Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Zoetis Inc., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
- Debt to Equity
- The debt to equity ratio shows a general decreasing trend from the beginning of the observed period through the end of 2023, declining from 2.35 in March 2020 to 1.29 in September 2023. This indicates a reduction in reliance on debt relative to shareholder equity. There is a slight increase observed in late 2023 and early 2024, stabilizing around 1.3 by March 2024.
- Debt to Equity (Including Operating Lease Liability)
- When including operating lease liabilities, the debt to equity ratio follows a similar decreasing pattern, beginning at 2.41 in March 2020 and decreasing to 1.33 in September 2023 before marginally rising to 1.34 by March 2024. This implies that lease obligations form a consistent part of the company's overall debt structure but have not significantly altered the downward trend.
- Debt to Capital
- This ratio shows a decline over time, starting at 0.70 in March 2020 and reducing to a low of 0.56 by September 2023. The ratio remains relatively stable around this level into early 2024, suggesting improved capitalization and lower leverage within the company’s capital structure.
- Debt to Capital (Including Operating Lease Liability)
- The trend including operating lease liabilities mirrors that of debt to capital, starting at 0.71 and gradually declining to 0.57 by March 2024. This consistency supports that lease liabilities have a steady but not disproportionate impact on the company’s capital structure.
- Debt to Assets
- The debt to assets ratio decreases from 0.56 at the start of the period to approximately 0.46 by the end of the observation. This decline reflects a reduction in the proportion of assets financed by debt, indicating stronger asset backing relative to liabilities over time.
- Debt to Assets (Including Operating Lease Liability)
- Including operating lease liabilities raises the ratio slightly but does not alter the general trend, which declines from 0.57 to 0.47. The ratio remains steady around the 0.47 mark at the later periods, suggesting consistent asset financing practices when accounting for lease obligations.
- Financial Leverage
- Financial leverage exhibits a downward trend from 4.19 in early 2020 to around 2.78-2.86 towards the end of 2023 and early 2024. This decline reflects a reduction in total assets relative to equity, generally signaling decreased financial risk and more conservative balance sheet management.
- Interest Coverage
- The interest coverage ratio shows continuous improvement throughout the period, improving from 9.71 in March 2020 to 13.76 by March 2024. This indicates increased earnings relative to interest expenses, highlighting enhanced capacity to meet interest obligations and suggesting stronger operational profitability or lower financing costs over time.
Debt Ratios
Coverage Ratios
Debt to Equity
Zoetis Inc., debt to equity calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Short-term borrowings | 24) | 3) | 2) | 2) | 3) | 2) | 3) | 2) | —) | —) | —) | 4) | 4) | 4) | 1) | 1) | —) | ||||||
| Current portion of long-term debt | —) | —) | —) | —) | —) | 1,350) | 1,350) | 1,350) | 1,350) | —) | —) | 600) | 600) | 600) | 1,100) | 500) | 500) | ||||||
| Long-term debt, net of discount and issuance costs, excluding current portion | 6,562) | 6,564) | 6,552) | 6,555) | 6,559) | 6,552) | 5,210) | 5,221) | 5,228) | 6,592) | 6,592) | 6,592) | 6,587) | 6,595) | 6,595) | 7,194) | 5,963) | ||||||
| Total debt | 6,586) | 6,567) | 6,554) | 6,557) | 6,562) | 7,904) | 6,563) | 6,573) | 6,578) | 6,592) | 6,592) | 7,196) | 7,191) | 7,199) | 7,696) | 7,695) | 6,463) | ||||||
| Total Zoetis Inc. equity | 5,058) | 4,997) | 5,078) | 4,625) | 4,494) | 4,405) | 4,663) | 4,580) | 4,658) | 4,543) | 4,679) | 4,350) | 4,089) | 3,769) | 3,602) | 2,982) | 2,753) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to equity1 | 1.30 | 1.31 | 1.29 | 1.42 | 1.46 | 1.79 | 1.41 | 1.44 | 1.41 | 1.45 | 1.41 | 1.65 | 1.76 | 1.91 | 2.14 | 2.58 | 2.35 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||
| AbbVie Inc. | 9.24 | 5.73 | 5.02 | 4.74 | 4.68 | 3.67 | 4.35 | 4.98 | 4.51 | 4.98 | 5.96 | 6.53 | 6.24 | — | — | — | — | ||||||
| Amgen Inc. | 12.75 | 10.37 | 7.90 | 9.08 | 11.52 | 10.64 | 10.60 | 15.10 | 40.23 | 4.97 | 4.57 | 3.98 | 3.50 | — | — | — | — | ||||||
| Bristol-Myers Squibb Co. | 3.38 | 1.35 | 1.30 | 1.18 | 1.19 | 1.27 | 1.20 | 1.29 | 1.42 | 1.24 | 1.20 | 1.23 | 1.23 | — | — | — | — | ||||||
| Danaher Corp. | 0.34 | 0.34 | 0.42 | 0.38 | 0.39 | 0.39 | 0.41 | 0.43 | 0.47 | 0.49 | 0.54 | 0.48 | 0.50 | — | — | — | — | ||||||
| Eli Lilly & Co. | 2.05 | 2.34 | 1.80 | 1.70 | 1.69 | 1.52 | 1.58 | 1.97 | 1.77 | 1.88 | 2.20 | 2.56 | 2.35 | — | — | — | — | ||||||
| Gilead Sciences Inc. | 1.44 | 1.09 | 1.12 | 1.19 | 1.20 | 1.19 | 1.20 | 1.30 | 1.32 | 1.27 | 1.29 | 1.53 | 1.59 | — | — | — | — | ||||||
| Johnson & Johnson | 0.48 | 0.43 | 0.42 | 0.61 | 0.75 | 0.52 | 0.43 | 0.43 | 0.44 | 0.46 | 0.48 | 0.48 | 0.51 | — | — | — | — | ||||||
| Merck & Co. Inc. | 0.85 | 0.93 | 0.85 | 0.95 | 0.66 | 0.67 | 0.68 | 0.73 | 0.78 | 0.87 | 0.74 | 0.80 | 1.16 | — | — | — | — | ||||||
| Pfizer Inc. | 0.75 | 0.81 | 0.66 | 0.66 | 0.36 | 0.37 | 0.40 | 0.46 | 0.44 | 0.50 | 0.53 | 0.56 | 0.58 | — | — | — | — | ||||||
| Regeneron Pharmaceuticals Inc. | 0.10 | 0.10 | 0.11 | 0.11 | 0.11 | 0.12 | 0.13 | 0.13 | 0.14 | 0.14 | 0.16 | 0.18 | 0.23 | — | — | — | — | ||||||
| Thermo Fisher Scientific Inc. | 0.78 | 0.75 | 0.78 | 0.78 | 0.83 | 0.78 | 0.67 | 0.72 | 0.81 | 0.85 | 0.56 | 0.51 | 0.53 | — | — | — | — | ||||||
| Vertex Pharmaceuticals Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2024 Calculation
Debt to equity = Total debt ÷ Total Zoetis Inc. equity
= 6,586 ÷ 5,058 = 1.30
2 Click competitor name to see calculations.
- Total Debt
- The total debt of the company showed an initial increase from $6,463 million at the end of Q1 2020 to a peak of approximately $7,696 million in Q3 2020. Following this peak, the debt levels declined somewhat, stabilizing around $6,500 to $6,600 million through most of 2022 and early 2023. A notable jump occurred again at the end of Q4 2022 reaching $7,904 million, but debt quickly returned to previous levels near $6,560 million by early 2024. Overall, total debt fluctuated within a moderate range without significant sustained upward or downward trend after 2020.
- Total Equity
- Total equity steadily increased throughout the period, rising from $2,753 million at Q1 2020 to over $5,000 million by Q1 2024. The growth showed consistent upward movement with occasional slight dips, such as at Q4 2022 when equity declined to $4,405 million from prior higher levels. However, the general trend indicates strengthening shareholder equity, reflecting possibly retained earnings accumulation or equity issuances.
- Debt to Equity Ratio
- The debt to equity ratio demonstrated a notable downward trend from 2.35 in early 2020 to around 1.3 by Q1 2024, indicating an improving capital structure with relatively less reliance on debt compared to equity. After an initial peak at 2.58 in Q2 2020, the ratio consistently trended downwards, with only minor increases. A temporary spike is observed corresponding to the rise in debt in Q4 2022, moving the ratio from around 1.41 to 1.79, but the ratio declined again as equity recovered and debt normalized. By the end of the reporting, the leverage indicator had improved significantly compared to the start of the period.
- Summary
- Over the analyzed periods, the company exhibited a stable debt profile with cyclical fluctuations but no long-term increase in absolute debt levels. Concurrently, equity grew steadily, contributing to a gradual and sustained reduction in leverage. The improving debt to equity ratio reflects an enhanced balance sheet strength and lower financial risk. The temporary disruptions noted around late 2022 suggest some episodic financing or investment activity, but the firm quickly rebalanced its capital structure. Overall, the financial trends indicate prudent debt management alongside sustained equity growth, fostering a stronger financial foundation.
Debt to Equity (including Operating Lease Liability)
Zoetis Inc., debt to equity (including operating lease liability) calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Short-term borrowings | 24) | 3) | 2) | 2) | 3) | 2) | 3) | 2) | —) | —) | —) | 4) | 4) | 4) | 1) | 1) | —) | ||||||
| Current portion of long-term debt | —) | —) | —) | —) | —) | 1,350) | 1,350) | 1,350) | 1,350) | —) | —) | 600) | 600) | 600) | 1,100) | 500) | 500) | ||||||
| Long-term debt, net of discount and issuance costs, excluding current portion | 6,562) | 6,564) | 6,552) | 6,555) | 6,559) | 6,552) | 5,210) | 5,221) | 5,228) | 6,592) | 6,592) | 6,592) | 6,587) | 6,595) | 6,595) | 7,194) | 5,963) | ||||||
| Total debt | 6,586) | 6,567) | 6,554) | 6,557) | 6,562) | 7,904) | 6,563) | 6,573) | 6,578) | 6,592) | 6,592) | 7,196) | 7,191) | 7,199) | 7,696) | 7,695) | 6,463) | ||||||
| Noncurrent operating lease liabilities | 184) | 188) | 191) | 188) | 180) | 186) | 186) | 161) | 158) | 151) | 160) | 147) | 159) | 163) | 167) | 155) | 159) | ||||||
| Total debt (including operating lease liability) | 6,770) | 6,755) | 6,745) | 6,745) | 6,742) | 8,090) | 6,749) | 6,734) | 6,736) | 6,743) | 6,752) | 7,343) | 7,350) | 7,362) | 7,863) | 7,850) | 6,622) | ||||||
| Total Zoetis Inc. equity | 5,058) | 4,997) | 5,078) | 4,625) | 4,494) | 4,405) | 4,663) | 4,580) | 4,658) | 4,543) | 4,679) | 4,350) | 4,089) | 3,769) | 3,602) | 2,982) | 2,753) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to equity (including operating lease liability)1 | 1.34 | 1.35 | 1.33 | 1.46 | 1.50 | 1.84 | 1.45 | 1.47 | 1.45 | 1.48 | 1.44 | 1.69 | 1.80 | 1.95 | 2.18 | 2.63 | 2.41 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||||
| Vertex Pharmaceuticals Inc. | 0.02 | 0.02 | 0.02 | 0.02 | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | 0.04 | 0.04 | 0.04 | 0.04 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2024 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Zoetis Inc. equity
= 6,770 ÷ 5,058 = 1.34
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt displayed fluctuations over the analyzed period. Beginning at $6,622 million in March 2020, it peaked at $8,090 million in December 2022. After this peak, the debt remained relatively stable around the $6,700 million range through to March 2024, indicating a tendency to maintain debt levels after the substantial increase late in 2022.
- Total Equity
- Total equity showed a steady upward trend from $2,753 million in March 2020 to reach $5,078 million in September 2023, with a subsequent slight decrease to $5,058 million by March 2024. This consistent growth in equity suggests ongoing retention of earnings or capital inflows over the period, reflecting improving shareholder value.
- Debt to Equity Ratio (Including Operating Lease Liability)
- The debt to equity ratio began at a relatively high level of 2.41 in March 2020, indicating that debt was more than twice the equity. This ratio declined significantly, reaching a low of 1.33 in September 2023, reflecting a more balanced capital structure with proportionally less debt relative to equity. The ratio then slightly increased to approximately 1.34 by March 2024. The mid-period increase in debt around December 2022 coincided with a temporary rise in this ratio to 1.84, indicating a period of increased leverage before returning to a more conservative level.
- Summary of Trends and Insights
- Overall, the data illustrates a trend towards strengthening equity positions combined with a controlled approach to debt levels. The general decline in the debt to equity ratio over the four years suggests improved financial stability and a reduced reliance on external borrowing relative to shareholders' resources. The spike in debt at the end of 2022, with a corresponding increase in leverage, may indicate strategic financing activities or investments, followed by a rebalancing phase. The equity growth supports an interpretation of sustained profitability or capital gains, contributing to a more robust financial foundation.
Debt to Capital
Zoetis Inc., debt to capital calculation (quarterly data)
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Short-term borrowings | 24) | 3) | 2) | 2) | 3) | 2) | 3) | 2) | —) | —) | —) | 4) | 4) | 4) | 1) | 1) | —) | ||||||
| Current portion of long-term debt | —) | —) | —) | —) | —) | 1,350) | 1,350) | 1,350) | 1,350) | —) | —) | 600) | 600) | 600) | 1,100) | 500) | 500) | ||||||
| Long-term debt, net of discount and issuance costs, excluding current portion | 6,562) | 6,564) | 6,552) | 6,555) | 6,559) | 6,552) | 5,210) | 5,221) | 5,228) | 6,592) | 6,592) | 6,592) | 6,587) | 6,595) | 6,595) | 7,194) | 5,963) | ||||||
| Total debt | 6,586) | 6,567) | 6,554) | 6,557) | 6,562) | 7,904) | 6,563) | 6,573) | 6,578) | 6,592) | 6,592) | 7,196) | 7,191) | 7,199) | 7,696) | 7,695) | 6,463) | ||||||
| Total Zoetis Inc. equity | 5,058) | 4,997) | 5,078) | 4,625) | 4,494) | 4,405) | 4,663) | 4,580) | 4,658) | 4,543) | 4,679) | 4,350) | 4,089) | 3,769) | 3,602) | 2,982) | 2,753) | ||||||
| Total capital | 11,644) | 11,564) | 11,632) | 11,182) | 11,056) | 12,309) | 11,226) | 11,153) | 11,236) | 11,135) | 11,271) | 11,546) | 11,280) | 10,968) | 11,298) | 10,677) | 9,216) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to capital1 | 0.57 | 0.57 | 0.56 | 0.59 | 0.59 | 0.64 | 0.58 | 0.59 | 0.59 | 0.59 | 0.58 | 0.62 | 0.64 | 0.66 | 0.68 | 0.72 | 0.70 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||
| AbbVie Inc. | 0.90 | 0.85 | 0.83 | 0.83 | 0.82 | 0.79 | 0.81 | 0.83 | 0.82 | 0.83 | 0.86 | 0.87 | 0.86 | — | — | — | — | ||||||
| Amgen Inc. | 0.93 | 0.91 | 0.89 | 0.90 | 0.92 | 0.91 | 0.91 | 0.94 | 0.98 | 0.83 | 0.82 | 0.80 | 0.78 | — | — | — | — | ||||||
| Bristol-Myers Squibb Co. | 0.77 | 0.57 | 0.56 | 0.54 | 0.54 | 0.56 | 0.54 | 0.56 | 0.59 | 0.55 | 0.55 | 0.55 | 0.55 | — | — | — | — | ||||||
| Danaher Corp. | 0.25 | 0.26 | 0.30 | 0.28 | 0.28 | 0.28 | 0.29 | 0.30 | 0.32 | 0.33 | 0.35 | 0.32 | 0.33 | — | — | — | — | ||||||
| Eli Lilly & Co. | 0.67 | 0.70 | 0.64 | 0.63 | 0.63 | 0.60 | 0.61 | 0.66 | 0.64 | 0.65 | 0.69 | 0.72 | 0.70 | — | — | — | — | ||||||
| Gilead Sciences Inc. | 0.59 | 0.52 | 0.53 | 0.54 | 0.55 | 0.54 | 0.54 | 0.56 | 0.57 | 0.56 | 0.56 | 0.60 | 0.61 | — | — | — | — | ||||||
| Johnson & Johnson | 0.32 | 0.30 | 0.30 | 0.38 | 0.43 | 0.34 | 0.30 | 0.30 | 0.31 | 0.31 | 0.33 | 0.32 | 0.34 | — | — | — | — | ||||||
| Merck & Co. Inc. | 0.46 | 0.48 | 0.46 | 0.49 | 0.40 | 0.40 | 0.41 | 0.42 | 0.44 | 0.46 | 0.42 | 0.44 | 0.54 | — | — | — | — | ||||||
| Pfizer Inc. | 0.43 | 0.45 | 0.40 | 0.40 | 0.26 | 0.27 | 0.28 | 0.32 | 0.31 | 0.33 | 0.35 | 0.36 | 0.37 | — | — | — | — | ||||||
| Regeneron Pharmaceuticals Inc. | 0.09 | 0.09 | 0.10 | 0.10 | 0.10 | 0.11 | 0.11 | 0.12 | 0.12 | 0.13 | 0.14 | 0.15 | 0.18 | — | — | — | — | ||||||
| Thermo Fisher Scientific Inc. | 0.44 | 0.43 | 0.44 | 0.44 | 0.45 | 0.44 | 0.40 | 0.42 | 0.45 | 0.46 | 0.36 | 0.34 | 0.35 | — | — | — | — | ||||||
| Vertex Pharmaceuticals Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= 6,586 ÷ 11,644 = 0.57
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited an initial increase from approximately 6.46 billion USD at the end of Q1 2020 to a peak near 7.7 billion USD in Q2 and Q3 2020. Following this peak, the level of debt generally declined through late 2021, reaching around 6.59 billion USD at the end of that year. Debt levels remained relatively stable near 6.57 billion USD through most of 2022, except for a notable rise to approximately 7.9 billion USD in Q4 2022. Subsequently, the debt amount returned to a lower range near 6.56 to 6.58 billion USD through Q1 2024, indicating a general trend of moderation in borrowing after the spike.
- Total Capital
- Total capital increased steadily from about 9.22 billion USD in Q1 2020 to a high point above 12.3 billion USD at Q4 2022, reflecting growth in the overall capital base. Thereafter, total capital decreased somewhat but remained near the 11 to 11.6 billion USD range through early 2024. This pattern suggests ongoing capital accumulation over the longer term with some variability in the most recent quarters.
- Debt to Capital Ratio
- The debt to capital ratio was highest in mid-2020 at approximately 0.72 and decreased steadily through 2021 to a low around 0.56 by Q3 2023. The ratio experienced a temporary increase to about 0.64 at the end of 2022, coinciding with the spike in total debt. Following this, the ratio corrected downward to stabilize near 0.57 by Q1 2024. Overall, the trend indicates an improving balance between debt and capital over the analyzed period, with a moderate rise in leverage during late 2022 before returning to lower leverage levels.
- Summary
- In summary, the company demonstrated a considerable increase in debt during early 2020, followed by a reduction and subsequent stabilization through 2021 and 2022. The temporary increase in debt and leverage in late 2022 was subsequently reversed. Total capital showed consistent growth with some recent fluctuations. The debt to capital ratio trends indicate a gradual reduction in leverage risk, reflecting a stronger capital structure over time despite short-term variations.
Debt to Capital (including Operating Lease Liability)
Zoetis Inc., debt to capital (including operating lease liability) calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Short-term borrowings | 24) | 3) | 2) | 2) | 3) | 2) | 3) | 2) | —) | —) | —) | 4) | 4) | 4) | 1) | 1) | —) | ||||||
| Current portion of long-term debt | —) | —) | —) | —) | —) | 1,350) | 1,350) | 1,350) | 1,350) | —) | —) | 600) | 600) | 600) | 1,100) | 500) | 500) | ||||||
| Long-term debt, net of discount and issuance costs, excluding current portion | 6,562) | 6,564) | 6,552) | 6,555) | 6,559) | 6,552) | 5,210) | 5,221) | 5,228) | 6,592) | 6,592) | 6,592) | 6,587) | 6,595) | 6,595) | 7,194) | 5,963) | ||||||
| Total debt | 6,586) | 6,567) | 6,554) | 6,557) | 6,562) | 7,904) | 6,563) | 6,573) | 6,578) | 6,592) | 6,592) | 7,196) | 7,191) | 7,199) | 7,696) | 7,695) | 6,463) | ||||||
| Noncurrent operating lease liabilities | 184) | 188) | 191) | 188) | 180) | 186) | 186) | 161) | 158) | 151) | 160) | 147) | 159) | 163) | 167) | 155) | 159) | ||||||
| Total debt (including operating lease liability) | 6,770) | 6,755) | 6,745) | 6,745) | 6,742) | 8,090) | 6,749) | 6,734) | 6,736) | 6,743) | 6,752) | 7,343) | 7,350) | 7,362) | 7,863) | 7,850) | 6,622) | ||||||
| Total Zoetis Inc. equity | 5,058) | 4,997) | 5,078) | 4,625) | 4,494) | 4,405) | 4,663) | 4,580) | 4,658) | 4,543) | 4,679) | 4,350) | 4,089) | 3,769) | 3,602) | 2,982) | 2,753) | ||||||
| Total capital (including operating lease liability) | 11,828) | 11,752) | 11,823) | 11,370) | 11,236) | 12,495) | 11,412) | 11,314) | 11,394) | 11,286) | 11,431) | 11,693) | 11,439) | 11,131) | 11,465) | 10,832) | 9,375) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to capital (including operating lease liability)1 | 0.57 | 0.57 | 0.57 | 0.59 | 0.60 | 0.65 | 0.59 | 0.60 | 0.59 | 0.60 | 0.59 | 0.63 | 0.64 | 0.66 | 0.69 | 0.72 | 0.71 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||||
| Vertex Pharmaceuticals Inc. | 0.02 | 0.02 | 0.02 | 0.02 | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | 0.04 | 0.04 | 0.04 | 0.04 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2024 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 6,770 ÷ 11,828 = 0.57
2 Click competitor name to see calculations.
The analyzed financial data reveals several trends regarding the company's capital structure, focusing on total debt, total capital, and the debt-to-capital ratio over consecutive quarterly periods from March 2020 through March 2024.
- Total Debt (including operating lease liability)
- The total debt demonstrated an initial increase from 6,622 million USD in March 2020 to a peak near 7,850 million USD by June 2020, indicating a rise in leverage during the early stages of the analysis period. Subsequently, the debt level stabilized and even showed moderate declines in the following quarters, fluctuating mostly in the 6,700 to 6,800 million USD range. Notably, there was a significant spike to 8,090 million USD in December 2022, which represents an outlier compared with the otherwise stable trend. After this peak, the debt returned to previous levels around 6,700 million USD and remained relatively steady through March 2024.
- Total Capital (including operating lease liability)
- Total capital increased steadily from 9,375 million USD in March 2020 to a higher level close to 11,832 million USD by March 2024. The growth in total capital, although somewhat volatile, shows a general upward trajectory, with some periods of consolidation or minor retractions, notably around late 2020 and early 2022. The highest capital figure recorded was nearly 12,495 million USD in December 2022, which coincides with the peak period in debt, indicating a possible capital structure adjustment during that quarter.
- Debt-to-Capital Ratio (including operating lease liability)
- The debt-to-capital ratio exhibited a declining trend over the observed period, decreasing from 0.71 in March 2020 to 0.57 by March 2024. This decline reflects a relative reduction in the proportion of debt financing within the overall capital structure. The ratio showed some fluctuations, including a decrease to as low as approximately 0.57 by late 2023 and early 2024. However, there is a notable temporary increase to 0.65 in December 2022, aligning with the spike in debt and capital during the same period, suggesting a brief increase in leverage which was then reversed in subsequent quarters.
In summary, the company maintained a fairly stable capital structure with moderate debt levels relative to total capital over the four-year period. Despite some temporary increases in debt and corresponding capital levels, the overall leverage, as measured by the debt-to-capital ratio, has trended downward, indicating a possible strategic move towards lower financial risk. The stability in debt levels, coupled with steady growth in total capital, suggests a controlled and balanced approach to financing.
Debt to Assets
Zoetis Inc., debt to assets calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Short-term borrowings | 24) | 3) | 2) | 2) | 3) | 2) | 3) | 2) | —) | —) | —) | 4) | 4) | 4) | 1) | 1) | —) | ||||||
| Current portion of long-term debt | —) | —) | —) | —) | —) | 1,350) | 1,350) | 1,350) | 1,350) | —) | —) | 600) | 600) | 600) | 1,100) | 500) | 500) | ||||||
| Long-term debt, net of discount and issuance costs, excluding current portion | 6,562) | 6,564) | 6,552) | 6,555) | 6,559) | 6,552) | 5,210) | 5,221) | 5,228) | 6,592) | 6,592) | 6,592) | 6,587) | 6,595) | 6,595) | 7,194) | 5,963) | ||||||
| Total debt | 6,586) | 6,567) | 6,554) | 6,557) | 6,562) | 7,904) | 6,563) | 6,573) | 6,578) | 6,592) | 6,592) | 7,196) | 7,191) | 7,199) | 7,696) | 7,695) | 6,463) | ||||||
| Total assets | 14,348) | 14,286) | 14,106) | 13,749) | 13,754) | 14,925) | 13,674) | 13,770) | 13,860) | 13,900) | 13,705) | 14,069) | 13,796) | 13,609) | 13,725) | 13,069) | 11,528) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to assets1 | 0.46 | 0.46 | 0.46 | 0.48 | 0.48 | 0.53 | 0.48 | 0.48 | 0.47 | 0.47 | 0.48 | 0.51 | 0.52 | 0.53 | 0.56 | 0.59 | 0.56 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||
| AbbVie Inc. | 0.50 | 0.44 | 0.45 | 0.45 | 0.46 | 0.46 | 0.49 | 0.51 | 0.51 | 0.52 | 0.54 | 0.56 | 0.57 | — | — | — | — | ||||||
| Amgen Inc. | 0.69 | 0.67 | 0.67 | 0.68 | 0.69 | 0.60 | 0.61 | 0.62 | 0.62 | 0.54 | 0.58 | 0.55 | 0.52 | — | — | — | — | ||||||
| Bristol-Myers Squibb Co. | 0.56 | 0.42 | 0.41 | 0.40 | 0.40 | 0.41 | 0.40 | 0.42 | 0.44 | 0.41 | 0.40 | 0.41 | 0.41 | — | — | — | — | ||||||
| Danaher Corp. | 0.22 | 0.22 | 0.25 | 0.23 | 0.23 | 0.23 | 0.24 | 0.25 | 0.26 | 0.27 | 0.29 | 0.26 | 0.27 | — | — | — | — | ||||||
| Eli Lilly & Co. | 0.41 | 0.39 | 0.35 | 0.34 | 0.36 | 0.33 | 0.33 | 0.36 | 0.35 | 0.35 | 0.35 | 0.35 | 0.35 | — | — | — | — | ||||||
| Gilead Sciences Inc. | 0.45 | 0.40 | 0.40 | 0.40 | 0.41 | 0.40 | 0.40 | 0.42 | 0.42 | 0.39 | 0.41 | 0.44 | 0.45 | — | — | — | — | ||||||
| Johnson & Johnson | 0.20 | 0.18 | 0.18 | 0.24 | 0.27 | 0.21 | 0.18 | 0.18 | 0.19 | 0.19 | 0.19 | 0.19 | 0.19 | — | — | — | — | ||||||
| Merck & Co. Inc. | 0.32 | 0.33 | 0.33 | 0.35 | 0.29 | 0.28 | 0.28 | 0.30 | 0.30 | 0.31 | 0.28 | 0.29 | 0.34 | — | — | — | — | ||||||
| Pfizer Inc. | 0.31 | 0.32 | 0.30 | 0.30 | 0.18 | 0.18 | 0.19 | 0.21 | 0.20 | 0.21 | 0.22 | 0.23 | 0.25 | — | — | — | — | ||||||
| Regeneron Pharmaceuticals Inc. | 0.08 | 0.08 | 0.08 | 0.09 | 0.09 | 0.09 | 0.10 | 0.10 | 0.10 | 0.11 | 0.11 | 0.13 | 0.15 | — | — | — | — | ||||||
| Thermo Fisher Scientific Inc. | 0.37 | 0.35 | 0.36 | 0.36 | 0.37 | 0.35 | 0.32 | 0.33 | 0.36 | 0.37 | 0.29 | 0.28 | 0.28 | — | — | — | — | ||||||
| Vertex Pharmaceuticals Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= 6,586 ÷ 14,348 = 0.46
2 Click competitor name to see calculations.
- Total Debt
- The total debt experienced fluctuations over the reported periods. It initially increased from 6,463 million USD at the first quarter of 2020 to a peak around 7,696 million USD by the third quarter of 2020. After this peak, total debt generally decreased and stabilized near 6,592 million USD by the end of 2021. During 2022, debt remained relatively steady, though it showed a notable rise reaching 7,904 million USD by the fourth quarter. In 2023 and early 2024, total debt resumed its stable trend around the mid-6,500 million USD range, demonstrating resilience with minor variations.
- Total Assets
- Total assets showed a steady growing trend throughout the observed periods. Starting from 11,528 million USD in the first quarter of 2020, assets increased to approximately 13,725 million USD by the third quarter of 2020 and hovered around this level until late 2020. From 2021 onwards, assets generally trended upward with slight quarter-to-quarter fluctuations, reaching a peak of 14,925 million USD at the fourth quarter of 2022. Subsequently, assets stabilized and modestly increased further, reaching 14,348 million USD by the first quarter of 2024.
- Debt to Assets Ratio
- The debt-to-assets ratio demonstrated an overall declining trend from 0.56 at the beginning of 2020 to approximately 0.46 by early 2024. This decline reflects a reduction in financial leverage relative to asset growth. Initial volatility was observed early in the period, peaking near 0.59 by mid-2020, but subsequently, the ratio steadily decreased with minor fluctuations, supporting an improved balance sheet position. A temporary increase near the end of 2022 corresponds with the period of heightened total debt, but the ratio quickly returned to its downward path thereafter.
- Summary
- The data reveals that while total debt experienced variability with short-term increases, the company's total assets have consistently grown over the timeframe. This growth in assets outpaced debt increases, resulting in a gradual reduction in the debt-to-assets ratio. The pattern suggests a strengthening financial position with improved asset coverage for liabilities, indicative of prudent management of financial leverage and resources.
Debt to Assets (including Operating Lease Liability)
Zoetis Inc., debt to assets (including operating lease liability) calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Short-term borrowings | 24) | 3) | 2) | 2) | 3) | 2) | 3) | 2) | —) | —) | —) | 4) | 4) | 4) | 1) | 1) | —) | ||||||
| Current portion of long-term debt | —) | —) | —) | —) | —) | 1,350) | 1,350) | 1,350) | 1,350) | —) | —) | 600) | 600) | 600) | 1,100) | 500) | 500) | ||||||
| Long-term debt, net of discount and issuance costs, excluding current portion | 6,562) | 6,564) | 6,552) | 6,555) | 6,559) | 6,552) | 5,210) | 5,221) | 5,228) | 6,592) | 6,592) | 6,592) | 6,587) | 6,595) | 6,595) | 7,194) | 5,963) | ||||||
| Total debt | 6,586) | 6,567) | 6,554) | 6,557) | 6,562) | 7,904) | 6,563) | 6,573) | 6,578) | 6,592) | 6,592) | 7,196) | 7,191) | 7,199) | 7,696) | 7,695) | 6,463) | ||||||
| Noncurrent operating lease liabilities | 184) | 188) | 191) | 188) | 180) | 186) | 186) | 161) | 158) | 151) | 160) | 147) | 159) | 163) | 167) | 155) | 159) | ||||||
| Total debt (including operating lease liability) | 6,770) | 6,755) | 6,745) | 6,745) | 6,742) | 8,090) | 6,749) | 6,734) | 6,736) | 6,743) | 6,752) | 7,343) | 7,350) | 7,362) | 7,863) | 7,850) | 6,622) | ||||||
| Total assets | 14,348) | 14,286) | 14,106) | 13,749) | 13,754) | 14,925) | 13,674) | 13,770) | 13,860) | 13,900) | 13,705) | 14,069) | 13,796) | 13,609) | 13,725) | 13,069) | 11,528) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to assets (including operating lease liability)1 | 0.47 | 0.47 | 0.48 | 0.49 | 0.49 | 0.54 | 0.49 | 0.49 | 0.49 | 0.49 | 0.49 | 0.52 | 0.53 | 0.54 | 0.57 | 0.60 | 0.57 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||||
| Vertex Pharmaceuticals Inc. | 0.02 | 0.02 | 0.02 | 0.02 | 0.02 | 0.02 | 0.02 | 0.02 | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2024 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 6,770 ÷ 14,348 = 0.47
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
-
The total debt displayed a fluctuating pattern over the observed periods. Initially, there was a marked increase from 6,622 million USD at the end of March 2020 to a peak of 7,850 million USD by June 2020. This peak was sustained lightly through September 2020 before gradually declining to around 6,743 million USD by December 2021.
From December 2021 to December 2022, total debt rose sharply again, reaching 8,090 million USD, the highest figure in the recorded timeframe. Following this spike, debt levels decreased significantly through 2023, stabilizing near 6,755 million USD to 6,770 million USD by March 2024.
- Total Assets
-
Total assets experienced a generally increasing trend across the periods. Beginning at 11,528 million USD in March 2020, total assets rose consistently to 13,725 million USD by September 2020 and maintained a slow upward trajectory, albeit with some fluctuations, reaching 14,900 million USD in December 2022.
Post-December 2022, asset levels showed slight variations but overall displayed gradual growth, culminating at 14,348 million USD by March 2024. This growth trend suggests ongoing asset accumulation or appreciation over time.
- Debt to Assets Ratio (including operating lease liability)
-
The debt to assets ratio exhibited a downward trend with some volatility. Initially high at 0.57 in March 2020, it increased to 0.60 by June 2020 before steadily declining to approximately 0.49 by December 2021. This reduction indicates an improvement in the company's leverage position over this period, reflecting greater asset base relative to debt.
However, a reversal occurred around December 2022 when the ratio rose sharply to 0.54, corresponding with the notable debt increase during this time. Subsequently, the ratio resumed a downward trend, reaching 0.47 by March 2024, reflecting decreasing leverage and improved balance sheet strength towards the end of the period.
- Summary of Financial Position Trends
-
Overall, the financial data reveal a company that has managed fluctuating debt levels while generally increasing total assets. The periods of elevated debt correspond with upticks in the debt to assets ratio, signaling higher leverage during those times. The company has demonstrated capacity to reduce its leverage following peaks, as evidenced by the falling debt to assets ratio after December 2022.
The stability and growth in total assets alongside a moderate recent decline in leverage suggest an improving financial position, with the firm balancing debt management and asset growth effectively. The fluctuations in debt may indicate strategic borrowing or refinancing activities aligned with business needs.
Financial Leverage
Zoetis Inc., financial leverage calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Total assets | 14,348) | 14,286) | 14,106) | 13,749) | 13,754) | 14,925) | 13,674) | 13,770) | 13,860) | 13,900) | 13,705) | 14,069) | 13,796) | 13,609) | 13,725) | 13,069) | 11,528) | ||||||
| Total Zoetis Inc. equity | 5,058) | 4,997) | 5,078) | 4,625) | 4,494) | 4,405) | 4,663) | 4,580) | 4,658) | 4,543) | 4,679) | 4,350) | 4,089) | 3,769) | 3,602) | 2,982) | 2,753) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Financial leverage1 | 2.84 | 2.86 | 2.78 | 2.97 | 3.06 | 3.39 | 2.93 | 3.01 | 2.98 | 3.06 | 2.93 | 3.23 | 3.37 | 3.61 | 3.81 | 4.38 | 4.19 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||
| AbbVie Inc. | 18.59 | 13.00 | 11.26 | 10.52 | 10.14 | 8.04 | 8.84 | 9.77 | 8.80 | 9.51 | 10.99 | 11.77 | 10.98 | — | — | — | — | ||||||
| Amgen Inc. | 18.51 | 15.59 | 11.83 | 13.31 | 16.59 | 17.79 | 17.44 | 24.51 | 64.62 | 9.13 | 7.91 | 7.25 | 6.70 | — | — | — | — | ||||||
| Bristol-Myers Squibb Co. | 6.01 | 3.23 | 3.15 | 2.92 | 2.96 | 3.12 | 3.01 | 3.08 | 3.26 | 3.04 | 2.98 | 3.01 | 2.99 | — | — | — | — | ||||||
| Danaher Corp. | 1.56 | 1.58 | 1.67 | 1.64 | 1.65 | 1.68 | 1.72 | 1.76 | 1.80 | 1.84 | 1.90 | 1.82 | 1.87 | — | — | — | — | ||||||
| Eli Lilly & Co. | 4.99 | 5.94 | 5.16 | 4.95 | 4.75 | 4.65 | 4.71 | 5.51 | 5.03 | 5.44 | 6.21 | 7.42 | 6.79 | — | — | — | — | ||||||
| Gilead Sciences Inc. | 3.21 | 2.72 | 2.80 | 2.95 | 2.95 | 2.97 | 2.97 | 3.11 | 3.17 | 3.23 | 3.13 | 3.45 | 3.56 | — | — | — | — | ||||||
| Johnson & Johnson | 2.46 | 2.44 | 2.33 | 2.55 | 2.77 | 2.44 | 2.35 | 2.33 | 2.39 | 2.46 | 2.55 | 2.54 | 2.62 | — | — | — | — | ||||||
| Merck & Co. Inc. | 2.62 | 2.84 | 2.59 | 2.70 | 2.30 | 2.37 | 2.41 | 2.48 | 2.61 | 2.77 | 2.61 | 2.72 | 3.37 | — | — | — | — | ||||||
| Pfizer Inc. | 2.40 | 2.54 | 2.22 | 2.22 | 1.94 | 2.06 | 2.10 | 2.24 | 2.23 | 2.35 | 2.37 | 2.43 | 2.31 | — | — | — | — | ||||||
| Regeneron Pharmaceuticals Inc. | 1.27 | 1.27 | 1.29 | 1.28 | 1.28 | 1.29 | 1.29 | 1.32 | 1.32 | 1.36 | 1.37 | 1.42 | 1.48 | — | — | — | — | ||||||
| Thermo Fisher Scientific Inc. | 2.13 | 2.11 | 2.14 | 2.15 | 2.24 | 2.21 | 2.08 | 2.14 | 2.26 | 2.33 | 1.90 | 1.84 | 1.88 | — | — | — | — | ||||||
| Vertex Pharmaceuticals Inc. | 1.29 | 1.29 | 1.32 | 1.32 | 1.31 | 1.30 | 1.28 | 1.31 | 1.31 | 1.33 | 1.32 | 1.33 | 1.35 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2024 Calculation
Financial leverage = Total assets ÷ Total Zoetis Inc. equity
= 14,348 ÷ 5,058 = 2.84
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends and variations in the key balance sheet items over the reported periods.
- Total Assets (US$ in millions)
- The total assets showed a general upward trend from March 2020 through December 2023, increasing from 11,528 million to 14,106 million. This represents a steady expansion over almost four years. Notable is the dip in total assets from March 2023 (13,754 million) to June 2023 (13,749 million), which is marginal but breaks the consistent upward movement. Following this period, assets rose again towards March 2024, reaching 14,348 million, the highest recorded value in the dataset. The asset base remained relatively stable with minor fluctuations, indicating consistent investment or asset accumulation.
- Total Equity (US$ in millions)
- Total equity increased substantially over the observation period, growing from 2,753 million in March 2020 to 5,058 million by March 2024. This doubling of equity suggests ongoing profitability and/or capital infusion over time. There were some fluctuations within the quarters, such as a decrease from 4,679 million in September 2021 to 4,543 million in December 2021, and from 4,663 million in December 2022 to 4,405 million in March 2023. However, the overall trajectory remained positive, emphasizing a strengthening of the equity position.
- Financial Leverage (Ratio)
- The financial leverage ratio steadily declined from a high of 4.38 in June 2020 to around the 2.8 to 3.0 range in the latest periods. The initial ratio above 4 indicated higher reliance on debt relative to equity, but the decreasing trend demonstrates a gradual deleveraging or increase in equity relative to liabilities. The lowest recorded leverage was 2.78 in September 2023. A slight uptick to 2.86 and 2.84 in December 2023 and March 2024 respectively suggests some recent increase in leverage but overall the company maintained a lower and more conservative leverage ratio compared to the earlier quarters.
In summary, the company exhibits a pattern of growth in total assets and equity capital over the four-year period, reflecting expansion and value retention. Concurrently, the reduction in financial leverage indicates a move towards a more solid capital structure with less dependency on debt. Minor quarterly fluctuations are present but do not significantly alter the underlying trends of asset growth, equity enhancement, and conservative financial gearing.
Interest Coverage
Zoetis Inc., interest coverage calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Net income attributable to Zoetis Inc. | 599) | 525) | 596) | 671) | 552) | 461) | 529) | 529) | 595) | 414) | 552) | 512) | 559) | 359) | 479) | 377) | 423) | ||||||
| Add: Net income attributable to noncontrolling interest | —) | (2) | —) | (1) | (1) | (1) | (1) | —) | (1) | (1) | —) | (1) | (1) | (1) | —) | (1) | —) | ||||||
| Add: Income tax expense | 148) | 127) | 121) | 202) | 146) | 132) | 139) | 141) | 133) | 93) | 107) | 125) | 129) | 62) | 118) | 106) | 74) | ||||||
| Add: Interest expense, net of capitalized interest | 58) | 59) | 59) | 58) | 63) | 62) | 53) | 53) | 53) | 54) | 56) | 57) | 57) | 58) | 62) | 58) | 53) | ||||||
| Earnings before interest and tax (EBIT) | 805) | 709) | 776) | 930) | 760) | 654) | 720) | 723) | 780) | 560) | 715) | 693) | 744) | 478) | 659) | 540) | 550) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Interest coverage1 | 13.76 | 13.28 | 12.89 | 12.98 | 12.37 | 13.02 | 13.07 | 12.86 | 12.49 | 12.11 | 11.54 | 11.00 | 10.30 | 9.64 | 9.79 | 9.72 | 9.71 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||
| Amgen Inc. | 2.38 | 3.73 | 4.54 | 5.43 | 6.51 | 6.22 | 6.83 | 6.97 | 6.40 | 6.60 | 6.46 | 6.48 | 7.64 | — | — | — | — | ||||||
| Danaher Corp. | 17.81 | 18.64 | 23.66 | 29.65 | 35.60 | 40.30 | 41.32 | 35.26 | 33.54 | 32.92 | 28.74 | 25.87 | 21.54 | — | — | — | — | ||||||
| Gilead Sciences Inc. | 2.11 | 8.27 | 8.88 | 9.03 | 8.84 | 7.22 | 5.80 | 6.73 | 6.97 | 9.27 | 10.06 | 7.61 | 2.93 | — | — | — | — | ||||||
| Johnson & Johnson | 29.06 | 20.51 | 19.09 | 23.89 | 31.49 | 79.71 | 141.63 | 160.27 | 164.15 | 125.46 | 94.27 | 87.06 | 73.87 | — | — | — | — | ||||||
| Regeneron Pharmaceuticals Inc. | 57.85 | 58.52 | 61.70 | 69.61 | 73.97 | 82.80 | 108.62 | 116.35 | 163.24 | 163.75 | 139.74 | 104.12 | 68.20 | — | — | — | — | ||||||
| Thermo Fisher Scientific Inc. | 5.53 | 5.54 | 5.98 | 6.64 | 8.28 | 11.56 | 13.59 | 15.70 | 16.73 | 17.49 | 19.94 | 19.52 | 17.58 | — | — | — | — | ||||||
| Vertex Pharmaceuticals Inc. | 111.61 | 100.32 | 96.54 | 90.90 | 82.27 | 78.23 | 70.08 | 66.72 | 48.17 | 45.40 | 44.83 | 40.33 | 55.95 | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2024 Calculation
Interest coverage
= (EBITQ1 2024
+ EBITQ4 2023
+ EBITQ3 2023
+ EBITQ2 2023)
÷ (Interest expenseQ1 2024
+ Interest expenseQ4 2023
+ Interest expenseQ3 2023
+ Interest expenseQ2 2023)
= (805 + 709 + 776 + 930)
÷ (58 + 59 + 59 + 58)
= 13.76
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT displayed notable fluctuations throughout the observed periods. Initially, there was a decline from 550 million US dollars in March 2020 to 478 million in December 2020. This was followed by a marked recovery and growth phase, reaching a peak of 780 million in March 2022. Subsequently, EBIT experienced some volatility with values generally staying above 700 million, except for a dip in December 2022 to 654 million. The latest data point in March 2024 shows EBIT at 805 million, indicating a strong upward trend in recent quarters.
- Interest expense, net of capitalized interest
- Interest expenses remained relatively stable over the entire period, fluctuating narrowly between 53 and 63 million US dollars. There was no significant upward or downward trend observed in the interest expense, suggesting effective control of debt-related costs or consistent financing conditions.
- Interest coverage ratio
- The interest coverage ratio exhibited a consistent improvement over time. Starting from approximately 9.7 in early 2020, it increased steadily to reach 13.76 by March 2024. This indicates that EBIT has grown at a faster rate than interest expenses, enhancing the company’s ability to cover its interest obligations comfortably. The rising ratio is a positive indicator of financial health and reduced interest risk.