The ratings for Danaher 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 quality analytical instrumentation, electronic test tools, and motion 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, and diversification by customer, end-markets, and geography, together with a good portion of sales going to 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 about
