Thermo Fisher Scientific Inc (TMO)

Payables 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
Payables	US$ in thousands	2,872,000	2,508,000	2,423,000	2,798,000	3,381,000	2,471,000	2,586,000	2,667,000	2,867,000	2,301,000	2,098,000	2,146,000	2,175,000	1,703,000	1,385,000	1,599,000	1,920,000	1,659,000	1,391,000	1,462,000
Payables turnover		3.65	4.24	4.44	3.87	3.04	4.13	3.87	3.63	3.16	3.76	3.93	3.75	3.59	4.27	5.21	4.42	3.66	5.02	5.93	5.64

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $10,486,000K ÷ $2,872,000K
= 3.65

Thermo Fisher Scientific Inc.'s payables turnover ratio has shown fluctuations over the last eight quarters. The payables turnover ratio is a measure of how efficiently a company is managing its accounts payable by calculating how many times a company pays off its average accounts payable balance in a given period.

Based on the data provided:
- The payables turnover ratio ranged from 7.67 to 10.82 during the period.
- The highest payables turnover ratio was observed in Q2 2023 at 10.82, indicating that the company was able to efficiently pay off its accounts payable almost 11 times during that quarter.
- The lowest payables turnover ratio was in Q4 2022 at 7.67, suggesting a lower rate of paying off accounts payable compared to other quarters.
- Overall, Thermo Fisher Scientific Inc. maintained an average payables turnover ratio of approximately 9.39 during the given period.

A higher payables turnover ratio generally indicates that the company is managing its payables efficiently and is paying off its suppliers more frequently. However, it could also suggest that the company is taking advantage of early payment discounts. On the other hand, a lower ratio may indicate that the company is taking longer to pay its suppliers, potentially impacting relationships or incurring additional costs.

It would be important to perform a trend analysis over a longer period and compare these ratios with industry peers to gain a better understanding of Thermo Fisher Scientific Inc.'s payables management efficiency.