Thermo Fisher Scientific Inc (TMO)

Inventory turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	10,486,000	10,639,000	10,759,000	10,823,000	10,262,000	10,206,000	10,002,000	9,692,000	9,055,000	8,648,000	8,236,000	8,047,000	7,804,000	7,271,000	7,218,000	7,073,000	7,028,000	8,330,000	8,254,000	8,248,000
Inventory	US$ in thousands	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	3,370,000	3,308,000	3,209,000	3,124,000
Inventory turnover		2.06	1.97	1.90	1.91	1.82	1.78	1.76	1.77	1.79	1.76	1.78	1.85	1.94	1.90	1.98	2.05	2.09	2.52	2.57	2.64

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $10,486,000K ÷ $5,088,000K
= 2.06

Thermo Fisher Scientific Inc.'s inventory turnover has exhibited a generally positive trend over the past eight quarters. The company's inventory turnover ratio has improved steadily from 3.87 in Q1 2022 to 5.06 in Q4 2023. This indicates that the company is selling its inventory more frequently or efficiently, potentially leading to better cash flow and working capital management.

The consistent increase in inventory turnover suggests that Thermo Fisher Scientific Inc. is effectively managing its inventory levels and turning over stock more rapidly. This could be attributed to effective inventory management practices, streamlined supply chain operations, or increased demand for its products.

A rising inventory turnover ratio could also indicate that the company is effectively managing its production and sales processes, ensuring that inventory is not sitting idle for extended periods. Overall, Thermo Fisher Scientific Inc.'s improving inventory turnover ratio reflects positively on its operational efficiency and suggests effective inventory management strategies are in place.