Zoetis Inc (ZTS)

Activity ratios

Short-term

Turnover ratios

	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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	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	2.71	2.60	2.66	2.72
Receivables turnover	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	5.57	5.97	6.08	6.10
Payables turnover	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	12.68	13.19	12.90	15.75
Working capital turnover	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	2.13	1.72	1.77	1.79

Activity ratios are critical indicators of a company's efficiency in managing its resources and operations. Let's analyze Zoetis Inc's activity ratios based on the provided data:

1. Inventory Turnover: Zoetis Inc's inventory turnover has been relatively stable over the last eight quarters, ranging between 0.91 and 1.13. A lower inventory turnover may indicate overstocking or slow-moving inventory, while a higher ratio suggests efficient inventory management.

2. Receivables Turnover: The receivables turnover ratio measures how efficiently Zoetis Inc collects outstanding receivables. The company's receivables turnover has fluctuated slightly, but generally remained around 6.0 to 6.8 over the past two years. A higher turnover ratio reflects faster collection of receivables, which is a positive sign.

3. Payables Turnover: Zoetis Inc's payables turnover ratio has also shown variability, ranging from 5.29 to 6.44. A higher payables turnover indicates that the company is paying its suppliers more quickly. However, sudden fluctuations may also indicate changes in payment terms or relationships with suppliers.

4. Working Capital Turnover: Zoetis Inc's working capital turnover has shown some variability, with values ranging from 1.81 to 2.22. This ratio indicates how efficiently the company utilizes its working capital to generate revenue. A higher turnover ratio implies better utilization of working capital resources.

Overall, while Zoetis Inc's activity ratios have shown some fluctuations, the company has generally maintained stable efficiency levels in managing its inventory, receivables, payables, and working capital. It is essential for management to continue monitoring these ratios to ensure ongoing operational efficiency and effective resource utilization.

Average number of days

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	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	134.80	140.21	137.02	134.19
Days of sales outstanding (DSO)	days	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	65.48	61.13	60.01	59.87
Number of days of payables	days	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	28.78	27.67	28.30	23.17

Days of inventory on hand (DOH) indicates how efficiently Zoetis Inc manages its inventory. In Q4 2023, Zoetis had 365.43 days of inventory on hand, which decreased from the previous quarter, signaling improved inventory management. However, compared to the same quarter last year, the DOH has increased, suggesting a potential decline in inventory turnover efficiency.

Days of sales outstanding (DSO) measures how effectively Zoetis collects its accounts receivable. In Q4 2023, Zoetis had 55.71 days of sales outstanding, which increased slightly from the previous quarter. However, this metric has remained relatively stable over the past year, indicating consistent collection practices.

Number of days of payables measures how long it takes Zoetis to pay its suppliers. In Q4 2023, Zoetis took 58.58 days to pay its payables, which increased from the previous quarter. The trend over the past year shows fluctuations in payment efficiency, with Q4 2023 showing an increase from the same quarter last year.

Overall, Zoetis Inc may need to focus on improving its inventory management and payment efficiency to enhance its working capital cycle and financial performance.

Long-term

	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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	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	3.23	3.39	3.48	3.51
Total asset turnover	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	0.54	0.55	0.55	0.54

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. Zoetis Inc's fixed asset turnover has been decreasing slightly over the past eight quarters, from 3.17 in Q1 2022 to 2.67 in Q4 2023. This downward trend indicates that the company may be becoming less efficient in using its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio measures how efficiently a company is using all of its assets to generate sales. Zoetis Inc's total asset turnover has been relatively stable around the 0.59 - 0.60 range over the same period, indicating that the company has been consistent in generating revenue relative to its total assets.

In comparing the two ratios, Zoetis Inc's fixed asset turnover is significantly higher than its total asset turnover. This suggests that the company is more efficient in utilizing its fixed assets compared to its total assets to generate sales. However, the decreasing trend in fixed asset turnover may warrant further investigation into the company's asset management and utilization strategies to ensure long-term sustainability and profitability.