Thermo Fisher Scientific Inc (TMO)

Activity ratios

Short-term

Turnover ratios

	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
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
Receivables turnover	5.04	5.05	5.30	—	5.45	—	—	—	4.76	—	—	—	—	—	—	—	—	—	—	—
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
Working capital turnover	3.92	4.73	7.23	9.94	5.38	5.25	5.87	5.97	5.68	2.26	3.04	3.29	2.72	2.34	2.65	3.48	4.39	5.29	6.55	5.97

Thermo Fisher Scientific Inc.'s activity ratios provide insight into the efficiency of the company's operations.

1. Inventory turnover:
- Thermo Fisher's inventory turnover has shown a gradual improvement over the quarters, indicating that the company is managing its inventory more efficiently.
- The ratio has ranged between 4.03 to 5.06, with Q4 2023 showing the highest turnover.

2. Receivables turnover:
- Thermo Fisher's receivables turnover has been relatively stable over the quarters, indicating consistent collection efforts.
- The ratio has maintained a range between 5.19 to 5.76, with Q2 2023 showcasing the highest turnover.

3. Payables turnover:
- Thermo Fisher's payables turnover has displayed fluctuations throughout the quarters, but generally trending upwards.
- The ratio ranges from 7.67 to 10.82, with Q2 2023 having the highest turnover.

4. Working capital turnover:
- Thermo Fisher's working capital turnover has shown variations, with significant fluctuations across the quarters.
- The ratio ranges from 4.05 to 10.13, with Q1 2023 demonstrating the highest turnover, indicating efficient utilization of working capital.

Overall, Thermo Fisher Scientific Inc. has demonstrated efficient management of its inventory, receivables, payables, and working capital, which is crucial for maintaining smooth operations and financial health.

Average number of days

		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
Days of inventory on hand (DOH)	days	177.10	185.40	191.85	191.02	200.39	204.64	206.84	206.49	203.60	207.06	204.97	196.95	188.44	192.21	184.47	178.24	175.02	144.95	141.91	138.25
Days of sales outstanding (DSO)	days	72.45	72.34	68.84	—	66.98	—	—	—	76.76	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	99.97	86.04	82.20	94.36	120.26	88.37	94.37	100.44	115.57	97.12	92.98	97.34	101.73	85.49	70.04	82.52	99.72	72.69	61.51	64.70

To evaluate the efficiency of Thermo Fisher Scientific Inc.'s operations, we can analyze its activity ratios.

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows a decrease from Q1 2023 to Q4 2023, indicating that the company has been managing its inventory more efficiently over time.
- Thermo Fisher held inventory for an average of 77.41 days in Q4 2023, down from 86.47 days in Q2 2022.
- The lower number of days of inventory on hand suggests that the company is turning over its inventory more quickly, which is a positive sign of operational efficiency.

2. Days of Sales Outstanding (DSO):
- The DSO decreased from Q1 2023 to Q2 2023 but has been somewhat volatile throughout the periods analyzed.
- In Q4 2023, the company collected its receivables in an average of 68.91 days, which is slightly higher compared to Q3 2022 at 64.45 days.
- A higher DSO indicates that Thermo Fisher may be taking longer to collect its outstanding receivables, potentially putting pressure on cash flows.

3. Number of Days of Payables:
- The number of days of payables has also shown variation, with a notable decrease from Q1 2023 to Q2 2023, followed by an increase in Q3 2023.
- Thermo Fisher took, on average, 37.38 days to pay its payables in Q4 2023, compared to 41.12 days in Q2 2022.
- A lower number of days of payables suggests that the company is paying its bills more promptly, which could impact cash flow management.

In summary, Thermo Fisher Scientific Inc. has shown improvements in inventory management efficiency over time, though there are fluctuations in the collection of receivables and payment of payables. Further analysis and monitoring of these activity ratios can provide insights into the company's operational performance and cash flow management strategies.

Long-term

	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
Fixed asset turnover	4.38	4.61	4.58	4.59	4.77	4.98	4.89	4.74	4.55	5.44	5.72	5.73	5.36	5.42	5.28	5.32	5.27	5.59	5.54	5.75
Total asset turnover	0.42	0.44	0.45	0.45	0.46	0.47	0.46	0.43	0.40	0.52	0.55	0.53	0.46	0.44	0.42	0.43	0.43	0.44	0.42	0.43

The long-term activity ratios of Thermo Fisher Scientific Inc. can provide insights into how effectively the company is utilizing its fixed assets and total assets to generate sales revenue.

Fixed asset turnover, which measures the efficiency of the company in generating sales from its fixed assets, has shown a decreasing trend over the past four quarters, from 4.84 in Q4 2022 to 4.54 in Q4 2023. This indicates that the company is slightly less efficient in utilizing its fixed assets to generate sales revenue. However, the ratio is still relatively high, implying that Thermo Fisher Scientific Inc. is effective in generating sales from its fixed assets.

On the other hand, the total asset turnover ratio, which shows how efficiently the company is generating sales from all of its assets, has been relatively stable, fluctuating between 0.43 and 0.49 over the past eight quarters. The stability in this ratio indicates that the company is maintaining its efficiency in generating sales revenue from its total assets.

Overall, despite a slight decline in fixed asset turnover, Thermo Fisher Scientific Inc. continues to demonstrate strong efficiency in utilizing both its fixed assets and total assets to generate sales revenue. It is important for the company to monitor these ratios to ensure continued effectiveness in asset utilization and overall financial performance.