Zoetis Inc (ZTS)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	1,985,000	2,041,000	3,581,000	3,485,000	3,604,000
Short-term investments	US$ in thousands	2,000	—	—	—	2,000
Total current liabilities	US$ in thousands	3,412,000	1,889,000	3,167,000	1,797,000	2,170,000
Cash ratio		0.58	1.08	1.13	1.94	1.66

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,985,000K + $2,000K) ÷ $3,412,000K
= 0.58

The cash ratio of Zoetis Inc has shown some fluctuations over the past five years. As of December 31, 2020, the company had a cash ratio of 1.66, indicating that it had $1.66 in cash and cash equivalents for every dollar of current liabilities. This ratio improved to 1.94 by December 31, 2021, suggesting an increase in the company's liquidity position.

However, there was a significant decline in the cash ratio to 1.13 by December 31, 2022, and further dropped to 1.08 by the end of 2023. These lower ratios may indicate potential liquidity challenges or a decrease in the company's ability to cover its short-term obligations solely with its cash holdings.

By December 31, 2024, Zoetis Inc's cash ratio decreased further to 0.58, signaling a significant decrease in liquidity compared to the previous years. This decline could potentially raise concerns about the company's ability to meet its short-term financial obligations using its available cash resources.

Overall, the trend in Zoetis Inc's cash ratio fluctuates over the years, and the decreasing ratios in the latter years may require further investigation into the company's liquidity management strategies and the efficiency of its cash management processes.