Zoetis Inc (ZTS)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | 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 |
| Receivables | US$ in thousands | 1,395,000 | 1,362,000 | 1,286,000 | 1,180,000 | 1,061,000 |
| Total current liabilities | US$ in thousands | 3,412,000 | 1,889,000 | 3,167,000 | 1,797,000 | 2,170,000 |
| Quick ratio | 0.99 | 1.80 | 1.54 | 2.60 | 2.15 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,985,000K
+ $2,000K
+ $1,395,000K)
÷ $3,412,000K
= 0.99
The quick ratio, also known as the acid-test ratio, measures a company's ability to cover its short-term liabilities with its most liquid assets. A ratio above 1 indicates that the company has enough liquid assets to cover its current liabilities.
Analyzing the quick ratio of Zoetis Inc over the past five years reveals the following trend:
- As of December 31, 2020, the quick ratio was 2.15, indicating a healthy liquidity position.
- By December 31, 2021, the quick ratio improved to 2.60, signaling an even stronger ability to meet short-term obligations.
- However, by December 31, 2022, the quick ratio declined to 1.54, suggesting a decrease in liquidity.
- The quick ratio recovered slightly by December 31, 2023, reaching 1.80.
- By December 31, 2024, the quick ratio dropped significantly to 0.99, falling below the ideal threshold of 1.
Overall, Zoetis Inc demonstrated a strong liquidity position in the initial years, but there was a notable decline in liquidity in the later years, particularly in 2024, which may warrant further investigation into the company's ability to meet its short-term obligations.
Peer comparison
Dec 31, 2024