Thermo Fisher Scientific Inc (TMO)

Working capital 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
Total current assets	US$ in thousands	24,589,000	25,229,000	20,113,000	21,957,000	11,893,000
Total current liabilities	US$ in thousands	14,012,000	17,010,000	13,436,000	10,304,000	6,197,000
Working capital turnover		3.92	5.38	5.68	2.72	4.34

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $41,415,000K ÷ ($24,589,000K – $14,012,000K)
= 3.92

Thermo Fisher Scientific Inc.'s working capital turnover has exhibited fluctuations over the past five years. The working capital turnover ratio measures how efficiently the company is utilizing its working capital to generate revenue. A higher ratio indicates that the company is effectively using its current assets and liabilities to support sales.

In 2023, the working capital turnover ratio decreased to 4.05 from 5.46 in 2022. This decline suggests a potential decrease in efficiency in converting working capital into sales revenue compared to the prior year.

However, when looking at the longer-term trend, the company's working capital turnover has generally been healthy, with ratios above 4 in each of the last five years. This indicates that Thermo Fisher Scientific has been efficient in managing its working capital to drive revenue growth.

It is important to note that a working capital turnover ratio should be analyzed in conjunction with other financial metrics and industry benchmarks to gain a more comprehensive understanding of the company's overall operational efficiency and financial health.