Thermo Fisher Scientific Inc (TMO)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 1.66 1.63 1.72 1.70 1.75 1.63 1.42 1.27 1.48 1.74 1.65 1.56 1.50 3.19 2.78 2.53 2.13 2.93 2.62 2.32
Quick ratio 0.42 0.46 0.60 0.52 0.58 0.43 0.22 0.22 0.50 0.26 0.17 0.24 0.33 1.55 1.02 0.82 1.00 1.32 0.97 0.56
Cash ratio 0.42 0.46 0.60 0.52 0.58 0.43 0.22 0.22 0.50 0.26 0.17 0.24 0.33 1.55 1.02 0.82 1.00 1.32 0.97 0.56

Thermo Fisher Scientific Inc's liquidity ratios have shown fluctuations over the reported periods. The current ratio, which measures the company's ability to pay its short-term obligations using current assets, has generally been above 1, indicating healthy liquidity levels. However, there was a notable decline in the current ratio from December 31, 2021 to March 31, 2022, which may raise concerns about short-term liquidity.

The quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, has also demonstrated variability. While the quick ratio was generally below 1 in the earlier periods, indicating potential difficulties in meeting immediate obligations, it improved over time, reaching levels above 1 from September 30, 2021 onwards. This improvement suggests a better ability to cover short-term liabilities with highly liquid assets.

The cash ratio, which is the most conservative liquidity metric considering only cash and cash equivalents, remained relatively stable over the reporting periods. The company maintained a healthy cash position, with a ratio above 0.5 in most instances, indicating a strong ability to settle immediate obligations using cash reserves.

Overall, Thermo Fisher Scientific Inc's liquidity ratios reflect a mixed performance with some fluctuations, but generally indicating sound liquidity positions over the reported periods. However, a declining trend in certain ratios may warrant further monitoring to ensure the company's ability to meet short-term financial commitments.

See also:

Thermo Fisher Scientific Inc Liquidity Ratios (Quarterly Data)

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 72.43 79.33 76.32 74.98 73.42 76.99 80.25 80.64 80.91 87.01 92.82 96.99 97.15 96.57 93.40 93.75 93.59 96.28 96.24 90.62

Thermo Fisher Scientific Inc's cash conversion cycle, which represents the period it takes for the company to convert its investments in inventory and other resources into cash flows from sales, has shown fluctuations over the reported periods.

The cash conversion cycle for Thermo Fisher Scientific Inc ranged from 80.25 days to 97.15 days during the period from March 31, 2020, to December 31, 2024. Initially, there was a slight increase in the cash conversion cycle, peaking at 97.15 days on December 31, 2021. However, from March 31, 2022, there was a gradual decline in the cash conversion cycle, reaching its lowest point of 72.43 days on December 31, 2024.

Overall, a decreasing trend in the cash conversion cycle is considered positive as it indicates that the company is managing its working capital more efficiently, leading to quicker conversion of investments into cash. This could potentially signify effective inventory management, quicker collection of receivables, or extending payables judiciously.

Monitoring the cash conversion cycle is important for Thermo Fisher Scientific Inc to assess its operational efficiency and liquidity management. A shorter cash conversion cycle can improve the company's cash flows and working capital management, ultimately contributing to its overall financial health and sustainability.