Zoetis Inc (ZTS)

Interest coverage

		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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	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	2,024,000	2,008,000	1,896,000	1,871,000
Interest expense (ttm)	US$ in thousands	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	223,000	226,000	224,000	215,000
Interest coverage		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	9.08	8.88	8.46	8.70

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,179,000K ÷ $239,000K
= 13.30

Interest coverage measures the ability of a company to meet its interest payments on outstanding debt using its operating income. In the case of Zoetis Inc, the interest coverage ratio has shown a consistent upward trend over the past eight quarters, indicating a strengthening ability to cover its interest expenses. The ratio has increased from 13.37 in Q1 2022 to 23.18 in Q4 2023, reflecting an improvement in the company's financial health and risk management. This suggests that Zoetis Inc has ample operating income to service its interest obligations, which bodes well for its creditworthiness and financial stability. Overall, the increasing trend in the interest coverage ratio for Zoetis Inc is a positive indicator of the company's ability to manage its debt obligations effectively.