Thermo Fisher Scientific Inc (TMO)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover	4.98	4.97	4.51	3.76	3.90
Receivables turnover	—	—	—	—	—
Payables turnover	—	—	—	—	—
Working capital turnover	4.87	4.05	5.46	5.87	2.76

Thermo Fisher Scientific Inc's inventory turnover has shown a slightly decreasing trend over the years, dropping from 3.90 in 2020 to 3.76 in 2021 before increasing to 4.51 in 2022 and reaching 4.98 in 2024. This suggests that the company's ability to convert inventory into sales has improved gradually, with a notable uptick in 2024.

There is no data available for Thermo Fisher Scientific Inc's receivables turnover or payables turnover, indicating a lack of information regarding how quickly the company collects on its receivables or pays its suppliers.

Regarding the working capital turnover, the ratio has fluctuated over the period under review. It started at 2.76 in 2020 and then significantly increased to 5.87 in 2021. Subsequently, it decreased to 5.46 in 2022, dropped further to 4.05 in 2023, but rose again to 4.87 in 2024. This suggests that the company may have efficiently utilized its working capital in 2021 but faced challenges in managing its working capital effectively in 2023, albeit showing some improvement in 2024.

Overall, Thermo Fisher Scientific Inc's activity ratios reflect varying levels of efficiency in managing its inventory and working capital over the years, with some improvements observed in inventory turnover and working capital turnover. However, the lack of data on receivables and payables turnover impedes a comprehensive analysis of the company's overall efficiency in managing its operating cycle.

Average number of days

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	73.35	73.42	80.91	97.15	93.59
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—

Thermo Fisher Scientific Inc's Days of Inventory on Hand (DOH) has shown a fluctuating trend over the past five years, starting at 93.59 days in December 2020, increasing to 97.15 days by December 2021, then decreasing to 80.91 days by December 2022, and further declining to 73.42 days by December 2023 and 73.35 days by December 2024. The general downward trend indicates an improvement in inventory management efficiency over time, as the company is able to hold less inventory on hand.

On the other hand, the Days of Sales Outstanding (DSO) and Number of Days of Payables data are not provided, indicating that information about the company's accounts receivable collection period and accounts payable payment period is not available for analysis. Given this lack of data, it is not possible to evaluate the efficiency of Thermo Fisher Scientific Inc in collecting receivables and managing payables.

Overall, based on the available Days of Inventory on Hand data, it appears that Thermo Fisher Scientific Inc has been successful in improving its inventory turnover and management efficiency, which can lead to cost savings and better working capital management. However, a comprehensive analysis of all three activity ratios would provide a more holistic view of the company's working capital management and operational efficiency.

Long-term

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Fixed asset turnover	—	—	4.84	4.71	5.45
Total asset turnover	0.44	0.43	0.46	0.41	0.47

Thermo Fisher Scientific Inc's long-term activity ratios, particularly the fixed asset turnover and total asset turnover, provide insights into the company's efficiency in utilizing its assets to generate revenue.

1. Fixed Asset Turnover:
- In 2020, the fixed asset turnover ratio stood at 5.45, indicating that Thermo Fisher generated $5.45 in sales for every $1 of fixed assets.
- This ratio decreased to 4.71 in 2021 and then slightly increased to 4.84 in 2022, reflecting a decline in the efficiency of utilizing fixed assets to generate revenue.
- However, the data for 2023 and 2024 are not available for analysis, so the trend beyond 2022 is uncertain.

2. Total Asset Turnover:
- Thermo Fisher's total asset turnover ratio declined from 0.47 in 2020 to 0.41 in 2021, indicating a decrease in revenue generated per dollar of total assets.
- The ratio improved to 0.46 in 2022 but slightly dropped to 0.43 in 2023 before rising again to 0.44 in 2024.
- Overall, the total asset turnover reflects the company's ability to efficiently use its total assets to generate sales revenue over the years.

In conclusion, the fixed asset turnover and total asset turnover ratios suggest fluctuations in Thermo Fisher Scientific Inc's efficiency in utilizing its assets to generate revenue. Monitoring these ratios can help assess the company's operational performance and asset management strategies.