Thermo Fisher Scientific Inc (TMO)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Cost of revenue (ttm)	US$ in thousands	25,087,000	24,985,000	24,860,000	24,986,000	25,295,000	25,620,000	25,721,000	25,638,000	25,415,000	24,002,000	22,289,000	20,634,000	18,977,000	18,542,000	18,074,000	16,905,000	15,713,000	14,516,000	13,835,000	13,912,000
Inventory	US$ in thousands	4,978,000	5,430,000	5,198,000	5,133,000	5,088,000	5,404,000	5,655,000	5,664,000	5,634,000	5,722,000	5,668,000	5,483,000	5,051,000	4,906,000	4,625,000	4,342,000	4,029,000	3,829,000	3,648,000	3,454,000
Inventory turnover		5.04	4.60	4.78	4.87	4.97	4.74	4.55	4.53	4.51	4.19	3.93	3.76	3.76	3.78	3.91	3.89	3.90	3.79	3.79	4.03

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $25,087,000K ÷ $4,978,000K
= 5.04

Thermo Fisher Scientific Inc's inventory turnover has shown a gradual increase from 4.03 times in March 2020 to 5.04 times in December 2024. This indicates that the company is efficiently managing its inventory levels and selling its products more frequently within each year, resulting in a higher inventory turnover ratio.

The most significant improvement in inventory turnover occurred between September 30, 2022, and December 31, 2022, where the ratio increased from 4.19 to 4.51. This indicates that the company improved its inventory management practices during this period.

Overall, the consistent upward trend in inventory turnover over the years reflects Thermo Fisher Scientific Inc's effective inventory management strategy, which is important for optimizing working capital and maximizing profitability. A higher inventory turnover ratio typically signifies that the company is selling its products quickly, minimizing obsolete inventory, and efficiently utilizing its resources.