Danaher Corporation (DHR) Cash Flow Statement

The persistent OCF/NI ratio above 1.5 suggests that reported earnings are well-backed by cash generation, likely due to significant non-cash charges like D&A. However, the ratio dipped to 1.28 in 2026Q1, which may reflect temporary working capital outflows, but the overall trend remains robust.

Despite quarterly volatility, FCF margins have remained consistently above 18%, which is strong relative to peers like Thermo Fisher (15.8%) and Agilent (17.4%). The slight dip in 2026Q1 to 18.2% appears to be a seasonal effect, but the overall trajectory suggests stable cash generation.

The low capex intensity relative to revenue suggests that Danaher's growth does not require heavy capital investment, which supports high FCF conversion. The spike to 7.9% in 2024Q4 may indicate a one-time investment, but the overall trend remains stable.

The negative working capital changes in several quarters, such as -$395M in 2025Q2, may indicate faster collections or delayed payments, but the positive changes in others suggest normal cyclicality. Investors should monitor whether these swings become more pronounced, which could signal inventory buildup or receivables issues.

The massive acquisition outflow in 2026Q2 dwarfs the regular buyback and dividend activity, suggesting that management is prioritizing M&A for growth. This aligns with the prior income statement analysis showing stable revenue growth, but the large cash outlay may pressure near-term liquidity.

The cumulative gap of $6.3 billion suggests that earnings are conservative and cash flows are robust, likely due to high D&A and working capital management. This divergence supports the view that Danaher's earnings quality is high, but investors should note that the gap may narrow if growth slows.