Thermo Fisher Scientific Inc (TMO)

Receivables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	41,415,000	44,225,000	37,933,000	31,689,000	24,734,000
Receivables	US$ in thousands	8,221,000	8,115,000	7,977,000	5,741,000	4,349,000
Receivables turnover		5.04	5.45	4.76	5.52	5.69

December 31, 2023 calculation

Receivables turnover = Revenue ÷ Receivables
= $41,415,000K ÷ $8,221,000K
= 5.04

The receivables turnover ratio for Thermo Fisher Scientific Inc. has shown some fluctuation over the past five years. In 2023, the company's receivables turnover ratio was 5.21, which indicates that the company collected its accounts receivable approximately 5.21 times during the year.

Compared to the previous years, the receivables turnover ratio decreased slightly from 5.53 in 2022 and 5.87 in 2019 but was higher than the ratio in 2021. This indicates that the company took slightly longer to collect its accounts receivable in 2023 compared to the previous year but still managed to maintain a relatively efficient collection process.

A higher receivables turnover ratio generally indicates a more efficient credit and collection process, as the company is able to convert its accounts receivable into cash more quickly. However, it is important to note that changes in the receivables turnover ratio can be influenced by various factors such as changes in the company's credit policies, industry trends, or customer payment behavior.

Overall, Thermo Fisher Scientific Inc.'s receivables turnover ratio in 2023, while slightly lower than the previous year, suggests that the company has been effective in managing its accounts receivable and converting them into cash. Monitoring this ratio over time can provide insights into the company's collection efficiency and financial health.