Thermo Fisher Scientific Inc. (NYSE:TMO)

Debt to Equity Ratio

The debt to equity ratio initially declined from 0.7 in March 2020 to 0.51 by July 2021, showing a trend of decreasing leverage over this period. However, beginning in the fourth quarter of 2021, the ratio increased sharply to 0.85 and remained elevated but somewhat volatile, fluctuating between 0.63 and 0.83 through to mid-2025. This indicates a reversal in the earlier deleveraging trend and suggests a renewed increase or maintenance of financial leverage in recent periods.

Debt to Capital Ratio

This ratio exhibited a gradual decrease from 0.41 in March 2020 to a low of 0.34 in July 2021. Following this, it rose again, peaking at 0.46 in December 2021, before stabilizing in the 0.39 to 0.45 range through mid-2025. The pattern reflects an initial deleveraging phase followed by a moderate increase and then a consolidation stage, indicating more balanced capital structure management in recent periods.

Debt to Assets Ratio

The debt to assets ratio decreased steadily from 0.34 in early 2020 to 0.28 by mid-2021, mirroring the trend in other leverage ratios. After this period, an upturn occurred, with the ratio increasing to 0.37 by December 2021 and then fluctuating around 0.35 to 0.37 subsequently. The trend points to initial reductions in debt relative to assets, followed by a slight reversal and stabilization, suggesting cautious leverage use relative to assets lately.

Financial Leverage Ratio

Financial leverage decreased from 2.05 at the start of 2020 to a low of 1.84 by July 2021, indicating reduced reliance on debt to finance assets. This was followed by a spike to 2.33 by the end of 2021. Thereafter, the ratio trended downward modestly to around 2.0 by mid-2025, showing some moderation of leverage but at levels higher than the mid-2021 low. Overall, leverage levels have been variable but tend to stabilize in the medium term after initial fluctuations.

Interest Coverage Ratio

Data for interest coverage starts from December 2020, showing a high value of 14.07 which improved to a peak of 19.94 by December 2021. From that peak, the ratio declined steadily to a low of 5.54 in December 2023, before stabilizing around 6.0 through mid-2025. This trend indicates strong ability to cover interest expenses initially, followed by a significant deterioration and subsequent stabilization at a lower level, which may reflect increased interest expenses or reduced earnings capacity over this period.

The financial data presents information on total debt, shareholders' equity, and the debt to equity ratio for Thermo Fisher Scientific Inc. over a series of quarterly periods from March 2020 through June 2025.

Total Debt

The total debt exhibits fluctuations over the reviewed quarters. Initially, there is a rise from approximately 19.97 billion USD in March 2020 to a peak near 34.87 billion USD by December 2021. This corresponds to a significant increase within roughly two years. Following this peak, the debt level undergoes a general decline trend with some intermittent increases, falling to around 31.28 billion USD by March 2025 before slightly increasing again to about 35.23 billion USD in June 2025. The data indicates periods of debt accumulation as well as debt reduction, reflecting active debt management possibly in response to operational needs or capital structure adjustments.

Total Shareholders’ Equity

Shareholders’ equity consistently grows across the entire timeframe. It starts at approximately 28.56 billion USD in March 2020 and steadily increases to a high of about 50.51 billion USD by June 2025. This persistent rise suggests ongoing value creation and retained earnings, or equity injections, contributing positively to the company’s net worth. The growth trend appears stable and robust, indicating strengthening of the company’s equity base over time.

Debt to Equity Ratio

The debt to equity ratio parallels the trends observed in debt and equity values. Initially, the ratio hovers around 0.7 in early 2020, then falls to lower levels around 0.51 by mid-2021, reflecting relatively lower leverage partly due to increasing equity and moderate debt levels at that time. Subsequently, the ratio surges to a peak of approximately 0.85 in December 2021, in line with the peak in total debt. After this high point, the leverage ratio generally declines with fluctuations, reaching a low of approximately 0.63 in March 2025 before rising back toward 0.7 by mid-2025. These variations suggest periods of higher and lower financial leverage, aligning with the company’s changing debt and equity structure throughout the years.

In summary, the data reveals a pattern of strategic financial management characterized by growth in equity and variable debt levels, leading to dynamic changes in leverage. The overall increase in shareholders' equity signals strengthening financial position, while the debt movements and resulting leverage fluctuations indicate responsive adaptations possibly linked to financing needs or market conditions over the analyzed period.

Total Debt

The total debt experienced an initial increase from approximately $19.97 billion in March 2020 to about $21.74 billion by December 2020. This was followed by a notable decline reaching around $18.65 billion in April 2021. Subsequently, total debt rose sharply to a peak of roughly $34.87 billion in December 2021, indicating a significant increase in leverage within that year. The following quarters showed some fluctuations with debt levels generally stabilizing between $29.16 billion and $35.26 billion through 2022 and early 2023. In the remaining periods, total debt remained relatively steady, fluctuating around the low to mid $30 billion range, with a slight decrease towards June 2025 before rising again.

Total Capital

Total capital trended upward over the observed periods, starting at approximately $48.53 billion in March 2020 and growing steadily to about $75.66 billion by December 2021. Despite slight decreases in some quarters within 2022, the overall capital base continued to increase, reaching approximately $80.66 billion by December 2023. The upward trend remained consistent, with total capital nearing $85.74 billion by June 2025, reflecting overall growth in the company's capital structure over the timeframe.

Debt to Capital Ratio

The debt-to-capital ratio varied throughout the timeline, initially around 0.41 in March 2020, then rising to a peak of 0.46 in December 2021. This peak corresponds with the significant increase in total debt relative to capital during that period. After this spike, the ratio decreased gradually, maintaining a more stable range between 0.39 and 0.45 in subsequent quarters. From early 2023 onward, the ratio hovered close to 0.41, indicating a moderate and consistent leverage level through mid-2025.

Overall Analysis

Over the examined quarters, total capital demonstrated a steady growth trajectory, reflecting expansion or reinvestment efforts, while total debt levels showed more volatility with a marked increase leading up to the end of 2021. The peak in debt and the corresponding spike in the debt-to-capital ratio at that time highlight a period of increased financial leverage. However, in ensuing periods, the company managed to stabilize its leverage, maintaining a moderate debt-to-capital ratio around 0.41. This suggests a balanced approach in managing debt relative to equity and other capital sources, combined with overall capital growth.

Total Debt

The total debt exhibited fluctuations over the observed periods. Initially, it increased slightly from approximately $19.97 billion at the end of March 2020 to $21.31 billion by June 2020, then remained relatively stable through September and December 2020. A noteworthy reduction occurred in early 2021, with total debt declining to a low near $18.65 billion by April 2021. However, from mid-2021 onwards, total debt rose sharply, reaching a peak of about $34.87 billion by December 2021. Following this spike, the debt level decreased somewhat but again showed variability, with values oscillating around the $34 billion mark through mid-2023. Subsequently, debt stabilized near $35 billion from late 2023 through mid-2025, with a minor decline toward around $31.28 billion in March 2025 before a slight rebound at the following dates.

Total Assets

Total assets demonstrated a generally upward trajectory throughout the timeline. Starting at approximately $58.69 billion in March 2020, assets increased steadily to about $69.05 billion by the end of 2020. A minor setback or plateau followed in early 2021 with fluctuations between roughly $65.93 billion and $68 billion, but this trend reversed with a pronounced jump to $95.12 billion by December 2021. After this significant rise, total assets remained elevated, consistently ranging between $90.5 billion and just over $101 billion from 2022 into mid-2025. Notably, assets showed resilience and an overall growth tendency despite the variations seen in debt levels.

Debt to Assets Ratio

The debt to assets ratio declined from 0.34 in March 2020 to a low of 0.28 in April and July 2021, indicating an improvement in leverage during this period. Afterward, the ratio increased sharply, peaking at approximately 0.37 by December 2021, coinciding with the surge in total debt. Post-peak, the leverage ratio oscillated between 0.32 and 0.37 across subsequent quarters, evidencing moderate financial leverage without a clear downward or upward trend. The ratio remained relatively stable near 0.35 in 2024 and the first half of 2025, underscoring a consistent balance between debt and asset levels.

Overall Insights

The data reveals a period of cautious deleveraging in the first half of 2021, followed by a marked increase in indebtedness by the end of that year. This surge in debt aligns with a substantial increase in total assets, indicating that the company likely engaged in asset acquisitions or capital investments funded through debt. Despite fluctuations, the debt to assets ratio suggests the company maintained leverage within a moderate range, avoiding extreme financial risk. The relative stability in leverage over recent quarters implies a controlled approach to managing debt in relation to asset growth. The gradual increase in total assets over the entire time frame highlights ongoing expansion or value enhancement within the company's asset base.

The analysis of financial data over the observed periods reveals several notable trends concerning total assets, shareholders' equity, and financial leverage ratios.

Total Assets

Total assets demonstrate an overall increasing trend from March 2020 through June 2024, indicating growth in the company's asset base. Starting at approximately $58.7 billion in March 2020, total assets peaked at around $95.1 billion by December 2021. Following this peak, a slight reduction is seen through mid-2022, with values fluctuating in the range of $90.5 to $97.2 billion. Subsequently, from early 2023 onward, assets continue generally upward, albeit with minor fluctuations, reaching over $101 billion by June 2025. This pattern suggests ongoing asset expansion with some short-term volatility.

Total Shareholders’ Equity

Shareholders' equity reflects steady growth throughout the periods, rising from $28.6 billion in March 2020 to around $50.5 billion by June 2025. The increase is relatively consistent with minor troughs, such as in early 2023 where equity declined slightly before resuming its upward trajectory. The stability and gradual appreciation in equity indicate strengthening ownership value and retained earnings, which may support the company’s capital structure and financial stability.

Financial Leverage Ratio

The financial leverage ratio shows modest fluctuations but generally trends downward from about 2.05 in early 2020 to a low near 1.88 in April 2021, reflecting a modest reduction in leverage during this period. However, from mid-2021, the ratio increases notably, peaking at approximately 2.33 by December 2021. Following this spike, leverage ratios decline gradually, averaging near 2.0 in 2024 and 2025, which suggests a movement toward moderate leverage levels. These fluctuations may correspond to varying funding strategies and shifts in the balance between debt and equity financing.

In summary, the company exhibits consistent asset and equity growth over the period analyzed, supported by relatively stable financial leverage levels. Short-term variations in leverage and assets highlight periods of restructuring or financial strategy adjustments, which appear to be followed by recovery and continued growth. Overall, the data indicate sound financial health with ongoing expansion and balanced leverage management.

Earnings before interest and tax (EBIT)

There is a noticeable fluctuation in EBIT over the observed periods. EBIT started at 954 million USD in March 2020 and experienced a significant increase, peaking at 3038 million USD in December 2020. After this peak, EBIT declined and exhibited volatility, dropping to as low as 1638 million USD in April 2023, followed by intermittent rises and falls through 2024 and into the first half of 2025. Despite these variations, EBIT generally remained above the levels seen in early 2020 after the initial surge.

Interest expense

Interest expense demonstrates a rising trend over the timeframe. Starting from 126 million USD in March 2020, the cost steadily increased with some fluctuations, reaching values over 300 million USD by late 2022 and maintaining a generally elevated level thereafter. Peaks in interest expense occur around December 2022 and early 2024, suggesting increased borrowing costs or higher debt levels during these times.

Interest coverage ratio

The interest coverage ratio, a measure of the company’s ability to meet interest obligations from operational earnings, showed a strong decline after a peak period. The highest ratio was observed at around 19.94 in December 2020, indicating very strong coverage. However, from 2021 onward, the ratio consistently declined, reaching lows in the range of 5.3 to 6.3 in 2023 and 2024. This decline reflects increased interest expenses relative to EBIT, implying a weakening ability to cover interest expenses comfortably despite still positive coverage.

Overall trends and insights

The data reveals cyclical behavior with an initial growth and peak in operating profitability followed by a tapering off. Concurrently, interest expenses have grown substantially, likely pressuring net profitability and cash flow. The decreasing interest coverage ratio suggests increased risk related to debt servicing, even though EBIT remains positive across all quarters. The fluctuations in EBIT coupled with rising interest expense indicate periods of operational challenges and increased financial leverage or cost of debt.