Stock Analysis on Net

Zoetis Inc. (NYSE:ZTS)

This company has been moved to the archive! The financial data has not been updated since May 2, 2024.

Analysis of Short-term (Operating) Activity Ratios 
Quarterly Data

Microsoft Excel

Short-term Activity Ratios (Summary)

Zoetis Inc., short-term (operating) activity ratios (quarterly data)

Microsoft Excel
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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Turnover Ratios
Inventory turnover 0.99 1.00 0.91 0.91 0.96 1.05 1.04 1.08 1.13 1.20 1.23 1.26 1.26 1.26 1.22 1.21 1.31 1.41
Receivables turnover 6.75 6.55 6.66 6.22 6.82 6.65 6.73 6.19 6.46 6.86 6.61 6.34 6.23 6.59 6.46 6.44 6.57 5.76
Payables turnover 6.46 6.23 6.41 5.29 5.83 6.06 6.44 5.53 5.78 5.28 5.95 6.14 6.21 4.50 5.56 5.73 7.29 6.62
Working capital turnover 1.96 1.92 1.81 1.86 1.86 1.86 2.18 2.22 2.07 1.51 1.46 1.50 1.48 1.50 1.50 1.42 2.08 2.13
Average No. Days
Average inventory processing period 370 365 403 402 378 349 350 338 323 305 297 291 289 289 299 301 280 258
Add: Average receivable collection period 54 56 55 59 53 55 54 59 57 53 55 58 59 55 56 57 56 63
Operating cycle 424 421 458 461 431 404 404 397 380 358 352 349 348 344 355 358 336 321
Less: Average payables payment period 57 59 57 69 63 60 57 66 63 69 61 59 59 81 66 64 50 55
Cash conversion cycle 367 362 401 392 368 344 347 331 317 289 291 290 289 263 289 294 286 266

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), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).


Inventory Turnover
The inventory turnover ratio shows a generally declining trend from early 2020 through 2023, starting at 1.41 in March 2020 and decreasing to a low near 0.91 in the middle of 2023. There is a slight recovery toward the end of 2023 and into early 2024, reaching around 0.99. This indicates slower inventory movement and possibly increased inventory levels or reduced sales velocity over time.
Receivables Turnover
The receivables turnover ratio remains relatively stable with minor fluctuations, oscillating in a range approximately between 6.19 and 6.86. The ratio does not show a strong upward or downward trend, suggesting consistent efficiency in collection of receivables over the periods analyzed.
Payables Turnover
The payables turnover ratio experiences notable volatility. It starts higher around 6.62 to 7.29 in early 2020, drops below 5.0 by the first quarter of 2021, and then rebounds repeatedly, fluctuating around the 5.0 to 6.5 range through 2023 and early 2024. This indicates varying payment practices, with periods of slower and faster payments to suppliers.
Working Capital Turnover
The working capital turnover ratio decreases significantly from 2.13 in March 2020 to around 1.42 by September 2019, with some recovery and subsequent fluctuations around the 1.5 to 2.2 range. From late 2021 onwards, the ratio more consistently hovers near 1.8 to 1.9. This suggests changes in operational efficiency and possible variations in current asset and liability management over time.
Average Inventory Processing Period
The average inventory processing period exhibits a consistent upward trend over the years, increasing from 258 days in March 2020 to a peak of approximately 403 days in late 2023. There is a slight improvement to 365 days by early 2024. This trend reflects longer periods inventory remains in stock, which could impact liquidity and indicate challenges in inventory management.
Average Receivable Collection Period
Receivable collection days remain quite stable, fluctuating between 53 and 63 days without a clear directional trend. This stability reflects consistent credit and collection policies over the observed timeframe.
Operating Cycle
The operating cycle lengthens steadily from 321 days in early 2020 to around 461 days in mid-2023, followed by a slight decline to about 424 days by early 2024. The increase primarily reflects the extended inventory processing period, indicating a longer time to convert raw materials into cash through sales.
Average Payables Payment Period
The average payables payment period is variable, initially decreasing from 55 days in early 2020 to 50 days mid-2020, then rising to around 81 days by March 2021 before fluctuating between 57 and 69 days thereafter. These fluctuations suggest changes in supplier payment timing, possibly reflecting cash management strategies or supplier negotiations.
Cash Conversion Cycle
The cash conversion cycle lengthens from 266 days in March 2020 to a peak near 401 days in late 2023, then slightly decreases to roughly 367 days by March 2024. The extended cycle reflects slower conversion of investments in inventory and receivables into cash, primarily driven by longer inventory holding periods combined with relatively stable receivables and payables periods.

Turnover Ratios


Average No. Days


Inventory Turnover

Zoetis Inc., inventory turnover calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Selected Financial Data (US$ in millions)
Cost of sales 643 728 638 607 588 653 607 625 569 600 586 568 549 601 546 451 459 530 479 465 518
Inventories 2,651 2,564 2,744 2,701 2,563 2,345 2,303 2,205 2,057 1,923 1,875 1,802 1,700 1,628 1,626 1,584 1,481 1,410 1,439 1,404 1,361
Short-term Activity Ratio
Inventory turnover1 0.99 1.00 0.91 0.91 0.96 1.05 1.04 1.08 1.13 1.20 1.23 1.26 1.26 1.26 1.22 1.21 1.31 1.41
Benchmarks
Inventory Turnover, Competitors2
AbbVie Inc. 4.83 4.98 4.74 4.30 4.53 4.87 5.54 4.99 4.96 5.58 5.76 5.45 5.40 4.65
Amgen Inc. 1.14 0.89 1.41 1.38 1.31 1.30 1.34 1.40 1.48 1.58 1.53 1.53 1.53 1.58
Bristol-Myers Squibb Co. 3.70 4.02 4.33 4.39 3.93 4.33 4.77 4.59 4.55 4.74 4.85 5.01 5.61 5.68
Danaher Corp. 3.73 3.80 3.53 3.58 3.50 4.03 3.80 3.71 3.87 4.16 4.06 4.28 4.34 4.28
Eli Lilly & Co. 1.17 1.23 1.40 1.37 1.36 1.54 1.86 1.79 1.93 1.88 1.79 1.80 1.68 1.38
Gilead Sciences Inc. 3.59 3.64 3.49 3.45 3.57 3.75 4.71 4.50 4.50 4.08 3.21 2.99 2.79 2.72
Johnson & Johnson 2.32 2.37 2.46 2.23 2.36 2.49 2.68 2.69 2.77 2.87 2.86 2.91 2.86 3.04
Merck & Co. Inc. 2.42 2.54 2.63 2.66 2.72 2.95 3.10 3.06 2.74 2.29 2.73 2.79 2.40 2.45
Pfizer Inc. 2.15 2.45 2.65 2.31 3.07 3.82 3.62 3.66 3.67 3.40 2.78 1.80 1.28 1.08
Regeneron Pharmaceuticals Inc. 0.66 0.70 0.72 0.69 0.67 0.65 0.83 0.96 1.27 1.25 0.88 0.82 0.56 0.58
Thermo Fisher Scientific Inc. 4.93 5.06 4.83 4.64 4.62 4.60 4.29 4.03 3.87 3.88 3.90 4.03 4.01 4.02
Vertex Pharmaceuticals Inc. 1.65 1.71 1.71 1.90 2.06 2.35 2.69 2.70 2.83 2.56 2.58 2.52 2.56 2.62

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), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

1 Q1 2024 Calculation
Inventory turnover = (Cost of salesQ1 2024 + Cost of salesQ4 2023 + Cost of salesQ3 2023 + Cost of salesQ2 2023) ÷ Inventories
= (643 + 728 + 638 + 607) ÷ 2,651 = 0.99

2 Click competitor name to see calculations.


The analyzed data reveal several noteworthy trends related to cost of sales, inventories, and inventory turnover over the examined periods.

Cost of Sales
Cost of sales exhibited fluctuations with a general upward trajectory from 2019 to 2024. Starting at $518 million in March 2019, the figure decreased to its lowest point around $451 million by June 2020, coinciding with the early stages of the pandemic. Thereafter, there was a consistent increase, peaking at $728 million in December 2023 before slightly declining to $643 million by March 2024. This suggests increased production or sales activity in the latter years, with some volatility towards the end of the analyzed period.
Inventories
Inventory levels demonstrated a steady and significant increase across the entire timeframe. From a base of $1,361 million in March 2019, inventories rose continuously, reaching a high of $2,744 million in September 2023. Following this peak, there was a moderate decline to $2,564 million by December 2023, with a slight recovery to $2,651 million by March 2024. The persistent increase in inventories could indicate an accumulation of stock potentially due to demand forecasting, supply chain dynamics, or strategic stockpiling.
Inventory Turnover
The inventory turnover ratio, available from late 2019 onwards, shows a declining trend over the period. It started at 1.41 in September 2019, followed by a gradual decrease to a low of 0.91 by both June and September 2023. In the last two quarters, there was a mild improvement, with ratios rising to 1.00 and 0.99 by December 2023 and March 2024 respectively. This downward trend suggests that inventory was being turned over less frequently, which may reflect slower sales velocity or increased inventory holding periods.

In summary, the company experienced rising inventory levels alongside increasing cost of sales over the five-year period, while inventory turnover diminished, indicating changes in operational efficiency or market conditions affecting the speed at which inventory was sold. The slight recovery in turnover towards the end of the period may signal adjustments in inventory management or market demand returning to higher levels.


Receivables Turnover

Zoetis Inc., receivables turnover calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Selected Financial Data (US$ in millions)
Revenue 2,190 2,213 2,151 2,180 2,000 2,040 2,002 2,052 1,986 1,967 1,990 1,948 1,871 1,807 1,786 1,548 1,534 1,674 1,584 1,547 1,455
Accounts receivable, less allowance for doubtful accounts 1,293 1,304 1,257 1,322 1,186 1,215 1,189 1,291 1,222 1,133 1,152 1,170 1,125 1,013 1,012 984 965 1,086 1,030 994 970
Short-term Activity Ratio
Receivables turnover1 6.75 6.55 6.66 6.22 6.82 6.65 6.73 6.19 6.46 6.86 6.61 6.34 6.23 6.59 6.46 6.44 6.57 5.76
Benchmarks
Receivables Turnover, Competitors2
AbbVie Inc. 4.55 4.87 4.83 4.88 4.95 5.16 5.38 5.10 5.29 5.63 5.94 5.42 5.24 5.19
Amgen Inc. 4.16 3.70 4.17 4.34 4.34 4.46 4.60 4.62 4.81 4.96 5.11 5.39 5.41 5.36
Danaher Corp. 7.02 6.09 6.15 6.64 6.89 6.40 7.09 6.81 6.87 6.36 6.69 6.51 6.28 5.51
Eli Lilly & Co. 4.56 3.75 3.93 3.93 3.68 4.14 4.35 4.57 4.64 4.24 4.69 4.58 4.56 4.18
Gilead Sciences Inc. 5.84 5.78 5.68 6.43 6.43 5.65 6.16 6.60 7.18 6.01 5.95 6.34 6.43 4.98
Johnson & Johnson 5.73 5.73 5.91 5.36 5.65 5.88 6.04 5.92 6.08 6.14 6.13 6.00 5.64 6.08
Merck & Co. Inc. 5.40 5.81 5.71 5.29 5.56 6.27 6.22 5.93 5.49 5.28 5.56 6.00 5.65 6.11
Pfizer Inc. 5.09 5.33 6.25 7.66 7.57 9.16 6.21 6.68 6.99 7.08 5.81 5.23 4.70 5.28
Regeneron Pharmaceuticals Inc. 2.51 2.31 2.35 2.47 2.42 2.28 2.47 2.76 3.41 2.66 2.48 1.77 2.20 2.07
Thermo Fisher Scientific Inc. 5.36 5.21 5.19 5.43 5.53 5.53 5.76 5.53 5.21 4.92 7.03 6.99 6.46 5.61
Vertex Pharmaceuticals Inc. 5.68 6.31 6.27 6.11 5.95 6.19 6.28 6.26 6.15 6.66 6.48 7.19 6.56 7.01

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), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

1 Q1 2024 Calculation
Receivables turnover = (RevenueQ1 2024 + RevenueQ4 2023 + RevenueQ3 2023 + RevenueQ2 2023) ÷ Accounts receivable, less allowance for doubtful accounts
= (2,190 + 2,213 + 2,151 + 2,180) ÷ 1,293 = 6.75

2 Click competitor name to see calculations.


Revenue Trends
The revenue exhibits an overall upward trend from March 31, 2019, through March 31, 2024. Initially, there is steady growth, with revenue increasing from 1,455 million USD in the first quarter of 2019 to a peak of 1,807 million USD at the end of 2020. Subsequently, revenue fluctuates moderately, maintaining a range between approximately 1,900 million USD and 2,213 million USD from 2021 onwards. Notably, the revenue reached the highest recorded value of 2,213 million USD during the third quarter of 2023, followed by a slight decrease in the final quarter of 2023 and the first quarter of 2024.
Accounts Receivable Dynamics
Accounts receivable, net of allowance for doubtful accounts, also shows an increasing trend over the analyzed periods. Starting at 970 million USD in early 2019, the balances increased consistently, reaching a peak of 1,322 million USD by the second quarter of 2023. This indicates a growth in outstanding receivables over time, albeit with some minor declines in certain quarters (notably from mid-2022 onward). The fluctuations suggest some variability in collections or credit terms, but the overall trend correlates to the growth in revenue.
Receivables Turnover Ratio Analysis
The receivables turnover ratio, available from March 31, 2020, onwards, presents a relatively stable pattern ranging mainly between approximately 6.2 and 6.9 times per year. This ratio indicates the frequency with which receivables are collected during the year. Despite some quarter-to-quarter variance, the ratio reflects consistent efficiency in receivables collection relative to sales. The turnover does not show a significant trend upwards or downwards, implying that despite the increase in accounts receivable balances, collection practices have maintained steady performance relative to revenue growth.
Integrated Observations
When considering all three metrics together, the company appears to sustain revenue growth while managing accounts receivable reasonably well, as shown by the relatively stable receivables turnover. However, the growing absolute values of accounts receivable require continued attention to credit risk and collection processes to avoid potential liquidity impacts. The consistency of the receivables turnover ratio amidst increasing receivables and revenue is indicative of effective credit management practices during the period.

Payables Turnover

Zoetis Inc., payables turnover calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Selected Financial Data (US$ in millions)
Cost of sales 643 728 638 607 588 653 607 625 569 600 586 568 549 601 546 451 459 530 479 465 518
Accounts payable 405 411 388 464 424 405 373 430 402 436 387 369 346 457 357 335 265 301 284 290 235
Short-term Activity Ratio
Payables turnover1 6.46 6.23 6.41 5.29 5.83 6.06 6.44 5.53 5.78 5.28 5.95 6.14 6.21 4.50 5.56 5.73 7.29 6.62
Benchmarks
Payables Turnover, Competitors2
Amgen Inc. 6.10 5.32 5.22 5.67 4.97 4.08 5.30 5.09 4.65 4.72 5.41 4.92 4.40 4.33
Bristol-Myers Squibb Co. 3.12 3.28 3.75 3.38 3.20 3.33 3.82 3.41 3.25 3.37 3.89 2.97 3.69 4.34
Danaher Corp. 5.88 5.58 5.63 5.82 5.68 5.45 5.61 5.00 5.04 4.48 5.20 5.54 5.29 4.79
Eli Lilly & Co. 2.88 2.73 2.81 2.65 3.07 3.43 4.24 4.21 5.24 4.38 4.46 4.30 3.75 3.41
Gilead Sciences Inc. 10.69 11.81 9.90 9.06 8.99 6.25 11.22 11.89 11.43 9.36 9.18 8.70 8.71 5.42
Johnson & Johnson 3.23 2.76 3.29 2.75 3.05 2.66 3.08 3.15 3.26 2.70 3.32 3.38 3.34 2.99
Merck & Co. Inc. 4.48 4.11 4.59 4.58 4.34 4.08 5.16 4.86 4.25 2.96 4.54 3.93 3.81 3.37
Pfizer Inc. 4.19 3.72 5.07 3.92 4.78 5.04 5.49 6.17 6.66 5.53 5.11 3.72 2.68 2.02
Regeneron Pharmaceuticals Inc. 2.67 2.99 3.43 3.14 2.69 2.65 3.74 4.00 5.39 4.32 4.23 3.42 2.23 2.36
Thermo Fisher Scientific Inc. 9.91 8.97 10.41 10.82 9.35 7.67 9.93 8.84 7.96 6.83 8.31 8.88 8.12 7.45
Vertex Pharmaceuticals Inc. 3.81 3.46 3.13 3.16 3.41 3.55 8.23 5.01 5.52 4.64 6.73 6.35 5.99 4.75

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), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

1 Q1 2024 Calculation
Payables turnover = (Cost of salesQ1 2024 + Cost of salesQ4 2023 + Cost of salesQ3 2023 + Cost of salesQ2 2023) ÷ Accounts payable
= (643 + 728 + 638 + 607) ÷ 405 = 6.46

2 Click competitor name to see calculations.


The data reveals distinct fluctuations in cost of sales, accounts payable, and payables turnover over the observed periods from the first quarter of 2019 through the first quarter of 2024.

Cost of Sales
The cost of sales exhibited variability with a general upward trajectory commencing from $518 million in the first quarter of 2019. A notable decline occurred during the first half of 2020, reaching a low of $451 million in the second quarter of 2020. Subsequently, the cost of sales recovered and experienced incremental growth, peaking at $728 million in the fourth quarter of 2023. By the first quarter of 2024, the cost of sales slightly decreased to $643 million. This trend indicates expansion with periodic contractions, possibly influenced by operational or market conditions.
Accounts Payable
Accounts payable showed an overall increasing pattern starting from $235 million in the first quarter of 2019. The figures experienced modest rises and declines but generally trended upward, reaching $457 million by the fourth quarter of 2020. Post-2020, the values fluctuated moderately but remained elevated compared to the earlier years, with values oscillating around the $400 million range in most quarters. The first quarter of 2024 reported accounts payable at $405 million, indicating relative stability after previous increases.
Payables Turnover Ratio
The payables turnover ratio exhibited considerable variation, reflecting changes in payment efficiency and supplier management. Starting from 6.62 in the fourth quarter of 2019, the ratio showed a declining trend into the end of 2020, dropping to 4.5. Following that period, volatility persisted with ups and downs between approximately 5.28 and 6.46 through the subsequent quarters. The ratio peaked at 6.46 in the last quarter of 2023 and remained around 6.23 by the first quarter of 2024, suggesting improved turnover relative to prior lows.

Overall, the financial metrics point to an expanding scale of operations as seen in the rising cost of sales and accounts payable. The fluctuating payables turnover ratio signals variations in payment practices or supplier terms that may merit further scrutiny to assess liquidity and working capital management trends.


Working Capital Turnover

Zoetis Inc., working capital turnover calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Selected Financial Data (US$ in millions)
Current assets 6,359 6,343 6,222 6,183 6,269 7,506 6,551 6,651 6,837 6,930 6,682 7,048 6,794 6,611 6,757 6,285 4,772 4,748 4,618 4,484 4,379
Less: Current liabilities 1,909 1,889 1,608 1,769 1,915 3,167 2,880 3,051 3,034 1,797 1,471 2,091 2,066 2,170 2,400 1,811 1,721 1,806 1,052 1,075 1,082
Working capital 4,450 4,454 4,614 4,414 4,354 4,339 3,671 3,600 3,803 5,133 5,211 4,957 4,728 4,441 4,357 4,474 3,051 2,942 3,566 3,409 3,297
 
Revenue 2,190 2,213 2,151 2,180 2,000 2,040 2,002 2,052 1,986 1,967 1,990 1,948 1,871 1,807 1,786 1,548 1,534 1,674 1,584 1,547 1,455
Short-term Activity Ratio
Working capital turnover1 1.96 1.92 1.81 1.86 1.86 1.86 2.18 2.22 2.07 1.51 1.46 1.50 1.48 1.50 1.50 1.42 2.08 2.13
Benchmarks
Working Capital Turnover, Competitors2
AbbVie Inc. 130.12
Amgen Inc. 3.39 2.25 0.81 0.84 0.82 3.82 2.52 3.67 4.34 3.37 2.55 5.35 2.84 2.55
Bristol-Myers Squibb Co. 15.56 4.60 10.47 5.53 5.55 8.30 5.75 4.92 6.24 3.95 4.43 4.24 4.25 3.72
Danaher Corp. 3.60 4.22 2.18 3.08 3.81 4.20 5.00 5.43 5.91 8.40 7.98 3.12 3.45 3.48
Eli Lilly & Co. 5.45 31.79 12.21 5.77 31.84 14.71 19.45 8.19 8.33 6.73 12.14 5.21 4.93
Gilead Sciences Inc. 26.58 5.61 6.74 84.15 9.14 8.42 8.56 6.87 6.68 8.54 7.25 7.09 7.06 5.30
Johnson & Johnson 10.35 11.81 9.37 14.06 23.02 4.88 5.02 5.57 5.95 5.97 5.93 7.26 9.44
Merck & Co. Inc. 9.68 9.29 6.69 8.86 5.63 5.16 5.58 6.39 6.09 7.62 6.51 6.97 84.97 109.83
Pfizer Inc. 29.17 1.62 2.03 6.89 11.00 3.83 5.05 6.10 4.78 4.29 4.21 3.60 4.58
Regeneron Pharmaceuticals Inc. 0.86 0.82 0.87 0.92 0.90 0.96 1.09 1.14 1.46 1.59 1.35 1.29 1.35 1.20
Thermo Fisher Scientific Inc. 4.38 4.05 4.86 7.40 10.13 5.46 5.40 6.03 6.13 5.87 2.30 3.10 3.36 2.76
Vertex Pharmaceuticals Inc. 1.07 0.93 0.87 0.90 0.93 0.85 0.90 0.93 0.97 1.02 1.03 1.01 0.97 0.99

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), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

1 Q1 2024 Calculation
Working capital turnover = (RevenueQ1 2024 + RevenueQ4 2023 + RevenueQ3 2023 + RevenueQ2 2023) ÷ Working capital
= (2,190 + 2,213 + 2,151 + 2,180) ÷ 4,450 = 1.96

2 Click competitor name to see calculations.


The financial data reveals distinct trends across the quarters from March 2019 through March 2024. An examination of working capital shows variable levels over time, with some notable fluctuations that merit attention.

Working Capital
Working capital experienced an initial increase from March 2019 (US$ 3,297 million) to June 2020 (US$ 4,474 million), indicating an improvement in liquidity during this period. This peak was followed by a gradual decline through the latter part of 2021, reaching US$ 3,803 million in March 2022. Subsequently, working capital displayed recovery and some stability, rising again to over US$ 4,600 million in late 2023, before stabilizing near US$ 4,450 million by the first quarter of 2024.
Revenue
Revenue showed a steady upward trend overall, beginning at US$ 1,455 million in the first quarter of 2019 and increasing progressively each quarter. Some fluctuations were observed in 2020, with revenue dipping during the early quarters of the COVID-19 pandemic but recovering swiftly in the latter part of the year and continuing to grow in subsequent years. By March 2024, revenue reached approximately US$ 2,190 million, reflecting sustained growth over the observed period.
Working Capital Turnover Ratio
The working capital turnover ratio, which measures how efficiently working capital is used to generate revenue, exhibited considerable volatility. Initial values are missing, but beginning in December 2019, the ratio started at 2.13 and showed a downward shift towards 1.42 by June 2020. Following this, the ratio regained strength and remained around 1.5 for much of 2020 and 2021, then escalated to above 2.0 in the second and third quarters of 2022 before declining once again below 2.0 in 2023. The ratio stabilized near 1.9 by the early part of 2024.

Overall, the working capital position improved notably until mid-2020, followed by a period of contraction and stabilization. Revenue growth was consistent and resilient, with only minor interruptions during the early COVID-19 period. The working capital turnover ratio suggests fluctuating operational efficiency in utilizing working capital, with periods of both strengthening and weakening trends over the five-year span.


Average Inventory Processing Period

Zoetis Inc., average inventory processing period calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Selected Financial Data
Inventory turnover 0.99 1.00 0.91 0.91 0.96 1.05 1.04 1.08 1.13 1.20 1.23 1.26 1.26 1.26 1.22 1.21 1.31 1.41
Short-term Activity Ratio (no. days)
Average inventory processing period1 370 365 403 402 378 349 350 338 323 305 297 291 289 289 299 301 280 258
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
AbbVie Inc. 75 73 77 85 81 75 66 73 74 65 63 67 68 79
Amgen Inc. 321 411 259 265 279 281 272 260 247 231 239 239 239 231
Bristol-Myers Squibb Co. 99 91 84 83 93 84 76 79 80 77 75 73 65 64
Danaher Corp. 98 96 104 102 104 91 96 98 94 88 90 85 84 85
Eli Lilly & Co. 312 298 261 267 268 237 196 204 189 194 204 203 217 265
Gilead Sciences Inc. 102 100 105 106 102 97 78 81 81 89 114 122 131 134
Johnson & Johnson 158 154 149 164 155 147 136 136 132 127 128 125 128 120
Merck & Co. Inc. 151 144 139 137 134 124 118 119 133 159 134 131 152 149
Pfizer Inc. 170 149 138 158 119 95 101 100 99 107 131 203 284 338
Regeneron Pharmaceuticals Inc. 553 519 508 532 549 562 440 379 287 292 415 445 653 625
Thermo Fisher Scientific Inc. 74 72 76 79 79 79 85 91 94 94 94 91 91 91
Vertex Pharmaceuticals Inc. 222 214 213 192 177 156 136 135 129 143 142 145 142 139

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), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

1 Q1 2024 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 0.99 = 370

2 Click competitor name to see calculations.


The data reveals a gradual decline in the inventory turnover ratio over the observed periods, indicating a slower rate at which inventory is sold and replaced. Starting from a ratio of 1.41 in March 2020, the turnover steadily decreases, reaching a low point of 0.91 in both September and December of 2023, before showing a slight rebound to 0.99 and 0.99 in December 2023 and March 2024 respectively. This downward trend suggests increasing challenges in managing inventory efficiently or changes in demand affecting sales velocity.

Correspondingly, the average inventory processing period exhibits an increasing trend, moving from 258 days in March 2020 to a peak of 403 days in September 2023. Such an increase in days indicates that inventory remains in stock for longer durations before being sold. This pattern is consistent with the observed decrease in inventory turnover, confirming that inventory is turning over less frequently. Although there is a slight reduction to 365 and 370 days in December 2023 and March 2024 respectively, the inventory still remains higher compared to earlier years.

Inventory Turnover Ratio Trends
Declined from 1.41 to a low of 0.91, indicating slower inventory movement.
Slight recovery noted in the most recent quarters but still below initial levels.
Average Inventory Processing Period
Increased substantially from 258 days to a high of 403 days, showing prolonged inventory holding periods.
The recent marginal decrease suggests a potential improvement but remains elevated relative to the start of the period.
Implications
The inverse relationship between the turnover ratio and processing period suggests a weakening in inventory management efficiency over the period analyzed.
Factors possibly influencing these trends could include changes in sales demand, supply chain disruptions, or strategic shifts in inventory policies.

Average Receivable Collection Period

Zoetis Inc., average receivable collection period calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Selected Financial Data
Receivables turnover 6.75 6.55 6.66 6.22 6.82 6.65 6.73 6.19 6.46 6.86 6.61 6.34 6.23 6.59 6.46 6.44 6.57 5.76
Short-term Activity Ratio (no. days)
Average receivable collection period1 54 56 55 59 53 55 54 59 57 53 55 58 59 55 56 57 56 63
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
AbbVie Inc. 80 75 76 75 74 71 68 72 69 65 61 67 70 70
Amgen Inc. 88 99 88 84 84 82 79 79 76 74 71 68 67 68
Danaher Corp. 52 60 59 55 53 57 51 54 53 57 55 56 58 66
Eli Lilly & Co. 80 97 93 93 99 88 84 80 79 86 78 80 80 87
Gilead Sciences Inc. 62 63 64 57 57 65 59 55 51 61 61 58 57 73
Johnson & Johnson 64 64 62 68 65 62 60 62 60 59 60 61 65 60
Merck & Co. Inc. 68 63 64 69 66 58 59 62 66 69 66 61 65 60
Pfizer Inc. 72 69 58 48 48 40 59 55 52 52 63 70 78 69
Regeneron Pharmaceuticals Inc. 146 158 156 148 151 160 148 132 107 137 147 206 166 177
Thermo Fisher Scientific Inc. 68 70 70 67 66 66 63 66 70 74 52 52 56 65
Vertex Pharmaceuticals Inc. 64 58 58 60 61 59 58 58 59 55 56 51 56 52

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), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

1 Q1 2024 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 6.75 = 54

2 Click competitor name to see calculations.


The analysis of the quarterly financial ratios related to receivables turnover and average receivable collection period reveals several insights into the company's credit and collection efficiency over the observed periods.

Receivables turnover ratio
The receivables turnover ratio is available from March 31, 2020, onwards. It shows an initial increase from 5.76 at the beginning of the observed period to a peak of 6.86 by March 31, 2022, indicating an improvement in the company's ability to collect receivables. Following this peak, there is a modest decline with some fluctuations, with the ratio generally remaining around the mid-6 range, ending at 6.75 for March 31, 2024. The pattern suggests that the company enhanced its efficiency in converting receivables into cash up to early 2022 and then maintained a relatively stable turnover rate around the improved level.
Average receivable collection period (number of days)
The average collection period exhibits an inverse trend to the receivables turnover ratio, as expected. Starting at 63 days in March 31, 2020, the period decreases steadily to a low of 53 days by December 31, 2021, reflecting faster collection of receivables. Afterward, there is some volatility, with the period fluctuating between 53 and 59 days up to the end of the timeline, concluding at 54 days in March 31, 2024. This indicates that while the company managed to reduce the collection time significantly in the initial years, it has since stabilized its collection efficiency within a narrow range.

Overall, the data indicates that the company improved its receivables management effectiveness beginning in 2020, achieving better turnover and quicker collections until early 2022. Subsequent periods show maintenance of this enhanced performance with slight variations but no major deterioration. The stability in these ratios over the latest quarters suggests consistent collection policies and practices.


Operating Cycle

Zoetis Inc., operating cycle calculation (quarterly data)

No. days

Microsoft Excel
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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Selected Financial Data
Average inventory processing period 370 365 403 402 378 349 350 338 323 305 297 291 289 289 299 301 280 258
Average receivable collection period 54 56 55 59 53 55 54 59 57 53 55 58 59 55 56 57 56 63
Short-term Activity Ratio
Operating cycle1 424 421 458 461 431 404 404 397 380 358 352 349 348 344 355 358 336 321
Benchmarks
Operating Cycle, Competitors2
AbbVie Inc. 155 148 153 160 155 146 134 145 143 130 124 134 138 149
Amgen Inc. 409 510 347 349 363 363 351 339 323 305 310 307 306 299
Danaher Corp. 150 156 163 157 157 148 147 152 147 145 145 141 142 151
Eli Lilly & Co. 392 395 354 360 367 325 280 284 268 280 282 283 297 352
Gilead Sciences Inc. 164 163 169 163 159 162 137 136 132 150 175 180 188 207
Johnson & Johnson 222 218 211 232 220 209 196 198 192 186 188 186 193 180
Merck & Co. Inc. 219 207 203 206 200 182 177 181 199 228 200 192 217 209
Pfizer Inc. 242 218 196 206 167 135 160 155 151 159 194 273 362 407
Regeneron Pharmaceuticals Inc. 699 677 664 680 700 722 588 511 394 429 562 651 819 802
Thermo Fisher Scientific Inc. 142 142 146 146 145 145 148 157 164 168 146 143 147 156
Vertex Pharmaceuticals Inc. 286 272 271 252 238 215 194 193 188 198 198 196 198 191

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), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

1 Q1 2024 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 370 + 54 = 424

2 Click competitor name to see calculations.


Average Inventory Processing Period
Over the observed timeframe, the average inventory processing period exhibits a general upward trend. Starting at 258 days in March 2020, there is a gradual increase, reaching 299 days by December 2019. From the end of 2019 onwards, the period continues to climb steadily, peaking around 403 days in December 2023. Early 2024 shows a slight decline to 370 days. This pattern indicates a lengthening duration of inventory holding, suggesting possible changes in inventory management efficiency or supply chain dynamics.
Average Receivable Collection Period
The average receivable collection period remains relatively stable throughout the periods under review. Initially measured at 63 days in March 2020, it shows a modest decrease and fluctuations within a narrow band between 53 and 59 days thereafter. There is no clear directional trend, indicating consistent collection practices with minor seasonal or operational variations.
Operating Cycle
The operating cycle demonstrates a clear increasing trajectory over the course of the data series. Beginning at 321 days as of March 2020, it rises progressively, reaching 355 days by the end of 2019, and continuing upwards towards a peak of 461 days in March 2023. This trend reflects the combined impact of a lengthening inventory processing period and relatively stable receivable collection. The increase suggests that the overall time taken from inventory acquisition to cash collection is extending, which may have implications for working capital management.

Average Payables Payment Period

Zoetis Inc., average payables payment period calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Selected Financial Data
Payables turnover 6.46 6.23 6.41 5.29 5.83 6.06 6.44 5.53 5.78 5.28 5.95 6.14 6.21 4.50 5.56 5.73 7.29 6.62
Short-term Activity Ratio (no. days)
Average payables payment period1 57 59 57 69 63 60 57 66 63 69 61 59 59 81 66 64 50 55
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
Amgen Inc. 60 69 70 64 73 90 69 72 78 77 67 74 83 84
Bristol-Myers Squibb Co. 117 111 97 108 114 109 96 107 112 108 94 123 99 84
Danaher Corp. 62 65 65 63 64 67 65 73 72 82 70 66 69 76
Eli Lilly & Co. 127 134 130 138 119 106 86 87 70 83 82 85 97 107
Gilead Sciences Inc. 34 31 37 40 41 58 33 31 32 39 40 42 42 67
Johnson & Johnson 113 132 111 133 120 137 118 116 112 135 110 108 109 122
Merck & Co. Inc. 81 89 80 80 84 89 71 75 86 123 80 93 96 108
Pfizer Inc. 87 98 72 93 76 72 66 59 55 66 71 98 136 181
Regeneron Pharmaceuticals Inc. 137 122 106 116 136 138 98 91 68 84 86 107 164 155
Thermo Fisher Scientific Inc. 37 41 35 34 39 48 37 41 46 53 44 41 45 49
Vertex Pharmaceuticals Inc. 96 106 117 115 107 103 44 73 66 79 54 57 61 77

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), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

1 Q1 2024 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 6.46 = 57

2 Click competitor name to see calculations.


Payables Turnover Ratio
The payables turnover ratio shows variability throughout the analyzed periods, beginning at 6.62 and experiencing an increase to 7.29, followed by a decline to a low of 4.50. Subsequent quarters reveal fluctuations between approximately 5.28 and 6.44, with a general stabilization in the latter periods. The ratio ended at 6.46, indicating a recovery from earlier lows. This pattern suggests intermittent changes in how quickly payables are settled relative to purchases, potentially influenced by operational cycles or supplier payment strategies.
Average Payables Payment Period
The average payables payment period displays an inverse relationship to the turnover ratio and ranges from a high of 81 days to a low of 50 days across the observed quarters. Initial periods show an increase from 55 to 81 days, implying slower payment to suppliers during these months. Subsequently, the payment period reduces to around 57–60 days in the latest quarters, indicating quicker settlements. The fluctuation between longer and shorter payment periods reflects adjustments in cash management or supplier terms affecting payment timelines.
Overall Analysis
The data suggests a cyclical pattern in payables management, with periods of extended payment timelines followed by quicker turnover and vice versa. The alternating trends in payables turnover ratio and average payment period denote strategic or operational responses to external or internal factors. Toward the later quarters, a tendency towards more consistent and moderately brisk payment practices appears, as evidenced by the stabilization of both metrics around mid-range values.

Cash Conversion Cycle

Zoetis Inc., cash conversion cycle calculation (quarterly data)

No. days

Microsoft Excel
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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Selected Financial Data
Average inventory processing period 370 365 403 402 378 349 350 338 323 305 297 291 289 289 299 301 280 258
Average receivable collection period 54 56 55 59 53 55 54 59 57 53 55 58 59 55 56 57 56 63
Average payables payment period 57 59 57 69 63 60 57 66 63 69 61 59 59 81 66 64 50 55
Short-term Activity Ratio
Cash conversion cycle1 367 362 401 392 368 344 347 331 317 289 291 290 289 263 289 294 286 266
Benchmarks
Cash Conversion Cycle, Competitors2
Amgen Inc. 349 441 277 285 290 273 282 267 245 228 243 233 223 215
Danaher Corp. 88 91 98 94 93 81 82 79 75 63 75 75 73 75
Eli Lilly & Co. 265 261 224 222 248 219 194 197 198 197 200 198 200 245
Gilead Sciences Inc. 130 132 132 123 118 104 104 105 100 111 135 138 146 140
Johnson & Johnson 109 86 100 99 100 72 78 82 80 51 78 78 84 58
Merck & Co. Inc. 138 118 123 126 116 93 106 106 113 105 120 99 121 101
Pfizer Inc. 155 120 124 113 91 63 94 96 96 93 123 175 226 226
Regeneron Pharmaceuticals Inc. 562 555 558 564 564 584 490 420 326 345 476 544 655 647
Thermo Fisher Scientific Inc. 105 101 111 112 106 97 111 116 118 115 102 102 102 107
Vertex Pharmaceuticals Inc. 190 166 154 137 131 112 150 120 122 119 144 139 137 114

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), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

1 Q1 2024 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 370 + 5457 = 367

2 Click competitor name to see calculations.


Inventory Processing Period
The average inventory processing period shows a generally increasing trend from March 31, 2020, starting at 258 days and rising to a peak of 403 days by September 30, 2023. Following this peak, there is a slight decrease to 365 days on December 31, 2023, before increasing marginally again to 370 days by March 31, 2024. This indicates a lengthening in the time inventory remains in the system over the analyzed period, with a notable acceleration from mid-2021 onward.
Receivable Collection Period
The average receivable collection period fluctuates moderately throughout the periods, starting at 63 days in March 31, 2020, and generally oscillating between 53 and 59 days thereafter. There is no consistent upward or downward trend, but the values remain relatively stable, indicating consistent credit collection practices over time.
Payables Payment Period
The average payables payment period manifests variability, beginning at 55 days on March 31, 2020, dipping to 50 days by June 30, 2020, and then increasing sharply to 81 days on March 31, 2021. Following this peak, the period decreases to 57 days by March 31, 2024, with intermittent fluctuations. This suggests an initial extension in payment terms followed by a tightening in payables management in more recent quarters.
Cash Conversion Cycle
The cash conversion cycle closely mirrors the inventory processing period, starting at 266 days on March 31, 2020, and rising steadily to 401 days by September 30, 2023. Subsequently, a decrease to 362 days is observed by December 31, 2023, with a slight increase to 367 days by March 31, 2024. This pattern reflects the impact of longer inventory holding periods and the interplay with receivables and payables, indicating a lengthening of the cash conversion period overall, which may impact liquidity.