Stock Analysis on Net
Stock Analysis on Net

Zoetis Inc. (NYSE:ZTS)

$24.99

Analysis of Income Taxes

Microsoft Excel

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Income Tax Expense (Benefit)

Zoetis Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Federal
State and local
U.S. tax provision
International
Current income taxes
Federal
State and local
U.S. tax provision
International
Deferred income taxes
Provision for taxes on income

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).

Item Description The company
Current income taxes Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Zoetis Inc. current income taxes increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.
Deferred income taxes Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Zoetis Inc. deferred income taxes decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Provision for taxes on income Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Zoetis Inc. provision for taxes on income increased from 2021 to 2022 and from 2022 to 2023.

Effective Income Tax Rate (EITR)

Zoetis Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
U.S. statutory income tax rate
State and local taxes, net of federal benefits
Unrecognized tax benefits and tax settlements and resolution of certain tax positions
Foreign Derived Intangible Income
U.S. Research and Development Tax Credit
Share-based payments
Non-deductible/non-taxable items
Taxation of non-U.S. operations
All other, net
Effective tax rate

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).

Item Description The company
Effective tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Zoetis Inc. effective tax rate increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Components of Deferred Tax Assets and Liabilities

Zoetis Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Prepaid/deferred items
Inventories
Capitalized R&D for tax
Identifiable intangible assets
Property, plant and equipment
Employee benefits
Restructuring and other charges
Legal and product liability reserves
Net operating loss/credit carryforwards
Unremitted earnings
All other
Subtotal
Valuation allowance
Net deferred tax asset (liability)

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).

Item Description The company
Net deferred tax asset (liability) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Zoetis Inc. net deferred tax asset (liability) increased from 2021 to 2022 and from 2022 to 2023.

Deferred Tax Assets and Liabilities, Classification

Zoetis Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Noncurrent deferred tax assets
Noncurrent deferred tax liabilities

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).

Item Description The company
Noncurrent deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Zoetis Inc. noncurrent deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
Noncurrent deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Zoetis Inc. noncurrent deferred tax liabilities decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.

Adjustments to Financial Statements: Removal of Deferred Taxes

Zoetis Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported)
Less: Noncurrent deferred tax assets, net
Total assets (adjusted)
Adjustment to Total Liabilities
Total liabilities (as reported)
Less: Noncurrent deferred tax liabilities, net
Total liabilities (adjusted)
Adjustment to Total Zoetis Inc. Equity
Total Zoetis Inc. equity (as reported)
Less: Net deferred tax assets (liabilities)
Total Zoetis Inc. equity (adjusted)
Adjustment to Net Income Attributable To Zoetis Inc.
Net income attributable to Zoetis Inc. (as reported)
Add: Deferred income tax expense (benefit)
Net income attributable to Zoetis Inc. (adjusted)

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).

Zoetis Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Zoetis Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Total Asset Turnover
Reported total asset turnover
Adjusted total asset turnover
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

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).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Zoetis Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Zoetis Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Zoetis Inc. adjusted financial leverage ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Zoetis Inc. adjusted ROE improved from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Zoetis Inc. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Zoetis Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Zoetis Inc.
Revenue
Profitability Ratio
Net profit margin1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Zoetis Inc.
Revenue
Profitability Ratio
Adjusted net profit margin2

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).

2023 Calculations

1 Net profit margin = 100 × Net income attributable to Zoetis Inc. ÷ Revenue
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Zoetis Inc. ÷ Revenue
= 100 × ÷ =

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Zoetis Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Revenue
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenue
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

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).

2023 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= ÷ =

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Zoetis Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets
Total Zoetis Inc. equity
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted total Zoetis Inc. equity
Solvency Ratio
Adjusted financial leverage2

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).

2023 Calculations

1 Financial leverage = Total assets ÷ Total Zoetis Inc. equity
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Zoetis Inc. equity
= ÷ =

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Zoetis Inc. adjusted financial leverage ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Zoetis Inc.
Total Zoetis Inc. equity
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Zoetis Inc.
Adjusted total Zoetis Inc. equity
Profitability Ratio
Adjusted ROE2

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).

2023 Calculations

1 ROE = 100 × Net income attributable to Zoetis Inc. ÷ Total Zoetis Inc. equity
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net income attributable to Zoetis Inc. ÷ Adjusted total Zoetis Inc. equity
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Zoetis Inc. adjusted ROE improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Zoetis Inc.
Total assets
Profitability Ratio
ROA1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Zoetis Inc.
Adjusted total assets
Profitability Ratio
Adjusted ROA2

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).

2023 Calculations

1 ROA = 100 × Net income attributable to Zoetis Inc. ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Adjusted net income attributable to Zoetis Inc. ÷ Adjusted total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Zoetis Inc. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.