Zoetis Inc (ZTS)

Debt-to-assets ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Long-term debt	US$ in thousands	5,220,000	6,564,000	6,552,000	6,592,000	6,595,000
Total assets	US$ in thousands	14,237,000	14,286,000	14,925,000	13,900,000	13,600,000
Debt-to-assets ratio		0.37	0.46	0.44	0.47	0.48

December 31, 2024 calculation

Debt-to-assets ratio = Long-term debt ÷ Total assets
= $5,220,000K ÷ $14,237,000K
= 0.37

The debt-to-assets ratio of Zoetis Inc has shown a general decreasing trend over the past five years. As of December 31, 2020, the ratio stood at 0.48, indicating that 48% of the company's assets were financed by debt. Over the subsequent years, this ratio decreased to 0.47 in 2021, 0.44 in 2022, and then increased slightly to 0.46 in 2023. However, in December 31, 2024, it dropped significantly to 0.37.

A decreasing debt-to-assets ratio can suggest that Zoetis Inc is becoming more conservative in its use of debt to finance its operations, which is generally viewed positively as it implies a lower risk of financial distress. This trend could also indicate that the company is efficiently managing its debt levels and effectively utilizing its assets to generate revenue.

However, the sudden drop in the debt-to-assets ratio in 2024 might warrant further investigation to understand the underlying reasons for this significant decrease. Overall, the decreasing trend in the debt-to-assets ratio over the past five years reflects a positive financial position for Zoetis Inc in terms of its debt management and asset utilization.