Zoetis Inc (ZTS)
Financial leverage ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 14,300,000 | 14,106,000 | 13,749,000 | 13,754,000 | 14,925,000 | 13,674,000 | 13,770,000 | 13,860,000 | 13,900,000 | 13,705,000 | 14,069,000 | 13,796,000 | 13,600,000 | 13,725,000 | 13,069,000 | 11,528,000 | 11,545,000 | 11,272,000 | 10,986,000 | 10,883,000 |
| Total stockholders’ equity | US$ in thousands | 4,997,000 | 5,078,000 | 4,625,000 | 4,494,000 | 4,405,000 | 4,663,000 | 4,580,000 | 4,658,000 | 4,543,000 | 4,679,000 | 4,350,000 | 4,089,000 | 3,769,000 | 3,602,000 | 2,982,000 | 2,753,000 | 2,708,000 | 2,678,000 | 2,411,000 | 2,317,000 |
| Financial leverage ratio | 2.86 | 2.78 | 2.97 | 3.06 | 3.39 | 2.93 | 3.01 | 2.98 | 3.06 | 2.93 | 3.23 | 3.37 | 3.61 | 3.81 | 4.38 | 4.19 | 4.26 | 4.21 | 4.56 | 4.70 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $14,300,000K ÷ $4,997,000K
= 2.86
The financial leverage ratio of Zoetis Inc has exhibited some fluctuations over the past eight quarters. The ratio decreased from 3.39 in Q4 2022 to 2.78 in Q3 2023 before increasing to 2.97 in Q2 2023. Subsequently, there was a slight rise to 3.06 in Q1 2023. However, the ratio remains relatively high compared to earlier periods.
A higher financial leverage ratio indicates that Zoetis Inc relies more on debt financing to support its operations and growth. While this can amplify returns in favorable market conditions, it also increases the company's financial risk. Investors and creditors may closely monitor the trend in the financial leverage ratio to assess the company's ability to repay its debt obligations.
Despite the fluctuations observed, Zoetis Inc's financial leverage ratio appears to have stabilized around 2.9 to 3.0 in recent quarters. This could suggest that the company has found a balance between debt and equity financing to support its business activities. A stable financial leverage ratio may indicate a manageable level of debt relative to the company's assets and equity.
Peer comparison
Dec 31, 2023