Thermo Fisher Scientific Inc (TMO)

Fixed asset turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	41,415,000	44,225,000	37,933,000	31,689,000	24,734,000
Property, plant and equipment	US$ in thousands	9,448,000	9,280,000	8,333,000	5,912,000	4,749,000
Fixed asset turnover		4.38	4.77	4.55	5.36	5.21

December 31, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $41,415,000K ÷ $9,448,000K
= 4.38

Thermo Fisher Scientific Inc.'s fixed asset turnover has shown a decreasing trend over the past five years, dropping from 5.38 in 2019 to 4.54 in 2023. This ratio indicates that the company generated $4.54 in revenue for every dollar invested in fixed assets in 2023.

While a high fixed asset turnover ratio is generally favorable as it reflects efficient asset utilization, the decline in Thermo Fisher's ratio suggests that the company may be less efficient in generating sales from its fixed assets in recent years.

Further analysis would be required to understand the underlying reasons for the decrease in fixed asset turnover. Factors such as changes in the company's operational efficiency, investment in new fixed assets, or shifts in the industry dynamics could all potentially contribute to this trend. Investing in identifying and addressing the root causes of the declining fixed asset turnover could help Thermo Fisher improve its operational efficiency and profitability in the future.