Zoetis Inc (ZTS)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 3,348,000 | 3,179,000 | 2,880,000 | 2,715,000 | 2,229,000 |
| Long-term debt | US$ in thousands | 5,220,000 | 6,564,000 | 6,552,000 | 6,592,000 | 6,595,000 |
| Total stockholders’ equity | US$ in thousands | 4,770,000 | 4,997,000 | 4,405,000 | 4,543,000 | 3,769,000 |
| Return on total capital | 33.51% | 27.50% | 26.28% | 24.38% | 21.51% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $3,348,000K ÷ ($5,220,000K + $4,770,000K)
= 33.51%
Based on the provided data, Zoetis Inc's return on total capital has exhibited a positive trend over the analyzed period. The return on total capital increased from 21.51% as of December 31, 2020, to 33.51% as of December 31, 2024. This indicates the company's ability to generate returns from its total capital employed has improved significantly over the years.
The consistent upward trajectory in return on total capital reflects Zoetis Inc's efficient utilization of both debt and equity capital. It suggests that the company has been able to generate higher profits in relation to the total capital invested in the business. This could be a result of effective financial management, operational efficiency, or successful strategic initiatives implemented by the company.
The latest return on total capital figure of 33.51% as of December 31, 2024, indicates that Zoetis Inc is generating $0.3351 in returns for every dollar of total capital employed. This strong performance is a positive indicator for investors and stakeholders, as it signifies the company's ability to create value and generate attractive returns on the resources invested in the business.
Overall, the increasing trend in Zoetis Inc's return on total capital underscores the company's strong financial performance and effective capital allocation strategies, positioning it as a potentially attractive investment opportunity in the market.
Peer comparison
Dec 31, 2024