Thermo Fisher Scientific Inc. (NYSE:TMO)

The analysis of the quarterly financial data shows distinct patterns and trends across key performance indicators, including Return on Assets (ROA), Financial Leverage, and Return on Equity (ROE).

Return on Assets (ROA)

Starting from the earliest available data point in December 2020 at 9.23%, ROA increased to a peak of 12.7% by October 2021. Following this peak, there was a consistent downward trend reaching 6.07% in December 2023. From that point onward, the ROA showed relative stability with minor fluctuations, ending near 6.5% in June 2025. This pattern suggests that the company experienced a temporary enhancement in asset profitability in 2021 but faced declining efficiency thereafter, stabilizing at a lower level in the most recent periods.

Financial Leverage

The financial leverage ratio was relatively stable throughout the period, fluctuating modestly around an average value near 2.0. Starting at 2.05 in March 2020, the ratio decreased gradually to a trough of 1.84 in July 2021, then increased to a peak of 2.33 in December 2021. Subsequently, leverage declined again, reaching 1.96 in March 2025 before a slight increase to 2.0 in June 2025. This variability indicates some adjustments in the company's capital structure, but the overall leverage remained moderate without extreme deviations.

Return on Equity (ROE)

ROE data begins in December 2020 at 18.47%, rising to a peak of 23.32% in October 2021. After this peak, ROE demonstrated a steady decline, falling to 12.83% by December 2023. Following this decline, ROE stabilized within a narrow range around 13%, ending at 13.03% in June 2025. This trend mirrors the ROA behavior, reflecting diminished returns on shareholder equity after 2021 but with less pronounced deterioration in subsequent periods.

Net Profit Margin

The net profit margin data begins from the period ending April 3, 2021. It shows a peak at 22.47% in October 2021, followed by a steady decline through 2022 and early 2023, reaching a low near 13.14% in July 2023. After this phase, the margin stabilizes and exhibits a moderate upward trend, recovering to about 15.23% by June 28, 2025. This pattern suggests that profitability pressures were experienced primarily in 2022 and early 2023, with some recovery in the subsequent periods.

Asset Turnover

Asset turnover starts being reported from December 31, 2020. Initially, it shows an improvement from 0.47 to a high of 0.57 by October 2021. Thereafter, a general declining trend is notable, with values mostly fluctuating in the range of 0.42 to 0.49 through 2022 to mid-2025. This erosion in asset turnover indicates a possible reduction in efficiency regarding asset utilization over time, stabilizing at a lower level than the peak observed in late 2021.

Financial Leverage

Financial leverage exhibits a gradual decline from 2.05 in March 28, 2020 to a local minimum of 1.84 in July 3, 2021, followed by a temporary peak at 2.33 in December 31, 2021. Subsequently, leverage generally trends downward again, reaching approximately 2.00 in the middle of 2025. This indicates a cautious but somewhat fluctuating approach to balance sheet leverage over the observed period, with no extreme variations over the years.

Return on Equity (ROE)

The ROE follows a pattern largely consistent with the net profit margin. Starting from 18.47% at April 3, 2021, it rises to a maximum of 23.32% in October 2021, then declines steadily to around 12.83% by December 31, 2023. The metric stabilizes in the 12.5% to 13.2% range throughout 2024 and mid-2025, showing a modest recovery in some quarters. ROE’s trend reflects the combined influences of declining profitability and asset turnover, as well as fluctuating leverage.

Summary Insights

The data reveal a period of strong profitability and efficiency in 2021, peaking in the latter half of that year. Subsequently, a downturn in profitability and asset utilization efficiency is observed through 2022 and early 2023, with partial recovery in profitability metrics by 2024 and mid-2025. Financial leverage shows a slight downward trend, suggesting a conservative capital structure approach. Overall, the company appears to have faced challenges affecting profit margins and asset usage after 2021 but managed to stabilize and improve key return metrics moderately by mid-2025.

Tax Burden

The tax burden ratio, available from December 31, 2020, shows a generally upward trend over the observed periods. Starting around 0.88, it experiences a slight increase, peaking near 0.95 around September 30, 2023, before slightly declining to approximately 0.94 by June 28, 2025. This suggests a gradual increase in the proportion of pre-tax income retained after taxes over time, indicating potential improvements in tax efficiency or structural tax benefits.

Interest Burden

The interest burden ratio initially remains high, near 0.95 through the end of 2021, before exhibiting a steady decline from early 2022 to 2024, reaching approximately 0.82 by late 2023. It stabilizes around 0.83 to 0.84 towards mid-2025. This declining interest burden indicates an increasing impact of interest expenses relative to earnings before interest and taxes, potentially reflecting a higher cost of debt or increased debt levels during this period.

EBIT Margin

EBIT margin shows a declining trend from March 28, 2020, through 2022, dropping from approximately 24% to below 17%. From 2023 onward, the margin stabilizes and shows slight recovery, rising back above 19% by early 2025. This trajectory highlights a period of margin compression possibly due to rising costs or competitive pressures, followed by stabilization and modest improvement in operating profitability.

Asset Turnover

The asset turnover ratio peaks at 0.57 in the third quarter of 2020, then follows a general downward trajectory or stabilizes around 0.43 to 0.46 in subsequent years. The slowing in asset turnover suggests reduced efficiency in generating revenues from asset base, which could be due to slower sales growth relative to total assets or increased asset investments not yet translating into revenue.

Financial Leverage

Financial leverage decreases from around 2.05 in early 2020 to a low near 1.84 in mid-2021, then fluctuates between approximately 2.0 and 2.33 through 2023 before stabilizing close to 2.0 by mid-2025. This pattern implies modest changes in the company’s use of debt relative to equity, with periods of both deleveraging and increased leverage, but generally maintaining a moderate leverage ratio.

Return on Equity (ROE)

The ROE follows a downward trend from a high exceeding 23% in late 2021 to a low near 13% in late 2023. Following this decline, the ROE exhibits signs of stabilization and a mild recovery, hovering around 13% to 13.3% into mid-2025. This decrease over time reflects the combined effects of margin compression, reduced asset turnover, and variations in leverage, signaling challenges in sustaining high shareholder returns during the period.

Net Profit Margin

The net profit margin displayed a rising trend in the initial periods, increasing from 19.79% in March 2020 to a peak of 22.47% in October 2020. This was followed by a gradual decline over subsequent quarters, reaching a trough of 13.14% by July 2023. After this low point, the margin stabilized and exhibited a moderate recovery, rising steadily to about 15.23% by June 2025. Overall, the net profit margin experienced an initial strong performance, followed by a prolonged decline and a later moderate improvement.

Asset Turnover

Asset turnover ratios fluctuated throughout the period examined. Early figures were relatively stable, starting at 0.47 and progressing upward to 0.57 by October 2020. Subsequently, the ratio declined to 0.41 by April 2022, indicating a reduction in efficiency in generating revenue from assets. Afterwards, asset turnover remained mostly steady in the 0.42 to 0.49 range, with minor variations, ending at 0.43 in June 2025. This suggests that asset utilization efficiency weakened initially but then maintained a consistent moderate level in later quarters.

Return on Assets (ROA)

ROA followed a pattern resembling that of net profit margin: after rising sharply from 9.23% in March 2020 to a peak of 12.7% in October 2020, it declined significantly to 6.08% by July 2023. From this nadir, ROA showed a slow and steady upward trend, reaching approximately 6.5% by June 2025. This trend indicates that the company's effectiveness in generating profit from assets declined after late 2020 but has been gradually improving in the more recent periods.

Tax Burden

The tax burden ratio demonstrates a gradual upward trend over the periods analyzed, increasing from 0.88 in December 2020 to approximately 0.94 by June 2025. This indicates a slight rise in the proportion of pre-tax income retained after tax expenses, suggesting improved tax efficiency or lower relative tax expenses in recent quarters.

Interest Burden

The interest burden ratio has shown a modest decline from 0.95 in December 2020 to a low near 0.82 during 2023 and early 2024, before slightly recovering to about 0.84 by mid-2025. This pattern suggests an increasing impact of interest expenses on earnings before interest and taxes (EBIT) over time, with minor improvement in the most recent quarters, implying fluctuations in financing costs or debt levels.

EBIT Margin

EBIT margin exhibited an overall decreasing trend from 27.4% in October 2020 to lows around 16.29% in July 2023. Beginning in late 2023, it displayed a modest recovery, stabilizing around 19.4% by mid-2025. This indicates initial pressure on operating profitability, followed by a period of gradual margin improvement, possibly due to cost efficiencies or revenue growth initiatives.

Asset Turnover

Asset turnover has fluctuated over the period, declining sharply from 0.57 in September 2020 to roughly 0.41 by April 2022, then mostly stabilizing around 0.43–0.46 in subsequent quarters through mid-2025. This suggests reduced efficiency in generating sales from assets initially, with a plateau in later periods indicating steady operational efficiency in asset utilization.

Return on Assets (ROA)

The ROA experienced a notable decline from a high of 12.7% in September 2020 to about 6.08% in July 2023. After this trough, it remained relatively stable, with slight increases reaching approximately 6.5% by 2025. This reflects a significant reduction in overall profitability on asset base initially, followed by a stabilization and mild recovery in generating returns from assets.

Tax Burden

The tax burden ratio has displayed a general upward trend over the observed periods, beginning at 0.88 and increasing gradually to 0.95 before slightly fluctuating towards the end. This indicates a growing proportion of income retained after taxes, suggesting a potentially more efficient tax management or changes in tax policies affecting the company. The ratio stabilizes near 0.91 to 0.94 in the most recent quarters.

Interest Burden

The interest burden ratio shows a slight decline from 0.93 to a minimum of 0.82 over the middle periods, indicating an increasing impact of interest expenses relative to earnings before interest and taxes. However, in the latest quarters, a modest recovery is visible as the ratio climbs back to around 0.84. This pattern may reflect fluctuations in interest expenses or debt levels over time.

EBIT Margin

The EBIT margin has exhibited a significant downward trend. It peaked at around 27.4% in late 2020, then gradually decreased to approximately 16.3% by mid-2023. Following this decline, a mild recovery is evident in subsequent quarters, reaching about 19.4% by the end of the latest period. This suggests initial pressures on operating profitability, possibly from increased costs or reduced pricing power, with some improvement more recently.

Net Profit Margin

Net profit margin follows a pattern similar to EBIT margin but with somewhat less volatility. Initially rising to a peak of 22.47%, it declined steadily to a low near 13.14% by mid-2023. Afterward, a gradual increase is noted, improving to roughly 15.23% in the last reported quarter. This implies that despite challenges impacting profitability, the company is managing to enhance its bottom-line margin moderately in recent times.