Cintas External Factors

External Analysis:
There are several situations taking place externally that could affect Cintas’s uniform rental business. Some of these events will have a positive impact on Cintas while others will have a negative impact. Some positive events include the growth of the healthcare industry, which the company sees as an opportunity to grow its rental business. Some negative external factors that could affect Cintas, including legal troubles, foreign currency exchange fluctuations and increased competition.
As was mentioned above, one of the positive external factors that could affect the company’s uniform business is the growth of the healthcare industry. A growing health care industry means more people need to be hired and more uniforms are

Another aspect that makes Cintas’s ability to cater to a broad market a key capability is that it is costly to imitate. Hiring employees and building facilities needed to cover many different industries and many different services would be extremely expensive for a company. Furthermore, it would be very expensive to build up the customer base necessary to be able to expand into new markets. Finally, this key capability is non-substitutable due to the nature of Cintas’s business. While products such as entry mats and cleaning supplies can be ordered, and shipped over the internet, there are no substitutes for other aspects of its business. For example, uniform and restroom cleaning and other service based aspects of Cintas’s

Additionally, this capability has allowed Cintas to provide excellent service to its customers and is a reason the company year-over-year receives awards for its service.
Financials:
In 2017 Cintas had about $5.3 billion in revenue, of this about $4.2 billion stems from their uniform rental and facility service division. First aid and safety services made up about half a billion in revenue, and other divisions made up about $600 million. Interestingly, even though first aid and safety services account for less than 10% of overall revenue, the cost of sales as a percentage of revenue is lowest for first aid and safety services followed by uniform rental and facility services, and all other divisions being the costliest of operating segments. Looking at the balance sheet, Cintas’s total assets have grown significantly with the acquisition of G&K Services, now totaling almost $6.9 billion. A line item that has increased significantly is goodwill, perhaps for paying a premium while acquiring G&K Services. It is also important to note that long-term liabilities have more than doubled for Cintas after the acquisition. More specifically long-term debt that due after one year has almost