Zoetis Inc (ZTS)

Activity ratios

Short-term

Turnover ratios

	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
Inventory turnover	2.27	2.16	2.09	1.90	1.94	1.77	1.78	1.87	2.01	2.05	2.13	2.24	2.36	2.40	2.43	2.46	2.50	2.44	2.45	2.59
Receivables turnover	6.64	6.49	6.45	6.75	6.27	6.66	6.22	6.82	6.28	6.73	6.19	6.46	6.59	6.61	6.34	6.23	6.29	6.46	6.44	6.57
Payables turnover	12.11	12.92	12.22	12.47	12.08	12.53	10.34	11.27	11.62	12.65	10.93	11.48	10.42	11.62	11.87	12.07	8.91	11.12	11.57	14.47
Working capital turnover	3.60	2.00	2.02	1.96	1.92	1.81	1.86	1.86	1.86	2.18	2.22	2.07	1.51	1.46	1.50	1.48	1.50	1.50	1.42	2.08

The activity ratios of Zoetis Inc provide insights into the efficiency of the company's operations. Here are the key findings based on the data provided:

1. Inventory Turnover: Zoetis Inc's inventory turnover has decreased gradually over the years, indicating that the company is taking longer to sell its inventory. This could potentially lead to excess inventory levels or slow-moving stock.

2. Receivables Turnover: The receivables turnover ratio of Zoetis Inc fluctuates over the years but generally shows a slight improvement, suggesting that the company is collecting its receivables at a relatively steady pace. A higher turnover ratio indicates better efficiency in collecting payments from customers.

3. Payables Turnover: Zoetis Inc's payables turnover has varied but remained relatively stable over time. The company has been paying its suppliers within a consistent timeframe, which is crucial for maintaining good relationships with vendors.

4. Working Capital Turnover: The working capital turnover ratio of Zoetis Inc has shown variability, with some fluctuations observed over the years. A higher turnover ratio suggests that the company is efficiently utilizing its working capital to generate sales revenue.

Overall, these activity ratios highlight the trends in Zoetis Inc's inventory management, receivables collection, payables management, and working capital efficiency. Monitoring these ratios can help assess the company's operational performance and identify areas for improvement in its working capital management.

Average number of days

		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
Days of inventory on hand (DOH)	days	160.47	169.00	174.43	191.61	188.53	205.96	205.39	195.71	181.88	178.21	171.20	162.69	154.47	152.22	150.17	148.55	145.86	149.46	149.20	140.99
Days of sales outstanding (DSO)	days	55.01	56.27	56.62	54.04	58.18	54.81	58.69	53.48	58.09	54.20	58.94	56.52	55.39	55.21	57.62	58.56	58.02	56.46	56.65	55.56
Number of days of payables	days	30.13	28.26	29.88	29.27	30.22	29.12	35.28	32.38	31.41	28.86	33.39	31.79	35.02	31.42	30.75	30.23	40.94	32.81	31.55	25.23

Days of Inventory on Hand (DOH): Zoetis Inc's DOH has been increasing steadily over the years, ranging from 140.99 days as of March 31, 2020, to 191.61 days as of March 31, 2024. This indicates that the company is holding inventory for a longer period, which may tie up its cash flow and increase the risk of obsolescence.

Days of Sales Outstanding (DSO): The DSO for Zoetis Inc has fluctuated over the years, with a general trend of staying within the range of 53 to 59 days. This measure shows how long it takes for the company to collect revenue from its credit sales. Zoetis Inc seems to have maintained a relatively stable collection period.

Number of Days of Payables: Zoetis Inc has managed to keep its payables period relatively stable, with slight fluctuations observed. The number of days of payables has ranged from around 25 to 40 days, indicating the average time it takes for the company to pay off its suppliers. A lower number suggests efficient management of payables.

Overall, Zoetis Inc's activity ratios suggest some room for improvement in managing its inventory levels more efficiently to optimize cash flow, while its collection and payment cycles appear to be relatively stable.

Long-term

	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
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
Total asset turnover	0.65	0.64	0.63	0.61	0.60	0.59	0.60	0.59	0.54	0.59	0.58	0.57	0.56	0.56	0.53	0.51	0.49	0.48	0.49	0.55

The analysis of Zoetis Inc's long-term activity ratios reveals the following trends:

1. Fixed Asset Turnover: Zoetis Inc's fixed asset turnover has shown a gradual decline from 3.21 in March 2020 to 2.73 in June 2024. This indicates that the company generated $2.73 in sales for every $1 worth of fixed assets in June 2024. The decreasing trend suggests that Zoetis may be less efficient in utilizing its fixed assets to generate revenue over the period.

2. Total Asset Turnover: On the other hand, Zoetis Inc's total asset turnover has exhibited a more stable pattern, increasing from 0.55 in March 2020 to 0.65 in December 2024. This demonstrates that Zoetis generated $0.65 in sales for every $1 of total assets in December 2024. The rising trend indicates that the company has become more effective in generating sales relative to its total asset base over the analyzed period.

Overall, while the fixed asset turnover has declined signaling potential inefficiencies in utilizing fixed assets, the total asset turnover has improved, suggesting enhanced efficiency in generating sales with the total asset base. It could be beneficial for Zoetis Inc to further investigate the reasons behind the declining fixed asset turnover to optimize asset utilization and improve overall performance.