Thermo Fisher Scientific Inc (TMO)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	11,196,000	11,456,000	9,927,000	8,648,000	7,923,000
Inventory	US$ in thousands	5,088,000	5,634,000	5,051,000	4,029,000	3,370,000
Inventory turnover		2.20	2.03	1.97	2.15	2.35

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $11,196,000K ÷ $5,088,000K
= 2.20

Thermo Fisher Scientific Inc.'s inventory turnover has been showing a generally increasing trend over the past five years, from 4.22 in 2019 to 5.06 in 2023. This indicates that the company's efficiency in managing its inventory has been improving. A higher inventory turnover ratio suggests that the company is selling its inventory more frequently within a given period, which can be a positive sign of effective inventory management and liquidity. Thermo Fisher Scientific Inc.'s inventory turnover ratio of 5.06 in 2023 means that the company's inventory was turned over approximately 5.06 times during the year, reflecting a relatively healthy rate of inventory utilization. This improvement in inventory turnover may be attributed to effective inventory management practices, demand forecasting, and supply chain efficiency within the company.