Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Enterprise Value to EBITDA (EV/EBITDA)
- Return on Equity (ROE) since 2012
- Total Asset Turnover since 2012
- Price to Sales (P/S) since 2012
- Analysis of Revenues
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Profitability Ratios (Summary)
Zoetis Inc., profitability ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Gross Profit Margin
- The gross profit margin displayed a gradual upward trend over the period from 2019 to 2023. Starting at 68.18% in 2019, it increased slightly every year except for a marginal decline in 2022, reaching 70.03% in 2023. This indicates consistent efficiency in managing production costs relative to sales.
- Operating Profit Margin
- The operating profit margin followed a positive trajectory, increasing steadily from 31.42% in 2019 to a peak of 36.10% in 2022. In 2023, there was a slight decline to 35.30%, but it remained significantly higher compared to the initial years. This trend suggests improved control over operating expenses and stronger operational profitability.
- Net Profit Margin
- Net profit margin showed a consistent upward movement, rising from 23.96% in 2019 to 27.43% in 2023. The increase reflects overall enhanced profitability after accounting for all expenses and taxes, with the 2023 figure representing the highest margin in the period analyzed.
- Return on Equity (ROE)
- ROE experienced a noticeable decline from 55.39% in 2019 to 43.46% in 2020. Following this drop, the metric showed moderate improvements through 2021 and 2022, reaching 47.99%, before slightly decreasing to 46.91% in 2023. Despite fluctuations, the ROE remained at a relatively high level, indicating strong returns generated on shareholders' equity.
- Return on Assets (ROA)
- The ROA initially declined from 12.99% in 2019 to 12.04% in 2020, but then demonstrated a clear upward trend, increasing to 14.65% in 2021. This was followed by a minor drop in 2022 to 14.16%, and a substantial rise to 16.41% in 2023. The pattern suggests improved asset utilization efficiency in recent years.
Return on Sales
Return on Investment
Gross Profit Margin
Zoetis Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Revenue | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
- Revenue
- The revenue of the company showed a consistent upward trend over the five-year period. Starting at US$ 6,260 million in 2019, revenue increased each year, reaching US$ 8,544 million by 2023. This reflects steady business growth, with the largest annual increase occurring between 2020 and 2021.
- Gross Profit
- Gross profit also exhibited a positive progression, rising from US$ 4,268 million in 2019 to US$ 5,983 million in 2023. The growth in gross profit slightly outpaced revenue growth, indicating improved profitability at the gross level.
- Gross Profit Margin
- The gross profit margin maintained a relatively stable level, ranging between approximately 68% and 70% throughout the period. It increased from 68.18% in 2019 to a peak of 70.38% in 2021, followed by a minor decline in 2022, and a slight increase again in 2023. This stability suggests effective cost management in relation to revenue.
Operating Profit Margin
Zoetis Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | ||||||
| Revenue | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Operating Profit Margin, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Operating profit margin = 100 × Operating income ÷ Revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
- Revenue
- Revenue displayed a consistent upward trend over the five-year period, increasing from $6,260 million in 2019 to $8,544 million in 2023. This represents a cumulative growth of approximately 36.5%, indicating steady business expansion year over year.
- Operating Income
- Operating income also showed a positive trajectory, rising from $1,967 million in 2019 to $3,016 million in 2023. The increase is substantial, with an overall growth of about 53% during the period. This suggests improvements not only in sales but also in operating efficiency or cost management.
- Operating Profit Margin
- The operating profit margin improved from 31.42% in 2019 to a peak of 36.1% in 2022, showing enhanced profitability relative to revenue. Although the margin slightly declined to 35.3% in 2023, it remained significantly higher than the 2019 baseline, reflecting sustained operational effectiveness despite the marginal dip in the final year.
- Overall Trends and Insights
- Both revenue and operating income experienced steady growth throughout the periods analyzed, with operating income growing at a faster rate than revenue. This is reflected in the increasing operating profit margins, which suggest improved cost control or pricing power. The slight decline in margin in 2023 warrants monitoring but does not substantially undermine the positive trend in profitability. The data indicates the company strengthened its financial performance consistently over the five years.
Net Profit Margin
Zoetis Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Zoetis Inc. | ||||||
| Revenue | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Net Profit Margin, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net profit margin = 100 × Net income attributable to Zoetis Inc. ÷ Revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
- Revenue Trend
- Revenue has shown a consistent upward trajectory over the analyzed period. It increased from $6,260 million in 2019 to $8,544 million in 2023, representing steady growth each year. This indicates expanding sales or service activities contributing to the overall business size.
- Net Income Growth
- Net income attributable to the company also displayed positive growth, rising from $1,500 million in 2019 to $2,344 million in 2023. The increase has been gradual but steady, suggesting improved profitability and effective cost management alongside growing revenue.
- Net Profit Margin Analysis
- The net profit margin percentages indicate an improving profit efficiency. Starting at 23.96% in 2019, the margin rose to 27.43% by 2023. This upward trend illustrates increasing profitability relative to revenue, reflecting better control over operating expenses or higher-margin revenue streams.
- Overall Financial Performance
- Across all reviewed years, the data show a positive financial performance characterized by growth in revenue and net income, complemented by improving net profit margins. This combination suggests a strengthening financial position with enhanced capacity to generate profit from increased revenue.
Return on Equity (ROE)
Zoetis Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Zoetis Inc. | ||||||
| Total Zoetis Inc. equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| ROE, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| ROE, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROE = 100 × Net income attributable to Zoetis Inc. ÷ Total Zoetis Inc. equity
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income Attributable to Zoetis Inc.
- There is a consistent upward trend in net income over the five-year period. Starting at 1,500 million US dollars in 2019, the net income increased each year, reaching 2,344 million US dollars in 2023. This represents an overall growth of approximately 56% from 2019 to 2023, indicating strong profitability expansion.
- Total Zoetis Inc. Equity
- Total equity also exhibited growth from 2,708 million US dollars in 2019 to 4,997 million US dollars in 2023. Notably, the equity increased sharply from 2019 to 2021, peaking at 4,543 million US dollars, followed by a slight decline in 2022 before rebounding in 2023. Overall, equity nearly doubled within the five-year span, suggesting sustained capital accumulation despite a minor setback in 2022.
- Return on Equity (ROE)
- The return on equity showed some fluctuation but remained relatively high throughout the period. ROE started at 55.39% in 2019, decreased to 43.46% in 2020, then showed a modest recovery and slight increases, reaching 46.91% in 2023. Despite a dip in 2020, the company maintained a strong ability to generate profits from its shareholders' equity, with overall ROE levels consistently above 40%.
Return on Assets (ROA)
Zoetis Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Zoetis Inc. | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| ROA, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| ROA, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROA = 100 × Net income attributable to Zoetis Inc. ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income Trend
- The net income attributable to the company has exhibited a consistent upward trajectory over the five-year period. Starting at $1,500 million in 2019, net income increased steadily each year, reaching $2,344 million by the end of 2023. This indicates strong and continuous profitability growth.
- Total Assets Trend
- Total assets have generally increased over the timeframe, starting at $11,545 million in 2019 and rising to a peak of $14,925 million in 2022. However, there was a slight decrease in 2023 to $14,286 million, suggesting a minor contraction in asset base after several years of growth.
- Return on Assets (ROA) Trend
- The return on assets percentage has followed an improving trend overall. Although it slightly declined from 12.99% in 2019 to 12.04% in 2020, ROA increased significantly afterward, reaching 16.41% in 2023. This improvement indicates enhanced efficiency in utilizing the asset base to generate profits.
- Summary of Financial Performance
- Over the observed period, profitability has improved markedly, with net income rising substantially. Despite a minor reduction in total assets in the final year, the elevated and increasing ROA confirms effective asset utilization. The combination of rising net income and improving ROA points to strengthened operational performance and financial management.