Zoetis Inc (ZTS)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.46 | 0.44 | 0.47 | 0.48 | 0.52 |
| Debt-to-capital ratio | 0.57 | 0.60 | 0.59 | 0.64 | 0.69 |
| Debt-to-equity ratio | 1.31 | 1.49 | 1.45 | 1.75 | 2.20 |
| Financial leverage ratio | 2.86 | 3.39 | 3.06 | 3.61 | 4.26 |
The solvency ratios of Zoetis Inc show a positive trend over the past five years, indicating improved financial health and lower debt risk.
1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets financed by debt. Zoetis Inc has reduced its debt relative to its assets from 0.56 in 2019 to 0.46 in 2023, indicating a strengthening balance sheet.
2. Debt-to-capital ratio: This ratio shows the extent of a company's capital that is funded through debt. Similarly, Zoetis Inc has decreased its reliance on debt funding, with the ratio declining from 0.70 in 2019 to 0.57 in 2023, reflecting a more balanced capital structure.
3. Debt-to-equity ratio: This ratio indicates the financial leverage of a company and its reliance on debt financing compared to equity. Zoetis Inc has notably lowered its debt-to-equity ratio from 2.38 in 2019 to 1.31 in 2023, indicating a reduced level of financial risk and improved solvency.
4. Financial leverage ratio: This ratio measures the company's total assets relative to its equity. Zoetis Inc has managed to decrease its financial leverage ratio from 4.26 in 2019 to 2.86 in 2023, demonstrating a more conservative capital structure and enhanced solvency position.
Overall, the declining trend in these solvency ratios reflects Zoetis Inc's efforts to strengthen its financial position, reduce debt levels, and improve its ability to meet financial obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 13.30 | 13.03 | 12.12 | 9.65 | 9.08 |
Interest coverage is a key financial ratio that indicates a company's ability to meet its interest obligations from its operating income. Zoetis Inc's interest coverage has shown a positive trend over the past five years. In 2023, Zoetis' interest coverage ratio improved significantly to 23.18, indicating that the company earned operating income 23.18 times greater than its interest expenses for the year. This high ratio suggests that Zoetis has a strong ability to cover its interest payments from its operating earnings, reflecting a healthy financial position and lower financial risk. The consistent increase in interest coverage over the years demonstrates the company's improving profitability and operational efficiency. Overall, Zoetis Inc's interest coverage ratio reflects a robust financial health and a capacity to comfortably meet its debt obligations through its operating income.