Zoetis Inc (ZTS)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 3,348,000 | 3,179,000 | 2,880,000 | 2,715,000 | 2,229,000 |
| Interest expense | US$ in thousands | 225,000 | 239,000 | 221,000 | 224,000 | 231,000 |
| Interest coverage | 14.88 | 13.30 | 13.03 | 12.12 | 9.65 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $3,348,000K ÷ $225,000K
= 14.88
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. For Zoetis Inc, the interest coverage has shown a positive trend over the years, increasing from 9.65 in 2020 to 14.88 in 2024. This indicates that the company's earnings before interest and taxes (EBIT) have been sufficient to cover its interest expenses, with the ratio exceeding 1, which is considered a healthy sign. The steady improvement in the interest coverage ratio suggests that Zoetis Inc has been effectively managing its debt and generating enough operating income to comfortably meet its interest payments. This trend is reassuring for investors and creditors as it reflects the company's financial strength and ability to service its debt obligations.
Peer comparison
Dec 31, 2024