Zoetis Inc (ZTS)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 14,300,000 | 14,925,000 | 13,900,000 | 13,600,000 | 11,545,000 |
| Total stockholders’ equity | US$ in thousands | 4,997,000 | 4,405,000 | 4,543,000 | 3,769,000 | 2,708,000 |
| Financial leverage ratio | 2.86 | 3.39 | 3.06 | 3.61 | 4.26 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $14,300,000K ÷ $4,997,000K
= 2.86
Zoetis Inc's financial leverage ratio has fluctuated over the past five years, ranging from 2.86 in 2023 to 4.26 in 2019. A financial leverage ratio above 1 indicates that the company relies more on debt to finance its operations than equity.
The decreasing trend in the leverage ratio from 2019 to 2023 suggests that Zoetis Inc has been gradually reducing its reliance on debt to fund its activities, which can be a positive sign of improved financial stability and risk management.
However, the ratio remains above 2 in the latest year, indicating that Zoetis Inc still has a significant level of financial leverage compared to its equity. It is important for the company to carefully manage its debt levels to ensure it remains sustainable and does not pose excessive risk to its financial health.
Peer comparison
Dec 31, 2023