Thermo Fisher Scientific Inc (TMO)

Working capital turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	42,879,000	42,857,000	44,915,000	39,211,000	32,218,000
Total current assets	US$ in thousands	22,137,000	24,589,000	25,229,000	20,113,000	21,957,000
Total current liabilities	US$ in thousands	13,332,000	14,012,000	17,010,000	13,436,000	10,304,000
Working capital turnover		4.87	4.05	5.46	5.87	2.76

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $42,879,000K ÷ ($22,137,000K – $13,332,000K)
= 4.87

Working capital turnover is a financial metric that indicates how efficiently a company utilizes its working capital to generate sales revenue. Thermo Fisher Scientific Inc's working capital turnover has exhibited fluctuations over the past five years.

From December 31, 2020, to December 31, 2021, the working capital turnover ratio improved significantly from 2.76 to 5.87, indicating a notable increase in the company's efficiency in utilizing its working capital to support sales activities.

However, there was a slight decline in the ratio from December 31, 2021, to December 31, 2022, as it decreased to 5.46. Despite this decline, the company continued to demonstrate effective management of its working capital resources to drive sales.

By December 31, 2023, the working capital turnover ratio dropped further to 4.05, suggesting a potential decrease in efficiency in converting working capital into sales revenue during that period.

There was a slight recovery in efficiency by December 31, 2024, with the ratio increasing to 4.87. Although it improved compared to the previous year, it remained below the levels observed in 2021 and 2022.

Overall, while Thermo Fisher Scientific Inc's working capital turnover ratio fluctuated over the analyzed period, the company generally maintained a reasonably efficient utilization of working capital to support its sales activities. Analyzing trends in this ratio can provide insights into the company's operational efficiency and management of working capital resources.