Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Thermo Fisher Scientific Inc. (NYSE:TMO)

Analysis of Goodwill and Intangible Assets

Advanced level

Goodwill and Intangible Asset Disclosure

Thermo Fisher Scientific Inc., balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Customer relationships 16,593  16,906  17,120  17,356  13,167 
Product technology 5,523  5,544  6,036  6,046  5,680 
Tradenames 1,213  1,300  1,495  1,538  1,452 
Other —  9  33  34  33 
Acquisition-related intangible assets, definite lived, gross 23,329  23,759  24,684  24,974  20,332 
Accumulated amortization (11,879) (10,996) (10,973) (9,564) (7,705)
Acquisition-related intangible assets, definite lived, net 11,450  12,763  13,711  15,410  12,628 
Tradenames 1,235  1,235  1,235  1,235  1,235 
In-process research and development —  16  32  39  107 
Acquisition-related intangible assets, indefinite lived 1,235  1,251  1,267  1,274  1,341 
Acquisition-related intangible assets 12,685  14,014  14,978  16,684  13,969 
Goodwill 26,041  25,714  25,347  25,290  21,328 
Acquisition-related intangible assets and goodwill 38,726  39,728  40,325  41,974  35,297 

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28).

Item Description The company
Acquisition-related intangible assets Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Thermo Fisher Scientific Inc.’s acquisition-related intangible assets decreased from 2018 to 2019 and from 2019 to 2020.
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Thermo Fisher Scientific Inc.’s goodwill increased from 2018 to 2019 and from 2019 to 2020.
Acquisition-related intangible assets and goodwill Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Thermo Fisher Scientific Inc.’s acquisition-related intangible assets and goodwill decreased from 2018 to 2019 and from 2019 to 2020.

Adjustments to Financial Statements: Removal of Goodwill

Thermo Fisher Scientific Inc., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Adjustment to Total Assets
Total assets (as reported) 69,052  58,381  56,232  56,669  45,908 
Less: Goodwill 26,041  25,714  25,347  25,290  21,328 
Total assets (adjusted) 43,011  32,667  30,885  31,379  24,580 
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported) 34,507  29,675  27,586  25,413  21,539 
Less: Goodwill 26,041  25,714  25,347  25,290  21,328 
Shareholders’ equity (adjusted) 8,466  3,961  2,239  123  212 

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28).

Thermo Fisher Scientific Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Thermo Fisher Scientific Inc., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Total Asset Turnover
Reported total asset turnover 0.47 0.44 0.43 0.37 0.40
Adjusted total asset turnover 0.75 0.78 0.79 0.67 0.74
Financial Leverage
Reported financial leverage 2.00 1.97 2.04 2.23 2.13
Adjusted financial leverage 5.08 8.25 13.79 255.11 116.22
Return on Equity (ROE)
Reported ROE 18.47% 12.45% 10.65% 8.76% 9.39%
Adjusted ROE 75.30% 93.31% 131.22% 1,808.94% 955.93%
Return on Assets (ROA)
Reported ROA 9.23% 6.33% 5.22% 3.93% 4.40%
Adjusted ROA 14.82% 11.31% 9.51% 7.09% 8.23%

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Thermo Fisher Scientific Inc.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Thermo Fisher Scientific Inc.’s adjusted financial leverage ratio decreased from 2018 to 2019 and from 2019 to 2020.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Thermo Fisher Scientific Inc.’s adjusted ROE deteriorated from 2018 to 2019 and from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Thermo Fisher Scientific Inc.’s adjusted ROA improved from 2018 to 2019 and from 2019 to 2020.

Thermo Fisher Scientific Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Revenues 32,218  25,542  24,358  20,918  18,274 
Total assets 69,052  58,381  56,232  56,669  45,908 
Activity Ratio
Total asset turnover1 0.47 0.44 0.43 0.37 0.40
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenues 32,218  25,542  24,358  20,918  18,274 
Adjusted total assets 43,011  32,667  30,885  31,379  24,580 
Activity Ratio
Adjusted total asset turnover2 0.75 0.78 0.79 0.67 0.74

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28).

2020 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 32,218 ÷ 69,052 = 0.47

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 32,218 ÷ 43,011 = 0.75

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Thermo Fisher Scientific Inc.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Total assets 69,052  58,381  56,232  56,669  45,908 
Shareholders’ equity 34,507  29,675  27,586  25,413  21,539 
Solvency Ratio
Financial leverage1 2.00 1.97 2.04 2.23 2.13
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 43,011  32,667  30,885  31,379  24,580 
Adjusted shareholders’ equity 8,466  3,961  2,239  123  212 
Solvency Ratio
Adjusted financial leverage2 5.08 8.25 13.79 255.11 116.22

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28).

2020 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity
= 69,052 ÷ 34,507 = 2.00

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 43,011 ÷ 8,466 = 5.08

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Thermo Fisher Scientific Inc.’s adjusted financial leverage ratio decreased from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income 6,375  3,696  2,938  2,225  2,022 
Shareholders’ equity 34,507  29,675  27,586  25,413  21,539 
Profitability Ratio
ROE1 18.47% 12.45% 10.65% 8.76% 9.39%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income 6,375  3,696  2,938  2,225  2,022 
Adjusted shareholders’ equity 8,466  3,961  2,239  123  212 
Profitability Ratio
Adjusted ROE2 75.30% 93.31% 131.22% 1,808.94% 955.93%

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28).

2020 Calculations

1 ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × 6,375 ÷ 34,507 = 18.47%

2 Adjusted ROE = 100 × Net income ÷ Adjusted shareholders’ equity
= 100 × 6,375 ÷ 8,466 = 75.30%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Thermo Fisher Scientific Inc.’s adjusted ROE deteriorated from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income 6,375  3,696  2,938  2,225  2,022 
Total assets 69,052  58,381  56,232  56,669  45,908 
Profitability Ratio
ROA1 9.23% 6.33% 5.22% 3.93% 4.40%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income 6,375  3,696  2,938  2,225  2,022 
Adjusted total assets 43,011  32,667  30,885  31,379  24,580 
Profitability Ratio
Adjusted ROA2 14.82% 11.31% 9.51% 7.09% 8.23%

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28).

2020 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 6,375 ÷ 69,052 = 9.23%

2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 6,375 ÷ 43,011 = 14.82%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Thermo Fisher Scientific Inc.’s adjusted ROA improved from 2018 to 2019 and from 2019 to 2020.