Zoetis Inc (ZTS)

Cash conversion cycle

		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
Cash conversion cycle	days	185.35	197.01	201.17	216.37	216.49	231.64	228.79	216.82	208.56	203.54	196.76	187.42	174.83	176.01	177.03	176.88	162.93	173.10	174.30	171.33

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 160.47 + 55.01 – 30.13
= 185.35

The cash conversion cycle of Zoetis Inc has shown some fluctuations over the period analyzed. It measures the time it takes for a company to convert its investments in inventory into cash flows from sales.

From March 31, 2020, to December 31, 2020, the company managed to reduce its cash conversion cycle steadily from 171.33 days to 162.93 days, indicating an improved efficiency in managing its working capital. However, from March 31, 2021, to December 31, 2021, the cycle increased slightly to 174.83 days.

There was a notable increase in the cash conversion cycle from March 31, 2022, to December 31, 2024, where it peaked at 231.64 days on September 30, 2023. This increase suggests a lengthening time for Zoetis Inc to convert its investments back into cash, which may indicate potential issues in managing its inventory, sales, or accounts receivables.

Overall, Zoetis Inc should focus on optimizing its cash conversion cycle to ensure efficient working capital management and maintain healthy cash flows.