Zoetis Inc. (NYSE:ZTS)

Total Asset Turnover

The reported total asset turnover ratio showed moderate fluctuation over the five-year period, starting at 0.54 in 2019, declining to 0.49 in 2020, then increasing to 0.56 in 2021, maintaining near that level in 2022, and rising to 0.60 in 2023. The adjusted total asset turnover mirrors this trend closely with a slight upward adjustment in the most recent year, reaching 0.61 in 2023, indicating incremental improvement in the efficiency of asset use for generating revenue.

Current Ratio

The current ratio demonstrated notable variability. Initially at 2.63 in 2019, it increased significantly to 3.05 in 2020 and further to 3.86 in 2021, reflecting improved short-term liquidity. However, a sharp decrease occurred in 2022 to 2.37, before rebounding to 3.36 in 2023. Adjusted figures align closely, suggesting consistent liquidity trends with a temporary dip in 2022.

Debt to Equity Ratio

A downward trend in leverage is observable, with the reported debt to equity ratio decreasing from 2.38 in 2019 to 1.32 in 2023, interrupted by a slight increase in 2022. The adjusted ratio follows a similar trajectory, demonstrating the company’s gradual reduction in reliance on equity financing relative to debt over time.

Debt to Capital Ratio

The debt to capital ratio shows a gradual decline from 0.70 in 2019 to 0.57 in 2023, reflecting a steady decrease in debt as a proportion of total capital. The adjusted metric corroborates this pattern, indicating a consistent reduction in the company's capital structure risk when measured by debt levels.

Financial Leverage

Financial leverage decreased considerably from 4.26 in 2019 to 2.86 in 2023, after a slight increase in 2022. Adjusted financial leverage indicates a similar decrease, reinforcing the observation of reduced reliance on borrowed funds and potentially lower financial risk.

Net Profit Margin

The reported net profit margin exhibited a steady increase over the period, from 23.96% in 2019 to 27.43% in 2023, except for a minor dip between 2021 and 2022. Adjusted net profit margin improved overall but experienced a more pronounced decrease in 2022. This suggests overall strengthening profitability with some variability in adjusted earnings.

Return on Equity (ROE)

ROE trended downward from 55.39% in 2019 to 43.46% in 2020, then rose modestly to a peak of 47.99% in 2022 before a slight decline to 46.91% in 2023. The adjusted ROE showed a similar pattern but with less volatility, demonstrating moderate improvement in shareholder returns after initial decline.

Return on Assets (ROA)

Reported ROA increased from 12.99% in 2019 to 16.41% in 2023, despite a small decrease in 2020 and 2022. Adjusted ROA follows this positive trend, highlighting enhanced efficiency in asset utilization contributing to profitability over the entire span.

Revenue

Revenue shows a consistent upward trend over the five-year period, increasing from 6,260 million US dollars in 2019 to 8,544 million US dollars in 2023. The most notable growth occurred between 2020 and 2021, with revenue rising by approximately 16.5%. The growth trend continues, albeit at a slightly moderated pace, reaching its highest value in 2023.

Total Assets

Total assets increased steadily from 11,545 million US dollars in 2019 to a peak of 14,925 million US dollars in 2022, followed by a slight decline to 14,286 million US dollars in 2023. This pattern suggests expansion through asset accumulation until 2022, with a minor contraction or asset optimization in the final year observed.

Reported Total Asset Turnover

The reported total asset turnover ratio exhibits moderate fluctuations across the period. It started at 0.54 in 2019, dropped to 0.49 in 2020, then recovered to 0.56 in 2021, remained stable at 0.54 in 2022, and improved to 0.60 in 2023. Overall, this indicates a recovery and eventual improvement in asset utilization efficiency by the end of the period.

Adjusted Total Assets

Adjusted total assets closely track the trend of reported total assets, rising from 11,478 million US dollars in 2019 to 14,771 million US dollars in 2022 before a small decrease to 14,098 million US dollars in 2023. This similarity suggests that the adjustments did not significantly alter the overall asset trend but provide a slightly refined view of asset value.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio follows a similar pattern to the reported ratio, beginning at 0.55 in 2019, dipping to 0.49 in 2020, then increasing to 0.56 in 2021, maintaining 0.55 in 2022, and rising to 0.61 in 2023. This trend reinforces the observation of improved efficiency in asset use for generating revenue, with the highest turnover recorded in the latest period.

Overall Analysis

The data indicates steady revenue growth alongside an expanding asset base, with a peak in assets reached in 2022 and a slight decrease thereafter. The turnover ratios suggest that while asset efficiency decreased temporarily in 2020, it has improved consistently since then, reaching better levels in 2023 than at the start of the period. The improved turnover ratios combined with revenue growth suggest enhanced operational effectiveness and asset management in recent years.

The analysis of the financial data over the five-year period reveals several notable trends in liquidity metrics, particularly with respect to current assets, current liabilities, and current ratios.

Current Assets

Current assets showed a steady upward trend from 2019 to 2022, increasing from $4,748 million to $7,506 million. However, in 2023, there was a decline to $6,343 million, partially reversing the previous growth.

Current Liabilities

Current liabilities fluctuated throughout the period. Starting at $1,806 million in 2019, liabilities increased to $2,170 million in 2020, then decreased to $1,797 million in 2021, followed by a significant spike to $3,167 million in 2022, before falling again to $1,889 million in 2023. This variability indicates shifts in short-term obligations, with 2022 representing a peak year.

Reported Current Ratio

The reported current ratio, indicating the company's ability to cover short-term liabilities with short-term assets, generally improved from 2.63 in 2019 to a high of 3.86 in 2021. It then dropped sharply to 2.37 in 2022, reflecting the increase in current liabilities and the dip in current assets in certain periods, before rebounding to 3.36 in 2023. This suggests enhanced liquidity in 2021 followed by tighter conditions in 2022 and an improvement in the most recent year.

Adjusted Current Assets and Liabilities

The adjusted figures show similar patterns to the reported values but with slight differences in absolute amounts. Adjusted current assets increased steadily from $4,769 million in 2019 to a peak of $7,525 million in 2022, then decreased to $6,361 million in 2023. Adjusted current liabilities followed the same volatility pattern as reported liabilities, peaking notably in 2022 at $3,162 million before retracting to $1,863 million in 2023.

Adjusted Current Ratio

The adjusted current ratio closely mirrored the reported current ratio throughout the years. It ascended from 2.67 in 2019 to 3.90 in 2021, then decreased to 2.38 in 2022, and increased again to 3.41 in 2023. The fluctuations echo the underlying changes in adjusted asset and liability figures, highlighting corresponding liquidity shifts.

Overall, the data indicate that the company maintained strong liquidity ratios over the five-year period, with peak liquidity in 2021 and a notable dip in 2022 likely driven by a substantial rise in current liabilities. The subsequent recovery in 2023 suggests effective management of working capital and short-term obligations after that tightening phase.

The financial data over the five-year period reveal notable fluctuations in both debt and equity figures, with corresponding effects on leverage ratios.

Total Debt

Total debt experienced an initial increase from 6447 million USD in 2019 to 7199 million USD in 2020. This was followed by a decline to 6592 million USD in 2021. The debt rose sharply again in 2022, reaching 7904 million USD, before decreasing to 6576 million USD in 2023. This pattern suggests some variability in debt financing, with a peak in 2022.

Total Equity

Equity showed consistent growth over the period, starting at 2708 million USD in 2019 and increasing steadily to reach 4997 million USD by 2023, despite a slight dip from 4543 million USD in 2021 to 4405 million USD in 2022. This indicates strengthening capitalization overall, with a minor setback during the penultimate year.

Reported Debt to Equity Ratio

The ratio illustrates a decreasing trend in leverage, from a high of 2.38 in 2019 to a lower figure of 1.32 in 2023. Notably, the ratio dropped significantly between 2019 and 2021, followed by an increase in 2022 that was again reduced in 2023. This suggests that while leverage remained substantial, the company has effectively moderated its debt relative to equity over time.

Adjusted Total Debt and Equity

The adjusted figures reflect a similar pattern to the reported values but consistently present slightly higher debt and equity values. Adjusted debt peaked in 2022 at 8133 million USD, while equity peaked in 2021 at 4806 million USD before a decline and recovery similar to reported equity values. These adjustments suggest consideration of additional financial factors impacting the reported totals.

Adjusted Debt to Equity Ratio

The adjusted leverage ratio follows the reported trend, declining from 2.13 in 2019 to 1.37 in 2023, with a rise observed in 2022. This trend confirms the broader leverage pattern, reflecting prudent financial management despite periodic increases in debt levels.

Overall, the data indicate prudent management of capital structure with a general move toward lower leverage, supported by growth in equity. Periodic increases in debt, particularly in 2022, suggest temporary financing needs or strategic investments that were balanced by subsequent equity growth and debt reduction. The use of adjusted figures supports the robustness of these conclusions, affirming the company's financial position strengthening over the five years.

Total Debt

The total debt experienced fluctuations over the five-year period. It increased from $6,447 million at the end of 2019 to a peak of $7,904 million by the end of 2022, before declining to $6,576 million in 2023. This suggests a notable rise in leverage leading up to 2022, followed by a reduction in debt levels in the subsequent year.

Total Capital

Total capital showed a consistent upward trend from 2019 through 2022, increasing from $9,155 million to $12,309 million. In 2023, total capital declined slightly to $11,573 million. Overall, capital base growth indicates an expansion in the company's resources, though the slight drop in 2023 might reflect a strategic adjustment or capital structure change.

Reported Debt to Capital Ratio

This ratio steadily decreased from 0.70 in 2019 to 0.59 in 2021, indicating improving balance sheet leverage during this initial period. However, the ratio increased to 0.64 in 2022, signifying a rise in debt relative to capital, before dropping again to 0.57 in 2023, the lowest in the period. These fluctuations imply fluctuations in leverage management, with the overall trend pointing to reduced debt reliance in the latest year.

Adjusted Total Debt

Adjusted total debt values generally mirror the trend in reported total debt, beginning at $6,646 million in 2019, rising to a high of $8,133 million in 2022, and then falling to $6,812 million in 2023. The adjustments appear to slightly increase the reported debt values but follow the same pattern of increase followed by a reduction.

Adjusted Total Capital

Adjusted total capital increased steadily from $9,766 million in 2019 to $12,539 million in 2022, before decreasing to $11,796 million in 2023. This pattern is consistent with reported total capital, reaffirming growth in capital resources up until 2022 and a moderate decline thereafter.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio decreased from 0.68 in 2019 to 0.59 in 2021, suggesting a strengthening capital position relative to debt. An increase to 0.65 occurred in 2022, followed by a reduction to 0.58 in 2023, indicating similar leverage dynamics to the reported ratio with generally increased leverage in 2022 and improved debt management in 2023.

Summary Insights

The data reveals a period of debt accumulation and capital growth until 2022, with leverage ratios reflecting increased debt usage relative to capital in that year. In 2023, the company reduced its debt levels and experienced a slight contraction in capital, resulting in improved leverage ratios at their lowest point in the five-year period. This pattern suggests a strategic focus on deleveraging or optimizing the capital structure after a phase of expansion.

The analysis of the financial data over the five-year period reveals several noteworthy trends and patterns concerning the assets, equity, and financial leverage ratios.

Total Assets (US$ in millions)

The total assets show a generally upward trajectory from 2019 through 2022, starting at 11,545 million and increasing annually to reach 14,925 million in 2022. However, there is a slight decline in 2023 to 14,286 million, indicating a marginal contraction after years of growth.

Total Zoetis Inc. Equity (US$ in millions)

Equity exhibits consistent growth over the period. Beginning at 2,708 million in 2019, equity rises steadily each year, culminating in 4,997 million by 2023. This demonstrates an increasing shareholder value and capitalization over time.

Reported Financial Leverage (Ratio)

The reported financial leverage ratio decreases overall across the period. It starts at 4.26 in 2019 and declines to 2.86 in 2023, with some fluctuations: a downward trend through 2021 to 3.06, a slight uptick to 3.39 in 2022, followed by a decrease to the lowest point in 2023. This trend suggests a reduction in reliance on debt financing relative to equity.

Adjusted Total Assets (US$ in millions)

Adjusted total assets follow a pattern similar to total assets, increasing steadily from 11,478 million in 2019 to a peak of 14,771 million in 2022. A decline to 14,098 million is noted in 2023, consistent with overall asset trends indicating potential asset revaluation or disposals.

Adjusted Total Equity (US$ in millions)

Adjusted equity steadily rises from 3,120 million in 2019 to 4,984 million in 2023, mirroring the trend observed in reported equity. Notably, there is a slight decrease from 4,806 million in 2021 to 4,406 million in 2022 before increasing again in 2023, revealing a temporary dip in equity adjustments for that year.

Adjusted Financial Leverage (Ratio)

The adjusted financial leverage ratio exhibits a general downward trend from 3.68 in 2019 to 2.83 in 2023. Similar to the reported leverage, it decreases to 2.87 by 2021, increases marginally to 3.35 in 2022, and then declines to its lowest value in 2023. This pattern aligns with a strategic shift towards lower leverage after a slight temporary increase.

Overall, the data indicate an increase in equity and a reduction in financial leverage ratios over the five-year timeframe, underscoring an improvement in the company's capital structure with less dependency on debt. The asset base expanded consistently until 2022, followed by a modest decrease in 2023. The temporary uptick in leverage ratios during 2022 in both reported and adjusted figures corresponds with minor fluctuations in equity values that year, suggesting possible operational or financial adjustments. The consistent growth in both reported and adjusted equity points to strengthening financial fundamentals and shareholder value creation.

The financial data exhibits an overall positive trend in the company's key performance metrics over the analyzed period. There is a consistent increase in both net income attributable to the company and revenue, indicating growth in profitability and sales volume.

Net Income Attributable to the Company

The net income shows a steady upward trajectory, rising from 1,500 million US dollars in 2019 to 2,344 million US dollars in 2023. This increase reflects a sustained improvement in the company's bottom-line profitability, with particularly significant growth observed between 2020 and 2021, as well as between 2022 and 2023.

Revenue

Revenue increased consistently each year, moving from 6,260 million US dollars in 2019 to 8,544 million US dollars in 2023. This steady revenue growth underscores the company's ability to expand its operations or improve sales, contributing positively to overall financial health.

Reported Net Profit Margin

The reported net profit margin exhibited a gradual improvement from 23.96% in 2019 to 27.43% in 2023. The margin remained relatively stable between 2021 and 2022 but showed a noticeable increase in 2023. This enhancement in profitability percentage suggests improved operational efficiency or favorable cost management.

Adjusted Net Income Before Allocation to Noncontrolling Interests

The adjusted net income increased from 1,320 million US dollars in 2019 to 2,276 million US dollars in 2023. However, there was a dip in 2022, where adjusted net income declined to 1,765 million US dollars from 1,921 million in 2021. Despite this temporary setback, the adjusted net income rebounded strongly in 2023, reaching the highest value in the observed timeframe.

Adjusted Net Profit Margin

The adjusted net profit margin showed a similar pattern to adjusted net income, improving from 21.09% in 2019 to a peak of 24.7% in 2021, followed by a decline in 2022 to 21.84%. By 2023, the margin recovered considerably to 26.64%. This fluctuation indicates variations in adjusted profitability, with temporary pressures in 2022 but recovery and strengthening profitability in the most recent period.

In summary, the data highlights robust growth in both revenue and net income, consistent improvements in reported profitability margins, and some volatility in adjusted earnings and margins around 2022, followed by a period of recovery and improvement in 2023. The overall financial trajectory is positive, demonstrating effective management of income and costs over the five-year period.

Net Income Trend

Net income attributable to the company showed continuous growth over the five-year period. Starting at 1,500 million US dollars in 2019, it increased steadily each year, reaching 2,344 million US dollars by 2023. This indicates robust profitability improvements over the analyzed timeframe.

Total Equity Development

The total equity also rose from 2,708 million US dollars in 2019 to 4,997 million US dollars in 2023, although there was a slight decline between 2021 and 2022. This overall upward trend reflects accumulation of shareholder value despite minor fluctuations.

Reported Return on Equity (ROE)

Reported ROE demonstrated a downward trend from 55.39% in 2019 to 43.46% in 2020, followed by moderate fluctuations around the mid-40% range. It peaked at 47.99% in 2022 before a slight decline to 46.91% in 2023. This suggests a high but somewhat variable efficiency in generating profit from equity.

Adjusted Net Income Before Allocation

This figure trended upward overall, rising from 1,320 million in 2019 to 2,276 million in 2023, though it experienced a decrease between 2021 and 2022. The adjusted net income exhibits growth in profitability when removing certain allocations, aligning with the net income trend.

Adjusted Total Equity Trend

Adjusted total equity increased similarly to reported total equity, moving from 3,120 million in 2019 to 4,984 million in 2023. Like total equity, it showed a decline from 2021 to 2022, indicating possible adjustments or reserves impacting equity values during that period.

Adjusted Return on Equity (ROE)

Adjusted ROE decreased from 42.31% in 2019 to a low of 37.7% in 2020, then steadily increased again to 45.67% in 2023. This indicates an improvement in adjusted profitability relative to equity after an initial decline, trending towards stronger returns by the final year.

Overall Insights

The company showed consistent growth in both net income and equity over five years, with some variability in equity values around 2021-2022. Profitability as measured by both reported and adjusted ROE was high, though it exhibited fluctuations that may signify changing operational efficiency or accounting adjustments. Adjusted figures generally align with reported metrics, affirming underlying profitability trends despite occasional drops. The data suggests effective value creation with resilience to short-term equity and allocation impacts.

The financial data demonstrates an overall positive trend in profitability metrics for the company over the observed five-year period.

Net Income Attributable to Zoetis Inc.

There is a consistent upward trajectory in net income, increasing from 1,500 million US dollars in 2019 to 2,344 million US dollars in 2023, which reflects a strong growth in earnings.

Total Assets

Total assets experienced growth from 11,545 million US dollars in 2019 to a peak of 14,925 million US dollars in 2022, followed by a slight decrease to 14,286 million US dollars in 2023. This suggests initial expansion and asset accumulation, with a minor contraction in the most recent year.

Reported Return on Assets (ROA)

The reported ROA remained relatively stable between 12.99% in 2019 and 12.04% in 2020, then increased significantly to 14.65% in 2021 and remained elevated at 14.16% in 2022, reaching the highest level of 16.41% in 2023. This indicates improving efficiency in generating profit from the asset base.

Adjusted Net Income Before Allocation to Noncontrolling Interests

The adjusted net income follows a broadly increasing pattern, rising from 1,320 million US dollars in 2019 to 2,276 million US dollars in 2023, with a slight dip in 2022 compared to 2021. This suggests overall strengthening profitability, although with some variability in adjusted earnings in the penultimate year.

Adjusted Total Assets

Adjusted total assets have mirrored the trend in reported total assets, moving from 11,478 million US dollars in 2019 up to 14,771 million US dollars in 2022, then decreasing slightly to 14,098 million US dollars in 2023. This trend underscores the same pattern of asset growth and minor subsequent reduction.

Adjusted Return on Assets (ROA)

The adjusted ROA displays a similar pattern to the reported ROA, starting at 11.5% in 2019, showing minor fluctuations before climbing to a high of 16.14% in 2023. The relative dip to 11.95% in 2022 contrasts with the general upward trend, reflecting a temporary decline in efficiency.

In summary, the company exhibits solid growth in net income and adjusted net income over the period, with improving returns on assets indicative of enhanced profitability and operational efficiency. The asset base expanded substantially through 2022 before slightly contracting, while returns on assets have largely increased, reaching peak values in 2023. Minor fluctuations in adjusted earnings and adjusted ROA in 2022 suggest some transient challenges, but the overall financial performance displays encouraging momentum.