Zoetis Inc (ZTS)

Operating return on assets (Operating ROA)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Operating income	US$ in thousands	511,000	565,000	392,000	124,000	-85,000
Total assets	US$ in thousands	14,300,000	14,925,000	13,900,000	13,600,000	11,545,000
Operating ROA		3.57%	3.79%	2.82%	0.91%	-0.74%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $511,000K ÷ $14,300,000K
= 3.57%

Operating return on assets (operating ROA) is a key financial ratio that measures a company's efficiency in generating operating income from its assets. Zoetis Inc's operating ROA has shown a positive trend over the past five years, increasing from 17.48% in 2019 to 21.48% in 2023. This indicates an improvement in the company's ability to generate earnings from its operational assets.

The consistent growth in operating ROA reflects Zoetis Inc's effective management of its assets to generate operating income. It suggests that the company has been able to increase its profitability relative to the size of its asset base over the years.

The higher operating ROA numbers in recent years, compared to earlier years, indicate a stronger operational performance and better asset utilization by Zoetis Inc. This efficiency in generating operating income from assets is a positive sign for investors and stakeholders, as it indicates a higher return on the company's investments in its operational activities.

Overall, Zoetis Inc's improving operating ROA trend showcases the company's strength in effectively utilizing its assets to drive operational profitability, potentially contributing to its overall financial health and performance in the market.