Zoetis Inc (ZTS)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 2.29 | 1.95 | 2.01 | 2.39 | 2.51 |
| Receivables turnover | 6.64 | 6.27 | 6.28 | 6.59 | 6.29 |
| Payables turnover | 12.20 | 12.14 | 11.64 | 10.52 | 8.93 |
| Working capital turnover | 3.60 | 1.92 | 1.86 | 1.51 | 1.50 |
Zoetis Inc Activity Ratios Analysis:
1. Inventory Turnover: Zoetis Inc's inventory turnover has shown a slight decline from 2.51 in 2020 to 1.95 in 2023, before picking up again to 2.29 in 2024. This indicates that the company is taking longer to sell its inventory, potentially tying up more capital in stock.
2. Receivables Turnover: Zoetis Inc's receivables turnover has been fairly consistent over the years, ranging from 6.27 to 6.64. This shows that the company is efficient in collecting its receivables, maintaining a healthy cycle of cash flow from sales.
3. Payables Turnover: Zoetis Inc's payables turnover has been increasing steadily from 8.93 in 2020 to 12.20 in 2024. This suggests that the company is taking longer to pay its suppliers, potentially improving its cash flow position in the short term.
4. Working Capital Turnover: Zoetis Inc's working capital turnover has shown an increasing trend from 1.50 in 2020 to 3.60 in 2024. This indicates that the company is generating more revenue per dollar of working capital, reflecting improved efficiency in utilizing its resources.
Overall, Zoetis Inc's activity ratios reflect a mixed performance in managing its working capital and operating cycle. The company may need to focus on optimizing its inventory management to enhance cash flow and operational efficiency further.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 159.32 | 187.55 | 181.53 | 152.98 | 145.57 |
| Days of sales outstanding (DSO) | days | 55.01 | 58.18 | 58.09 | 55.39 | 58.02 |
| Number of days of payables | days | 29.92 | 30.06 | 31.35 | 34.69 | 40.86 |
Zoetis Inc's activity ratios provide insights into the efficiency of its operations in managing inventory, collecting receivables, and paying suppliers.
1. Days of Inventory on Hand (DOH):
- Zoetis Inc's Days of Inventory on Hand increased from 145.57 days in 2020 to 187.55 days in 2023 before decreasing to 159.32 days in 2024. This indicates that Zoetis held inventory for an average of approximately 160 days in 2024 before selling it.
- The increase in DOH from 2020 to 2023 may suggest challenges in managing inventory levels efficiently. However, the decrease in 2024 indicates a more effective inventory management approach.
2. Days of Sales Outstanding (DSO):
- Zoetis Inc's Days of Sales Outstanding fluctuated slightly, ranging from 55.01 days in 2024 to 58.18 days in 2023. This metric represents the average number of days it takes for the company to collect payment from its customers.
- The relatively stable DSO indicates that Zoetis has been consistent in collecting payments from customers within a similar timeframe over the years.
3. Number of Days of Payables:
- Zoetis Inc's Number of Days of Payables decreased steadily from 40.86 days in 2020 to 29.92 days in 2024. This metric reflects the average number of days it takes for the company to pay its suppliers.
- The consistent decline in days of payables suggests that Zoetis has been improving its payment efficiency by settling payables more quickly.
In summary, based on these activity ratios, Zoetis Inc has shown improvements in inventory management efficiency, consistency in collecting receivables, and increased efficiency in paying suppliers over the years.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.73 | 2.67 | 2.93 | 3.21 | 3.03 |
| Total asset turnover | 0.65 | 0.60 | 0.54 | 0.56 | 0.49 |
The long-term activity ratios of Zoetis Inc, as indicated by the Fixed Asset Turnover and Total Asset Turnover ratios, provide insight into how efficiently the company is utilizing its assets in generating sales revenue.
1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio measures the efficiency with which the company generates sales revenue from its fixed assets. A higher ratio indicates that the company is utilizing its fixed assets more effectively to generate sales.
- Zoetis Inc's Fixed Asset Turnover ratio has shown fluctuations over the years, starting at 3.03 in 2020 and peaking at 3.21 in 2021 before declining to 2.67 in 2023 and then rising to 2.73 in 2024.
- While the ratio has fluctuated, it remains relatively stable overall, indicating that Zoetis Inc is efficiently using its fixed assets to generate sales revenue.
2. Total Asset Turnover:
- The Total Asset Turnover ratio evaluates how efficiently the company is utilizing all its assets to generate sales. A higher ratio suggests that the company is effectively using its total assets to generate revenue.
- Zoetis Inc's Total Asset Turnover ratio has shown an increasing trend over the years, starting at 0.49 in 2020 and steadily rising to 0.65 in 2024. This indicates an improvement in the company's ability to generate sales revenue from its total assets.
- The increasing trend in the Total Asset Turnover ratio suggests that Zoetis Inc has been able to efficiently utilize its assets to drive revenue growth and improve overall operational efficiency.
In conclusion, Zoetis Inc's long-term activity ratios demonstrate a generally efficient utilization of assets to drive sales revenue, with fluctuations in the Fixed Asset Turnover ratio but a consistent improvement in the Total Asset Turnover ratio over the years. This indicates effective asset management and operational performance by the company.