Zoetis Inc (ZTS)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.37 | 0.46 | 0.44 | 0.47 | 0.48 |
| Debt-to-capital ratio | 0.52 | 0.57 | 0.60 | 0.59 | 0.64 |
| Debt-to-equity ratio | 1.09 | 1.31 | 1.49 | 1.45 | 1.75 |
| Financial leverage ratio | 2.98 | 2.86 | 3.39 | 3.06 | 3.61 |
Zoetis Inc's solvency ratios indicate the company's ability to meet its financial obligations over the long term.
The Debt-to-assets ratio has shown a downward trend from 0.48 in 2020 to 0.37 in 2024. This suggests that Zoetis has been reducing its reliance on debt to finance its assets, which is generally a positive sign for solvency.
The Debt-to-capital ratio has also decreased from 0.64 in 2020 to 0.52 in 2024, indicating that the proportion of debt in the company's capital structure has been declining. This can be interpreted as a favorable trend towards greater financial stability.
The Debt-to-equity ratio has consistently decreased over the years, from 1.75 in 2020 to 1.09 in 2024. This implies that the company is relying less on debt and more on equity to finance its operations, which reduces the financial risk associated with high levels of debt.
The Financial leverage ratio has fluctuated over the years, reaching a low of 2.86 in 2023. This ratio measures the proportion of assets financed by debt compared to equity, and a decreasing trend indicates a lower financial risk for the company.
Overall, the decreasing trend in debt ratios and leverage ratios suggest an improvement in Zoetis Inc's solvency position and a reduction in financial risk over the years. This indicates that the company is managing its financial obligations effectively and is in a strong position to meet its long-term debt commitments.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 14.88 | 13.30 | 13.03 | 12.12 | 9.65 |
Interest coverage ratio measures a company's capacity to meet its interest obligations with its operating income. Higher ratios indicate better ability to cover interest payments.
Looking at Zoetis Inc's interest coverage from 2020 to 2024, we observe a consistent improvement in the ratio. In 2020, the interest coverage was 9.65, indicating that the company earned almost 10 times the interest expenses.
Subsequently, Zoetis Inc's interest coverage ratios increased to 12.12 in 2021, 13.03 in 2022, 13.30 in 2023, and finally, 14.88 in 2024. This trend reflects the company's strengthening ability to cover interest payments comfortably, showcasing a positive financial performance and stability.
Overall, the increasing trend in Zoetis Inc's interest coverage ratio suggests a solid financial position, demonstrating the company's ability to meet its interest obligations with ease over the years.