Zoetis Inc. (NYSE:ZTS)

Return on Assets (ROA)

The Return on Assets (ROA) demonstrates a consistent upward trend starting from the first available data point in March 2020, which was 12.99%. Over the subsequent periods, ROA gradually increased, reaching 16.66% by March 2024. Notably, the growth occurred steadily with minor fluctuations, indicating generally improving efficiency in generating profit from assets over the analyzed timeframe.

Financial Leverage

Financial leverage showed a declining trend from March 2019 through the end of 2023. Initially, the ratio was 4.7 in March 2019, decreasing steadily to a low of around 2.78 by December 2023. There was a slight uptick close to early 2024, with the ratio stabilizing near 2.84 in March 2024. This reduction in leverage suggests a gradual decrease in reliance on debt financing over time, potentially indicating a more conservative capital structure.

Return on Equity (ROE)

The Return on Equity (ROE) also increased overall from March 2020 onwards, beginning at 55.39% and peaking near 58.52% in June 2020. Subsequently, it experienced some volatility, with declines up to late 2020, where it fell to 42.36%, before recovering steadily. In the following years, ROE fluctuated between approximately 43% and 48%, ending at 47.27% in March 2024. The pattern reflects sustained strong profitability for shareholders, albeit with some short-term variability linked possibly to operational or market conditions.

Summary Insights

The combined trends suggest an improvement in asset utilization efficiency (ROA) alongside a reduction in financial leverage. The relatively high and somewhat volatile ROE implies that the company maintained strong shareholder returns, while possibly adjusting its funding mix to reduce risk. The alignment of increasing ROA with stable leverage and robust ROE indicates effective management of assets and capital structure to support profitability and long-term financial health.

Net Profit Margin

The net profit margin showed no available data until the quarter ended March 31, 2020, where it started at 23.96%. From that point, a steady upward trend is observable, with the margin generally improving over the subsequent periods. By the most recent data points in 2024, the margin reached approximately 27.38%, indicating an overall strengthening in profitability relative to sales during the observed timeframe.

Asset Turnover

Asset turnover values began reporting from March 31, 2020, starting at 0.54 and demonstrating minor fluctuations across quarters. There was a slight decline to 0.48 by December 31, 2020, followed by a gradual recovery. From 2021 onwards, the ratio mostly trended upward, reaching 0.61 in early 2024. The gradual increase suggests improving efficiency in utilizing assets to generate revenue over the later periods.

Financial Leverage

Financial leverage decreased notably over the entire period from 2019 through 2024. Initial values were high, close to 4.7 in early 2019, and the ratio generally trended downward, reaching levels near 2.84 by the first quarter of 2024. This decline indicates a reduction in the company’s reliance on debt relative to equity, reflecting a more conservative capital structure and potentially lower financial risk over time.

Return on Equity (ROE)

Return on equity data was first reported in March 2020 at 55.39%, followed by fluctuations through the subsequent quarters. Notably, ROE experienced a decline in late 2020, decreasing to 42.36% by December 2021. However, it stabilized and showed some recovery from 2022 onwards, with figures generally oscillating around the mid-40% range. The quarter ending March 2024 registered ROE close to 47.27%, indicating sustained strong profitability for shareholders despite some volatility.

Tax Burden

The tax burden remained relatively stable over the analyzed periods, fluctuating narrowly between 0.78 and 0.84. From the initial available value of 0.83 in March 2020, it gradually decreased to 0.78 by September 2023, signifying a slight reduction in the proportion of earnings paid as tax, with a subsequent minor rebound to 0.8 by March 2024.

Interest Burden

The interest burden exhibited a modest upward trend, starting at 0.89 in March 2020 and steadily increasing to 0.93 by March 2024. This indicates a marginal increase in earnings available after interest expenses, suggesting improved interest expense management or lower debt costs over time.

EBIT Margin

The EBIT margin showed generally positive progression, rising from 32.33% in March 2020 to peak at 37.31% in both September and December 2023. Although a slight decline to 36.9% was observed in March 2024, the overall trend reflects improving operating profitability during the period under review.

Asset Turnover

Asset turnover experienced variability but showed signs of gradual improvement. Initial values were around 0.54–0.55 in early 2020, dipping to a low of 0.48 in December 2019, before climbing steadily to reach 0.61 in March 2024. This suggests enhanced efficiency in using assets to generate revenue, especially in more recent quarters.

Financial Leverage

There was a noticeable reduction in financial leverage from the earlier periods. Starting at 4.7 in March 2019, the ratio generally declined, reaching approximately 2.84 by March 2024. This trend indicates a significant deleveraging effort or reduction in debt relative to equity, contributing to lower financial risk.

Return on Equity (ROE)

ROE values fluctuated considerably, peaking early at 58.52% in June 2020 and then declining to around the low 40% range during late 2020 and 2021. The ratio recovered gradually to stabilize near the mid-40% range and rose to about 47.27% by March 2024. This reflects a resilient and relatively high ability to generate returns for shareholders despite varying operational and leverage conditions.

Net Profit Margin

The net profit margin demonstrates a generally stable upward trend starting from March 2020, with values consistently above 23.9%. The margin has shown mild fluctuations quarterly, ranging from a low near 24.5% to a high around 27.4%. Recent quarters indicate a slight increase, peaking near 27.4% between September and December 2023, followed by a minor decline to 27.38% in March 2024. Overall, the net profit margin reflects sustained profitability with incremental improvements over the observed periods.

Asset Turnover

Asset turnover exhibits a gradual improvement beginning in early 2020, initially fluctuating around 0.48 to 0.55. From mid-2021 onward, this ratio consistently increases, moving from approximately 0.53 to a peak of 0.61 in March 2024. This upward progression indicates an enhanced efficiency in utilizing assets to generate revenue. Despite occasional minor dips, the trend remains positive, suggesting ongoing operational improvements.

Return on Assets (ROA)

ROA shows a steady increase starting in March 2020, rising from about 13% to exceed 16% by late 2023 and early 2024. Although there are short-term variations, the overall trajectory points to stronger asset profitability. Notably, periods of decline are generally followed by quick recoveries, with the ratio reaching its highest levels in the most recent quarters. This pattern aligns with improvements in both net profit margin and asset turnover, underscoring effective management of assets to generate profits.

The analyzed financial data reveals several notable trends across the reported periods, reflecting the company's operational efficiency and profitability dynamics.

Tax Burden

The tax burden ratio has generally displayed a slight declining trajectory over the available periods, starting around 0.83 in early 2020 and gradually decreasing to 0.80 by the latest quarter in 2024. This trend suggests a minor reduction in the proportion of earnings paid as taxes relative to pre-tax income, potentially indicating improved tax efficiency or changes in tax regulations affecting the company.

Interest Burden

The interest burden ratio has maintained a stable and slightly increasing trend from approximately 0.89 in early 2020 to 0.93 by the end of Q1 2024. The incremental rise implies a marginally higher share of earnings retained after interest expenses, which could be attributable to effective debt management or lower borrowing costs over time.

EBIT Margin

The EBIT margin percentage has shown consistent strength and an upward incline, rising from the low thirties in early 2020 (~32.33%) to around 37% in late 2023 and early 2024. This improvement reflects enhanced earnings before interest and taxes as a percentage of revenue, indicating better operational efficiency or favorable pricing environment during the observed timeline.

Asset Turnover

The asset turnover ratio initially fluctuated slightly but demonstrated an improvement in later periods, progressing from roughly 0.54 to around 0.61 by Q1 2024. This indicates improved efficiency in utilizing assets to generate revenues, which may reflect strategic asset management or growth in sales outpacing asset base increases.

Return on Assets (ROA)

The ROA shows a generally positive trend with some fluctuations, starting near 13% in early 2020 and advancing to approximately 16.6% by the first quarter of 2024. The strengthening ROA underlines the company's increasing ability to generate net income relative to its total assets, driven by both margin improvements and enhanced asset utilization.

The financial data reveals several consistent trends in profitability and burden ratios over the examined periods.

Tax Burden

The tax burden ratio exhibits a gradual and slight decrease over time, starting at 0.83 in March 2020 and declining to 0.8 by March 2024. This implies a modest reduction in the proportion of income paid as taxes, indicating improved tax efficiency or potential changes in tax structure or benefits.

Interest Burden

The interest burden ratio remains relatively stable throughout the periods, hovering around 0.9 to 0.93. There is a slight upward trend towards the end of the period, reaching 0.93 in the first quarter of 2024. The stability suggests consistent management of interest expenses relative to earnings before interest and taxes, with a minor improvement in retained earnings after interest payments.

EBIT Margin

The EBIT margin shows a steady upward trend, beginning from around 32.33% in March 2020 and increasing to a peak of approximately 37.31% in September and December 2023. This improvement indicates enhanced operational profitability and efficiency, reflecting either increased revenue, better cost control, or a combination of both. The margin slightly declines to 36.9% by March 2024 but remains significantly higher than at the start of the period.

Net Profit Margin

The net profit margin also demonstrates a positive trend, increasing from approximately 23.96% in March 2020 to around 27.43% in September 2023. Although there is a minor decline to 27.38% in March 2024, the overall increase reflects strengthened bottom-line profitability after accounting for taxes and interest. This consistent growth indicates effective expense management and improved earnings retention.

Overall, the data reflects a firm trajectory of improving profitability metrics with stable tax and interest burdens, suggesting sound financial management and operational performance enhancement over the observed quarters.