Thermo Fisher Scientific Inc (TMO)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.28 | 0.29 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.36 | 0.37 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.55 | 0.58 |
| Financial leverage ratio | 2.11 | 2.21 | 2.33 | 2.00 | 1.97 |
Thermo Fisher Scientific Inc.'s solvency ratios indicate the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has remained relatively stable over the past five years, ranging from 0.30 in 2019 to 0.37 in 2021, and then dropping to 0.35 in 2022 and 2023. This suggests that the company has been effectively managing its debt in relation to its assets.
The debt-to-capital ratio and debt-to-equity ratio both show a similar trend of fluctuation over the years. The debt-to-capital ratio has ranged from 0.37 in 2019 to 0.46 in 2021, then decreased to 0.44 in 2022 and 0.43 in 2023. Meanwhile, the debt-to-equity ratio has fluctuated between 0.60 in 2019 to 0.85 in 2021, before decreasing to 0.78 in 2022 and 0.75 in 2023. These ratios indicate the proportion of debt in the company's capital structure and equity base, suggesting that Thermo Fisher has maintained a reasonable balance between debt and equity financing.
The financial leverage ratio, which measures the company's reliance on debt, has also shown fluctuations over the years, ranging from 1.97 in 2019 to 2.33 in 2021 before decreasing to 2.21 in 2022 and 2.11 in 2023. This indicates that while the company has increased its leverage in recent years, it has managed to reduce it slightly in the most recent period.
Overall, Thermo Fisher Scientific Inc. appears to have a solid solvency position, with manageable levels of debt in relation to its assets, capital, equity, and leverage. However, it will be essential for the company to continue monitoring and maintaining a healthy balance between debt and equity to ensure long-term financial stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 4.99 | 11.56 | 18.71 | 14.09 | 6.80 |
Thermo Fisher Scientific Inc.'s interest coverage ratio has exhibited a generally positive trend over the past five years, indicating the company's ability to comfortably cover its interest expenses with its earnings before interest and taxes (EBIT). The interest coverage ratio was highest in 2021 at 20.73, demonstrating a strong ability to meet interest obligations. The ratio decreased slightly in 2023 to 14.64, but it still remains at a healthy level.
With consistently high interest coverage ratios above 1 (typical threshold for acceptable coverage), Thermo Fisher Scientific Inc. appears to have a solid financial position and a low risk of defaulting on its interest payments. The trend suggests that the company has been effectively managing its debt levels relative to its operating income, leading to a stable and sustainable financial position.