The ratings for Danaher Corp. reflect an above-average business profile together with a sound balance sheet, strong cash flow generation, and a moderately conservative financial policy. Danaher is a leading maker of process/environmental controls, including water testing instrumentation, electronic test tools, and motion control products. The firm is also a leading manufacturer of mechanics' hand tools and automotive specialty tools. Although the business is cyclical, factors such as strong brand-name recognition; customer, end-market, and geographic diversity; and a healthy portion of sales going to the more stable replacement markets mitigate earnings and cash flow volatility. This bodes well for continued good operating performance. Pretax return on permanent capital for 2000 was 22%, and is expected to average between 20%-25% over
