Zoetis Inc (ZTS)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 3,348,000 | 3,276,000 | 3,131,000 | 3,223,000 | 3,179,000 | 3,123,000 | 3,068,000 | 2,860,000 | 2,880,000 | 2,786,000 | 2,780,000 | 2,751,000 | 2,715,000 | 2,633,000 | 2,577,000 | 2,424,000 | 2,229,000 | 2,243,000 | 2,168,000 | 2,137,000 |
| Interest expense (ttm) | US$ in thousands | 225,000 | 233,000 | 235,000 | 234,000 | 239,000 | 242,000 | 236,000 | 231,000 | 221,000 | 213,000 | 216,000 | 220,000 | 224,000 | 228,000 | 234,000 | 235,000 | 231,000 | 229,000 | 223,000 | 220,000 |
| Interest coverage | 14.88 | 14.06 | 13.32 | 13.77 | 13.30 | 12.90 | 13.00 | 12.38 | 13.03 | 13.08 | 12.87 | 12.50 | 12.12 | 11.55 | 11.01 | 10.31 | 9.65 | 9.79 | 9.72 | 9.71 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,348,000K ÷ $225,000K
= 14.88
The interest coverage ratio of Zoetis Inc has shown a generally positive trend over the past five years, indicating the company's ability to comfortably meet its interest obligations. The ratio has steadily increased from 9.71 in March 2020 to 14.88 in December 2024. This improvement suggests that Zoetis Inc's earnings before interest and taxes (EBIT) have been more than sufficient to cover its interest expenses, providing a buffer against potential financial distress.
The company's interest coverage ratio consistently remained above 1, indicating that Zoetis Inc generated enough operating income to service its interest payments, thereby avoiding default on its debt obligations. This trend reflects positively on the company's financial health and indicates a strong ability to manage its debt load effectively.
Overall, the increasing trend in Zoetis Inc's interest coverage ratio suggests that the company has been effectively managing its debt and generating sufficient earnings to cover its interest expenses. This could enhance investor confidence in the company's ability to meet its financial obligations and support future growth prospects.
Peer comparison
Dec 31, 2024