Zoetis Inc. — Earnings Quality Grade F
ZTS · Healthcare
Major red flags
Screening Summary
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 61 days, change +9 days YoY
AR growth 20.8% exceeds revenue growth 2.3%
Revenue 2.3%, CFFO -1.7%. Cash follows revenue
Expense Quality
Inventory 5.4% vs COGS -1.9%. Normal
CapEx growth -5.2% vs revenue 2.3%. Normal
SG&A/Gross Profit = 35.0%. Normal
Gross margin 71.8%, change +1.2pp. Stable
Cash Flow Quality
CFFO/NI = 1.09. Profits backed by cash
FCF $2.3B, FCF/NI = 0.85
Accruals ratio = -1.5%. Low accruals
Cash $2.3B covers only 25% of debt $9.2B
Balance Sheet Health
Goodwill+Intangibles $3.8B = 113% of equity. Over 50%
Debt/EBITDA = 2.3x. Healthy
Other assets grew 31.2% vs revenue 2.3%
Write-offs normal
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles change -2% YoY. Normal
Manipulation Score
M-Score = -2.45 (< -2.22). Unlikely manipulator
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-09