Financial statement analysis and common stock valuation

Analysis of Long-term (Investment) Activity Ratios
Quarterly Data

Measures how efficiently Thermo Fisher Scientific Inc. generates revenues from its investments in fixed or total assets.

• Long-term Activity Ratios (Summary)
• Net Fixed Asset Turnover
• Total Asset Turnover
• Equity Turnover

Analysis of Reportable Segments

Thermo Fisher Scientific Inc. operates in 4 segments: Life Sciences Solutions; Analytical Instruments; Specialty Diagnostics; and Laboratory Products and Biopharma Services.

• Segment Profit Margin
• Segment Return on Assets (Segment ROA)
• Segment Asset Turnover
• Segment Capital Expenditures to Depreciation
• Revenues
• Segment income
• Segment assets
• Purchases of property, plant and equipment
• Depreciation of property, plant and equipment

Capital Asset Pricing Model (CAPM)

CAPM is a theory concentrated with deriving the expected rates of return on risky assets based on the assets’ systematic risk levels. Systematic risk is the variability of returns that is due to macroeconomic factors that affect all risky assets. It cannot be eliminated by diversification.

• Rates of Return
• Variance and Covariance
• Systematic Risk (β) Estimation
• Expected Rate of Return

Analysis of Solvency Ratios
Quarterly Data

Examines Thermo Fisher Scientific Inc. capital structure in terms of the mix of its financing sources and the ability of the firm to satisfy its longer-term debt and investment obligations.

• Solvency Ratios (Summary)
• Debt to Equity
• Debt to Capital
• Debt to Assets
• Financial Leverage
• Interest Coverage

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin

An approach to decomposing Thermo Fisher Scientific Inc. return on equity, return on assets, and net profit margin ratio as the product of other financial ratios.

• Two-Component Disaggregation of ROE
• Three-Component Disaggregation of ROE
• Five-Component Disaggregation of ROE
• Two-Component Disaggregation of ROA
• Four-Component Disaggregation of ROA
• Disaggregation of Net Profit Margin

Analysis of Liquidity Ratios

Measures the adequacy of Thermo Fisher Scientific Inc. cash resources to meet its near-term cash obligations.

• Liquidity Ratios (Summary)
• Current Ratio
• Quick Ratio
• Cash Ratio

Price to FCFE (P/FCFE)

Free cash flow to equity is the cash flow available to Thermo Fisher Scientific Inc. equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.

• Free Cash Flow to Equity (FCFE)
• P to FCFE Ratio, Current
• P to FCFE Ratio, Historical

Enterprise Value to EBITDA (EV/EBITDA)

To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital.

• Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
• EV to EBITDA Ratio, Current
• EV to EBITDA Ratio, Historical

Common-Size Income Statement

Income statement components (revenues and expenses) shown as percentage of total sales.

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
Quarterly Data

Liabilities and stockholders’ equity components shown as percentage of total liabilities and stockholders’ equity.

Analysis of Short-term (Operating) Activity Ratios
Quarterly Data

Evaluates revenues and output generated by the Thermo Fisher Scientific Inc. assets. Operating performance ratios describe the relationship between the Thermo Fisher Scientific Inc. level of operations and the assets needed to sustain operating activities.

• Short-term Activity Ratios (Summary)
• Inventory Turnover
• Receivables Turnover
• Payables Turnover
• Working Capital Turnover
• Average Inventory Processing Period
• Average Receivable Collection Period
• Operating Cycle
• Average Payables Payment Period
• Cash Conversion Cycle

Dividend Discount Model (DDM)

The dividend discount model (DDM) is a technique for estimating the value of a share of Thermo Fisher Scientific Inc. common stock issue as the present value of all future dividends.

• Intrinsic Stock Value (Valuation Summary)
• Required Rate of Return (r)
• Dividend Growth Rate (g)