Thermo Fisher Scientific Inc (TMO)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 6,859,000 | 8,393,000 | 10,028,000 | 7,794,000 | 4,594,000 |
| Long-term debt | US$ in thousands | — | — | — | 19,107,000 | 17,076,000 |
| Total stockholders’ equity | US$ in thousands | 46,735,000 | 43,978,000 | 40,793,000 | 34,507,000 | 29,675,000 |
| Return on total capital | 14.68% | 19.08% | 24.58% | 14.54% | 9.83% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $6,859,000K ÷ ($—K + $46,735,000K)
= 14.68%
Thermo Fisher Scientific Inc.'s return on total capital has fluctuated over the past five years, as evidenced by the following data: 8.89% in 2023, 10.62% in 2022, 13.51% in 2021, 14.03% in 2020, and 8.82% in 2019. The return on total capital measures the efficiency of the company in generating profit from its total invested capital, including both debt and equity.
The decreasing trend from 2019 to 2023 indicates a potential decline in the company's ability to generate profit relative to its total capital base. This trend could be a cause for concern as it may suggest a decrease in the company's overall profitability and efficiency in utilizing its capital resources.
Further analysis would be necessary to determine the specific factors contributing to the changes in Thermo Fisher Scientific Inc.'s return on total capital over the years and to develop strategies to improve this key financial metric.
Peer comparison
Dec 31, 2023