Q forecasts   [Jul-20-17 09:39PM  Associated Press]
▶ Should You Sell Cintas (CTAS) Before Earnings?   [Jul-17-17 08:49AM  Zacks]
▶ ETFs with exposure to Cintas Corp. : July 14, 2017   [Jul-14-17 01:45PM  Capital Cube]
▶ 5 Buy-Ranked Stocks Poised To Beat Earnings   [Jul-12-17 04:13PM  Zacks]
▶ 3 Unknown but Amazing Dividend Stocks   [Jul-06-17 12:00PM  Motley Fool]
▶ Cintas Corp. Value Analysis (NASDAQ:CTAS) : July 3, 2017   [Jul-03-17 04:18PM  Capital Cube]
▶ 2015 Canadas Best Restroom Winner Receives Positive Praise   [May-23-17 10:02AM  Business Wire]
▶ Xavier honors Cincinnati business leader with basketball court name (Video)   [May-18-17 03:21PM  American City Business Journals]
▶ Cintas Location in Fort Myers is Expanding and Hiring   [May-10-17 02:41PM  Business Wire]
Financial statements of CTAS
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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