Thermo Fisher Scientific Inc. (NYSE:TMO)

Debt to Equity Ratio

The debt to equity ratio showed a general upward trend from early 2021 through the end of 2021, rising from 0.53 to 0.85. This increase suggests a growing reliance on debt financing relative to equity during this period. Throughout 2022, the ratio fluctuated moderately between 0.67 and 0.83, indicating some variability but maintaining a relatively elevated debt level compared to equity. In 2023 and into 2025, the ratio exhibited a gradual decline to around 0.7, suggesting a modest reduction in leverage or possibly an increase in equity financing or retained earnings over time.

Debt to Capital Ratio

This ratio mirrored the general trends observed in debt to equity, increasing noticeably in late 2021 to a high of 0.46 before declining somewhat over the subsequent quarters. From 2022 to 2025, the ratio stabilized within a narrower range, fluctuating between 0.39 and 0.45. This steady state suggests a consistent capital structure with a balanced use of debt and equity financing, reflecting relatively prudent financial management.

Debt to Assets Ratio

The debt to assets ratio demonstrated a trend similar to other leverage metrics, rising from approximately 0.28 in early 2021 to a peak of 0.37 at the end of 2021 and again in early 2023. Thereafter, it slightly declined and remained within the 0.32 to 0.37 range through mid-2025. This pattern indicates stable asset financing with a moderate proportion funded through debt, highlighting steady asset base leverage without significant volatility.

Financial Leverage Ratio

Financial leverage increased notably in 2021, reaching a peak near 2.33, reflecting higher use of debt relative to equity. Afterward, it showed a gradual downward movement through to 2025, stabilizing around the 2.0 mark. The sustained level above 2 implies that the company consistently maintained significant leverage but with a slight reduction in reliance on debt or increased equity funding over time.

Interest Coverage Ratio

The interest coverage ratio exhibited a downward trend from a strong position above 17 in early 2021 to a low near 5.5 by the end of 2023. This decline suggests increasing challenges in covering interest expenses from operating earnings, possibly due to higher interest costs or moderated earnings growth. Following this period, there was a modest recovery with the ratio improving to about 6.2 by mid-2025, indicating some improvement in the company's ability to meet interest obligations but still at a lower coverage level compared to the early period.

The financial data reveals several notable trends in the company's capital structure and leverage over the observed periods.

Total Debt

Total debt exhibited a significant increase from early 2021 into late 2021, rising sharply from approximately $18.6 billion to nearly $34.9 billion. Following this spike, total debt demonstrated a fluctuating but generally downward trend through 2022 and into 2024, with values oscillating mostly between $29 billion and $35 billion. The debt level decreased more noticeably towards the end of 2024, reaching around $31.3 billion, before rising again to about $35.7 billion by the third quarter of 2025.

Total Shareholders’ Equity

Shareholders’ equity displayed a consistent upward trend over the entire period. From roughly $35.1 billion in early 2021, equity steadily increased to about $50.2 billion by late 2025. There were minor fluctuations in certain quarters, yet the overall trajectory indicates strengthening equity with periodic growth spurts, particularly noticeable in mid to late 2023 and through 2024.

Debt to Equity Ratio

The debt to equity ratio moved in tandem with the observed changes in debt and equity, peaking sharply in late 2021 at approximately 0.85 during the period of elevated debt levels. Subsequently, this ratio declined into 2022 and 2023, ranging mostly between 0.67 and 0.83, indicating moderate leverage. Throughout 2024 and into 2025, the ratio stabilized around 0.7 and saw some improvement, descending to as low as 0.63 before slightly increasing again to 0.7. This reflects improved balance sheet leverage conditions and a relatively stable capital structure in recent periods.

In summary, the company experienced a substantial debt increase in late 2021, which led to a peak leverage ratio. Since then, it has managed to reduce its debt levels somewhat while continuously growing its equity base, resulting in a more balanced leverage profile. The relatively stable debt-to-equity ratio around 0.7 in the latest quarters suggests a maintained equilibrium between debt financing and equity, highlighting a conservative yet growth-oriented financial posture.

The financial data indicates that the total debt experienced an overall upward trajectory from April 2021 through March 2025, albeit with fluctuations. Initially, the total debt was approximately $18.6 billion and saw a significant increase toward the end of 2021, peaking around $34.9 billion by December 2021. Afterward, it slightly declined and fluctuated near the low to mid $30 billion range, with a notable decrease to approximately $31.3 billion in December 2024, before rising again to about $35.7 billion by the end of the observed period in September 2025.

Total capital followed a generally increasing trend throughout the period. Starting at about $53.7 billion in April 2021, the capital grew steadily with some periodic accelerations, such as a sharp increase in the latter part of 2021 and another rise in late 2023. The overall movement reached close to $86.7 billion by September 2025, reflecting continued capital expansion despite some minor fluctuations.

The debt-to-capital ratio exhibited variability within a range of approximately 0.34 to 0.46. Initially, it stayed close to 0.35 in the early part of 2021 but rose sharply by the end of 2021 to 0.46, coinciding with the surge in total debt. Following this peak, the ratio gradually declined and stabilized around the 0.40 to 0.45 range, with a subtle downward trend observable toward the end of the series where it settled near 0.41 by September 2025.

Overall, the data portrays a company maintaining a substantial level of leverage, with total debt representing roughly 40% to 45% of total capital during most of the period. The fluctuations in the debt-to-capital ratio correspond closely with changes in total debt, while total capital shows a steady increase. This suggests an ongoing strategy involving sustained debt levels coupled with capital growth, supporting possible investment or operational initiatives. The moderation and relative stabilization of the leverage ratio toward the latter years indicate an inclination toward managing financial risk and maintaining balance sheet stability.

Total Debt

Experienced significant growth peaking at nearly $35 billion by the end of 2021, followed by fluctuations mainly between low $30 billion and mid $30 billion values through 2025.

Total Capital

Displayed consistent growth from about $53.7 billion in early 2021 to roughly $86.7 billion by late 2025, indicating expansion in financing resources.

Debt to Capital Ratio

Varied between 0.34 and 0.46, jumping sharply at the end of 2021, then settling in a narrower range of 0.40 to 0.45, reflecting controlled leverage relative to capital over time.

Total Debt

The total debt experienced a significant increase beginning in the fourth quarter of 2021, rising sharply from approximately $21.7 billion to about $34.9 billion by the end of that year. Subsequently, there was a period of fluctuation where debt slightly decreased through mid-2022, hitting a low near $29.2 billion, before rising again toward the end of 2022. In 2023 and into 2025, total debt levels remained relatively stable, oscillating mostly in the range of $34 billion to $35.6 billion, with a notable dip in early 2025 followed by a rebound by the third quarter of 2025.

Total Assets

Total assets showed a steady upward trend over the entire period. Starting from around $65.9 billion in early 2021, assets increased moderately through 2021, followed by a more pronounced rise in the fourth quarter to nearly $95.1 billion. Although there was some variability during 2022, overall asset values continued to grow, reaching over $100 billion by late 2024. The upward trend persisted through 2025, ending just above $103 billion, indicating consistent asset base expansion throughout the analyzed timeframe.

Debt to Assets Ratio

The debt to assets ratio initially remained stable around 0.28 through the first three quarters of 2021, before climbing sharply to 0.37 at the end of 2021, aligning with the steep increase in total debt. Throughout 2022 and 2023, this ratio exhibited fluctuations between 0.32 and 0.37, reflecting the mixed trends in debt and assets during these years. From early 2024 through 2025, the ratio stabilized around 0.35, with minor variations but no significant trend upwards or downwards, suggesting that the company's leverage relative to its asset base maintained a consistent level in the more recent periods.

Summary Insights

Overall, the financial data reveals that the company has increased both its total debt and asset base over the analyzed period, with a notable debt expansion around late 2021. Despite this, the company managed to grow its assets at a rate that prevented the debt to assets ratio from escalating beyond moderate levels, maintaining a leverage ratio in a relatively stable range post-2022. This indicates a balance between financing through debt and expanding asset capacity, suggesting a strategic approach to capital management consistent with steady business growth.

Total assets

The total assets exhibit a generally upward trajectory over the reported periods. Starting from approximately $65.9 billion, the assets show a notable increase reaching a peak near $95.1 billion at the end of 2021. Following this peak, the asset levels display minor fluctuations, with some periods of slight declines and recoveries. Throughout 2023 and into early 2025, the total assets maintain an overall increasing trend, ending at about $103 billion. This pattern indicates steady growth in the company's asset base over time, though with intermittent periods of adjustment.

Total Thermo Fisher Scientific Inc. shareholders’ equity

Shareholders’ equity has also shown consistent growth, rising from approximately $35.1 billion in early 2021 to just above $51 billion by the first quarter of 2025. There are periods, particularly in 2023, where equity experiences some fluctuation, including slight decreases and recoveries. Despite these variations, the overall direction is upward, reflecting ongoing accumulation of equity capital, retained earnings, or other components that contribute positively to shareholders' value.

Financial leverage

The financial leverage ratio starts around 1.88 in early 2021 and rises to a peak of 2.33 by the end of 2021, suggesting increased use of debt relative to equity during that period. After this peak, leverage shows a declining trend with some fluctuations, moving towards a lower range near 2.0 by mid-2025. This indicates a cautious reduction in leverage or an improvement in equity relative to liabilities, potentially reflecting strategic efforts to optimize the capital structure and manage financial risk.

Overall trends and insights

Across the observed timeframe, the company demonstrates growth in assets and equity, signifying expansion and strengthening of its financial position. The peak in financial leverage observed at the end of 2021, followed by a gradual decline, suggests a period of increased borrowing or capital expenditure that was subsequently managed to improve balance sheet stability. The movements in equity relative to assets underscore a sustainable growth pattern, with equity increasing steadily, thereby supporting asset growth and potentially reducing reliance on external debt.

Earnings Before Interest and Tax (EBIT)

Over the observed periods, EBIT demonstrates notable fluctuations with an overall declining trend from early 2021 into 2023, followed by a modest recovery towards late 2024 and early 2025. Initially, EBIT peaked at 2,878 million USD in April 2021, then declined sharply to a low around 1,638 million USD by April 2023. Subsequently, EBIT exhibits oscillations but generally recovers, reaching approximately 2,175 million USD by September 2025. This pattern indicates periods of operational challenges or reduced profitability, with some improvement in recent quarters.

Interest Expense

Interest expense shows a steady and consistent increase throughout the entire timeframe. Starting from 125 million USD in April 2021, interest expense rises continuously, peaking significantly at 404 million USD in September 2025. This upward trend suggests increased debt levels or higher borrowing costs, which may exert pressure on net earnings and cash flow.

Interest Coverage Ratio

The interest coverage ratio, which measures the company’s ability to meet interest obligations from operating earnings, declines substantially from a high of 19.94 in October 2021 to lows near 5.53 by late 2023 and early 2024. Although there is a slight improvement afterward, the ratio remains below 7, indicating reduced buffer and higher risk related to interest payment capacity. The declining coverage ratio corresponds with rising interest expenses and fluctuating EBIT, signaling potential financial strain and lower operational efficiency in covering debt servicing costs.

Summary and Insights

The juxtaposition of declining EBIT and steadily increasing interest expenses indicates a challenging operational and financial environment for the company over the observed periods. EBIT volatility and its notable decline in early 2023 suggest temporary or structural factors impacting earnings. Meanwhile, rising interest costs coupled with diminished interest coverage suggest greater reliance on debt financing or increased borrowing costs, potentially weakening financial flexibility. Although some recent quarters show modest improvement in EBIT and interest coverage, the overall trend points to the need for careful attention to debt management and operational efficiency to maintain sustainable financial health.