Zoetis Inc (ZTS)
Fixed asset turnover
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 9,256,000 | 9,152,000 | 8,915,000 | 8,734,000 | 8,544,000 | 8,371,000 | 8,222,000 | 8,094,000 | 8,080,000 | 8,007,000 | 7,995,000 | 7,891,000 | 7,776,000 | 7,616,000 | 7,412,000 | 7,012,000 | 6,675,000 | 6,542,000 | 6,340,000 | 6,339,000 |
| Property, plant and equipment | US$ in thousands | 3,391,000 | 3,298,000 | 3,200,000 | 3,251,000 | 3,204,000 | 3,092,000 | 3,011,000 | 2,913,000 | 2,753,000 | 2,623,000 | 2,559,000 | 2,487,000 | 2,422,000 | 2,338,000 | 2,286,000 | 2,227,000 | 2,202,000 | 2,099,000 | 2,011,000 | 1,977,000 |
| Fixed asset turnover | 2.73 | 2.78 | 2.79 | 2.69 | 2.67 | 2.71 | 2.73 | 2.78 | 2.93 | 3.05 | 3.12 | 3.17 | 3.21 | 3.26 | 3.24 | 3.15 | 3.03 | 3.12 | 3.15 | 3.21 |
December 31, 2024 calculation
Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $9,256,000K ÷ $3,391,000K
= 2.73
The fixed asset turnover ratio of Zoetis Inc has shown a declining trend from 3.21 in March 2020 to 2.73 in June 2024. This ratio indicates how efficiently the company is utilizing its fixed assets to generate revenue. A higher ratio is generally preferred as it signifies that the company is generating more sales relative to its investment in fixed assets.
The decline in the fixed asset turnover ratio over the period may imply that Zoetis Inc is becoming less efficient in utilizing its fixed assets to generate revenue. This could be due to various factors such as an increase in fixed asset investments without a corresponding increase in sales or inefficiencies in asset utilization.
Management should closely monitor this ratio and investigate the reasons behind the decrease to identify potential areas for improvement in asset utilization and overall operational efficiency. It may be necessary to reassess the company's asset management strategies and consider ways to optimize the use of fixed assets to enhance profitability and return on investment.
Peer comparison
Dec 31, 2024