Thermo Fisher Scientific Inc. (NYSE:TMO)

The financial data reveals several notable trends in the intangible assets and related items over the five-year period.

Customer relationships

Customer relationships demonstrate a significant increase from 16,593 million USD in 2020 to 22,802 million USD in 2021, followed by a slight decline in 2022 to 21,792 million USD. The value then rose again to 22,762 million USD in 2023 before marginally decreasing to 22,644 million USD in 2024. Overall, this category exhibits strong growth with some stabilization in recent years.

Product technology

This asset category shows modest fluctuations over the period. It increased from 5,523 million USD in 2020 to a peak of 6,041 million USD in 2021, then gradually declined to 5,557 million USD by 2024. The trend indicates a slight downward adjustment after reaching its high point in 2021.

Tradenames (specific to rows)

There are two entries for Tradenames. One set presents growth from 1,213 million USD in 2020 to 1,722 million USD in 2021, followed by a slight decrease and then a rebound to 1,706 million USD in 2024. The other set remains constant at 1,235 million USD throughout the entire period, likely reflecting different categorizations or classifications within the intangible assets.

Backlog

Backlog data starts from 2021 with 1,060 million USD and remains relatively stable, showing minor fluctuations yet maintaining around 1,080 million USD by 2024. This suggests a consistent volume of unfulfilled orders over recent years.

Acquisition-related intangible assets, definite lived, gross

A pronounced increase is noted from 23,329 million USD in 2020 to 31,625 million USD in 2021, indicating significant acquisition activity or revaluation during that year. Subsequent years show a slight decline, settling at 30,991 million USD by 2024, which points to stabilization after the initial surge.

Accumulated amortization

Accumulated amortization steadily increases in magnitude, with negative values deepening from -11,879 million USD in 2020 to -16,693 million USD in 2024. This consistent growth in amortization expense reflects ongoing systematic allocation of acquisition-related intangible asset costs over time.

Acquisition-related intangible assets, definite lived, net

The net value, which accounts for gross intangible assets less accumulated amortization, rose sharply from 11,450 million USD in 2020 to 18,878 million USD in 2021 before decreasing continuously to 14,298 million USD by 2024. This pattern suggests that while acquisitions increased intangible assets initially, amortization has since reduced their net recorded value.

Acquisition-related intangible assets, indefinite lived

This value remains steady at 1,235 million USD throughout the period, reflecting assets that are not subject to amortization and have a stable valuation.

Acquisition-related intangible assets (total)

The total acquisition-related intangible assets peak at 20,113 million USD in 2021 after a significant increase from 12,685 million USD in 2020. This total then declines gradually to 15,533 million USD in 2024, indicative of the effects of amortization and potential disposals or write-downs following the initial growth.

Goodwill

Goodwill increases substantially from 26,041 million USD in 2020 to 41,924 million USD in 2021, which indicates major business acquisitions or business combinations. After a slight dip to 41,196 million USD in 2022, goodwill rises again to reach 45,853 million USD by 2024, reflecting ongoing acquisition activity or valuation adjustments.

Acquisition-related intangible assets and goodwill (combined)

The combined figure of acquisition-related intangible assets and goodwill follows a similar pattern: increasing sharply from 38,726 million USD in 2020 to 62,037 million USD in 2021, then declining slightly each subsequent year to stabilize around 61,386 million USD in 2024. This overall trend highlights the heavy impact of acquisitions in 2021, with a subsequent moderation and stabilization of asset valuations.

In summary, the data indicates heavy acquisition activity leading to significant increases in intangible assets and goodwill in 2021, followed by a trend of steady amortization and slight reductions in net intangible asset values. Goodwill continues to grow moderately after 2021, suggesting continued but less aggressive acquisition activity. The stability of indefinite-lived intangible assets and backlog suggests consistent maintenance of certain asset bases and order inflows over the analyzed period.

Total Assets

The reported total assets exhibit a substantial increase from 69,052 million USD at the end of 2020 to a peak of 98,726 million USD by the end of 2023. However, a slight decline is observed in 2024, where total assets decrease to 97,321 million USD.

In contrast, the adjusted total assets, which exclude goodwill impacts, also demonstrate growth over the initial years, rising from 43,011 million USD in 2020 to a maximum of 55,958 million USD in 2022. Following this peak, adjusted total assets decline noticeably in 2023 and 2024, dropping to 54,706 million USD and then further to 51,468 million USD, respectively.

Shareholders’ Equity

Reported shareholders’ equity shows a consistent upward trajectory across the five-year period, increasing from 34,507 million USD in 2020 to 49,584 million USD in 2024. This steady growth suggests a strengthening equity base for the company on a reported basis.

The adjusted shareholders’ equity reflects a markedly different pattern. Beginning at 8,466 million USD in 2020, it experiences a sharp decline entering negative territory in 2021 at -1,131 million USD, indicating possible goodwill amortization or impairment adjustments impacting the adjusted equity.

Subsequent years see a partial recovery, with adjusted equity improving to 2,782 million USD in 2022 and stabilizing around 2,715 million USD in 2023, before increasing again to 3,731 million USD in 2024. Despite this recovery, the adjusted equity remains significantly lower than the reported measure, highlighting the impact of adjustments on perceived equity value.

Insights

The divergence between reported and adjusted figures, especially in shareholders' equity, signals considerable influence from goodwill or other intangible asset adjustments. While reported figures indicate robust growth in total assets and equity, the adjusted data suggest that the company’s tangible asset base and equity strength are considerably less pronounced and volatile.

The peak and subsequent decline in adjusted total assets contrasted with the generally rising trend in reported assets may imply asset revaluation or impairment during the later periods, which affects the adjusted figures more prominently.

Overall, the data suggest that while the company’s reported financial position has improved steadily, adjustments for goodwill significantly moderate this growth and expose higher volatility in adjusted equity and asset base.

The analysis of the financial ratios over the five-year period reveals distinct patterns in the company's operational efficiency, leverage, and profitability, both on a reported basis and when adjusted for goodwill.

Total Asset Turnover

The reported total asset turnover ratio saw minor fluctuations, starting at 0.47 in 2020, decreasing to 0.41 in 2021, then increasing again to 0.46 in 2022, before slightly declining to 0.43 in 2023 and rising marginally to 0.44 in 2024. This indicates moderate stability with slight variability in asset utilization efficiency. In contrast, the adjusted total asset turnover, which excludes goodwill effects, remained consistently higher across all years, starting at 0.75 in 2020 and progressively increasing to 0.83 in 2024, indicating improved asset efficiency when goodwill is excluded.

Financial Leverage

The reported financial leverage ratio showed a gradual decrease from 2.00 in 2020 to 1.96 in 2024, following a peak at 2.33 in 2021. This suggests a trend toward a more conservative capital structure over time. The adjusted financial leverage exhibited significant volatility, with a value of 5.08 in 2020, missing data in 2021, then spiking dramatically to over 20 in 2022 and 2023, before reducing to 13.79 in 2024. These large fluctuations imply substantial changes in the capital structure or asset base when goodwill is excluded, possibly due to impairments or reclassifications impacting the denominator or equity component.

Return on Equity (ROE)

The reported ROE decreased steadily from 18.47% in 2020 to 12.78% in 2024, indicating a decline in net income generated per unit of shareholder equity. On an adjusted basis, the ROE was markedly higher, beginning at 75.3% in 2020, missing data for 2021, then peaking at nearly 250% in 2022 before declining to approximately 170% in 2024. Despite volatility, adjusted ROE remains significantly elevated compared to the reported figures, highlighting the strong impact of goodwill adjustments on profitability metrics.

Return on Assets (ROA)

The reported ROA declined consistently from 9.23% in 2020 to 6.51% in 2024, reflecting a downward trend in net income generated relative to total assets. The adjusted ROA also showed a downward trend from 14.82% in 2020 to 10.96% in 2023 but then improved to 12.31% in 2024, demonstrating better asset profitability once goodwill is excluded. The adjusted figures generally surpass the reported values, suggesting that goodwill adjustments enhance the apparent operational efficiency.

Overall, the data indicates that reported metrics reflect a modest decline in efficiency and profitability with a cautious reduction in financial leverage. Adjusted data, accounting for goodwill, presents a more volatile but notably higher efficiency and profitability profile, suggesting that goodwill plays a significant role in distorting reported financial measures. This underscores the importance of considering goodwill adjustments for a more precise evaluation of the company’s performance and financial position.

The financial data reveals distinct trends in both reported and goodwill adjusted figures over the analyzed period.

Total Assets

Reported total assets increased significantly from 69,052 million US dollars in 2020 to a peak of 98,726 million US dollars in 2023, representing substantial growth. However, there was a slight decline to 97,321 million US dollars in 2024, indicating a minor contraction after years of expansion.

Adjusted total assets, which exclude goodwill, also show an upward trend initially, rising from 43,011 million US dollars in 2020 to 55,958 million US dollars in 2022. This was followed by a decrease to 54,706 million in 2023 and a more pronounced drop to 51,468 million in 2024. This decline contrasts with the overall growth seen in reported total assets, suggesting possible impairments or adjustments affecting intangible assets.

Total Asset Turnover

The reported total asset turnover ratio shows a declining trend from 0.47 in 2020 to 0.41 in 2021, indicating reduced efficiency in using reported total assets to generate revenue during that period. There was partial recovery with an increase to 0.46 in 2022, followed by another dip to 0.43 in 2023, and a modest improvement to 0.44 in 2024. Overall, the ratio remains below the 2020 level, signaling persistent challenges in asset utilization efficiency on a reported basis.

In contrast, the adjusted total asset turnover ratio remains higher throughout and exhibits a generally positive trend. It decreased slightly from 0.75 in 2020 to 0.74 in 2021, but subsequently rose consistently to 0.80 in 2022 and maintained strong performance at 0.78 in 2023, culminating in 0.83 in 2024. This upward trajectory implies improved operational efficiency when goodwill and other intangible assets are excluded, reflecting stronger core asset productivity over time.

Analysis of the annual financial data reveals significant variations in both reported and goodwill-adjusted metrics over the observed periods.

Total Assets

The reported total assets increased markedly from 69,052 million US dollars in 2020 to a peak of 98,726 million in 2023, followed by a slight decline to 97,321 million in 2024. In contrast, the adjusted total assets, which exclude goodwill or related adjustments, show a consistent increase from 43,011 million in 2020 to 55,958 million in 2022, then a decrease to 54,706 million in 2023 and a more pronounced decline to 51,468 million in 2024. This suggests that while the nominal asset base expanded according to reported figures, the underlying tangible or adjusted asset base faced downward pressure starting from 2023.

Shareholders’ Equity

The reported shareholders’ equity demonstrates a steady increase year-on-year from 34,507 million in 2020 to 49,584 million in 2024. Conversely, the adjusted shareholders’ equity exhibits more volatility: it starts at 8,466 million in 2020, turns negative to -1,131 million in 2021, then rebounds to positive values in subsequent years with 2,782 million in 2022, 2,715 million in 2023, and increasing to 3,731 million in 2024. This fluctuation indicates significant goodwill or intangible adjustments impact the equity base, raising concerns regarding the sustainability of the adjusted equity position in earlier years.

Financial Leverage

The reported financial leverage ratio, defined as total assets divided by shareholders’ equity, shows a declining trend from 2.00 in 2020 to 1.96 in 2024, representing gradual deleveraging or an improved equity base relative to assets. Meanwhile, the adjusted financial leverage ratio exhibits much higher levels and volatility: starting at 5.08 in 2020, the data for 2021 is not available, but it spikes significantly to over 20 in both 2022 and 2023, before moderating to 13.79 in 2024. These elevated adjusted leverage ratios suggest that excluding goodwill greatly affects the perceived capital structure risk and indicate periods of substantial leverage when goodwill and intangible assets are excluded.

Overall, the reported metrics suggest stable growth in asset and equity levels with modest improvement in leverage. However, the adjusted figures, which exclude goodwill, reveal greater financial risk exposure, with fluctuating equity levels and notably high leverage ratios particularly in the middle years analyzed. This divergence between reported and adjusted figures highlights the material impact of goodwill on the financial position and risk profile of the entity.

The analysis of the annual financial data reveals several notable trends in both the reported and goodwill-adjusted figures for shareholders' equity and return on equity (ROE) over the five-year period.

Reported Shareholders’ Equity

The reported total shareholders’ equity demonstrates a consistent upward trajectory from 34,507 million US dollars in 2020 to 49,584 million in 2024. This steady increase signifies ongoing capital growth and accumulation of retained earnings over the years.

Adjusted Shareholders’ Equity

The adjusted shareholders’ equity, which excludes goodwill, shows considerable volatility. It starts at 8,466 million US dollars in 2020 but turns negative in 2021 at -1,131 million. Thereafter, it recovers to positive values in the subsequent years, reaching 3,731 million in 2024. This fluctuation indicates significant changes in intangible assets or goodwill adjustments impacting the equity base.

Reported Return on Equity (ROE)

The reported ROE exhibits a declining trend over the period, starting at 18.47% in 2020 and gradually decreasing to 12.78% by 2024. This decline suggests that while equity has increased, the company’s ability to generate profits relative to shareholders’ equity has diminished over time.

Adjusted Return on Equity (ROE)

The adjusted ROE, which takes into account the exclusion of goodwill, presents a highly volatile pattern with a missing value for 2021. The available data reveal an exceptionally high adjusted ROE of 75.3% in 2020, which spikes dramatically to 249.82% in 2022 before decreasing to 169.79% in 2024. These elevated percentages compared to the reported ROE suggest that the tangible equity base generates much higher returns once goodwill is excluded, reflecting possibly higher profitability relative to the adjusted equity base. The decrease from 2022 onward indicates a normalization trend or changes in earnings or equity adjustments.

In summary, the reported equity base has steadily increased, accompanied by a gradual reduction in reported ROE. Conversely, the adjusted equity figures and ROE reveal significant volatility, indicating material effects from goodwill and intangible asset adjustments. The adjusted ROE values imply strong profitability on a tangible equity basis despite fluctuations, which contrasts with the flatter trend in reported metrics.

The financial data reveals notable trends in both reported and goodwill-adjusted figures over the evaluated five-year period.

Total Assets

Reported total assets increased substantially from 69,052 million US dollars in 2020 to a peak of 98,726 million in 2023, showing significant growth. However, this figure slightly declined to 97,321 million in 2024, indicating a minor reduction after several years of increase. Conversely, the adjusted total assets, which exclude goodwill effects, show a more modest but consistent upward trend from 43,011 million in 2020 reaching a maximum of 55,958 million in 2022, followed by a decline in subsequent years to 51,468 million in 2024. This suggests some impairment or write-down of goodwill or intangible assets.

Return on Assets (ROA)

The reported ROA indicates a declining trend from 9.23% in 2020 to a low of 6.07% in 2023, before a slight recovery to 6.51% in 2024. This decline points to decreasing profitability relative to the reported asset base during the period, despite the growing asset values. On the other hand, the adjusted ROA, which considers assets net of goodwill, starts higher at 14.82% in 2020 and follows a downward trajectory to 10.96% in 2023, then experiences a rebound to 12.31% in 2024. This pattern suggests that the company's core asset profitability has also weakened over time but remains significantly better than indicated by the reported figures, highlighting the distorting effect goodwill has on reported returns.

Overall, while reported total assets show considerable growth followed by stabilization, the adjusted total assets portray a more cautious increase followed by a decline, reflecting adjustments for asset quality. Profitability as measured by ROA declined on both reported and adjusted bases but with adjusted ROA maintaining a higher level, implying stronger performance when intangible asset effects are excluded. The partial recovery in 2024 in both asset base and profitability may indicate initial signs of operational improvement or revaluation effects.