Stock Analysis on Net
Stock Analysis on Net

Danaher Corp. (NYSE:DHR)

Common-Size Income Statement

Danaher Corp., common-size consolidated income statement

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12 months ended: Dec 31, 2025 Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021
Sales 100.00 100.00 100.00 100.00 100.00
Cost of sales -40.89 -40.50 -41.26 -39.79 -39.05
Gross profit 59.11% 59.50% 58.74% 60.21% 60.95%
Selling, general and administrative expenses -33.52 -32.50 -30.68 -27.06 -27.83
Research and development expenses -6.50 -6.63 -6.29 -5.54 -5.91
Other operating expenses 0.00 0.00 0.00 0.00 -1.86
Operating costs -40.02% -39.13% -36.97% -32.60% -35.61%
Operating profit 19.09% 20.37% 21.77% 27.61% 25.35%
Other income (expense), net -0.90 -0.23 -0.73 -0.72 1.55
Loss on early extinguishment of borrowings 0.00 0.00 0.00 0.00 -0.33
Interest expense -1.08 -1.16 -1.20 -0.67 -0.81
Interest income 0.12 0.49 1.27 0.13 0.04
Nonoperating income (expense) -1.86% -0.91% -0.66% -1.26% 0.45%
Earnings from continuing operations before income taxes 17.23% 19.46% 21.11% 26.35% 25.80%
Income taxes -2.58 -3.13 -3.44 -3.44 -4.25
Net earnings from continuing operations 14.65% 16.33% 17.67% 22.91% 21.55%
Earnings from discontinued operations, net of income taxes 0.06 0.00 2.27 0.00 0.29
Net earnings 14.71% 16.33% 19.94% 22.91% 21.84%
Mandatory convertible preferred stock dividends 0.00 0.00 -0.09 -0.34 -0.56
Net earnings attributable to common stockholders 14.71% 16.33% 19.85% 22.57% 21.28%

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).

The common-size income statement reveals several noteworthy trends between 2021 and 2025. While sales remained consistently at 100% throughout the period, significant shifts occurred in profitability and expense management. A general trend of declining profitability is observed, particularly in the later years of the analyzed period.

Gross Profit
Gross profit as a percentage of sales experienced a decline from 60.95% in 2021 to 58.74% in 2023, followed by a slight recovery to 59.11% in 2025. This suggests increasing costs of goods sold relative to sales, impacting overall gross margin. The cost of sales increased from -39.05% to -40.89% over the period.
Operating Expenses
Operating costs, encompassing selling, general, administrative, and research & development expenses, demonstrated a consistent increase as a percentage of sales. From 32.60% in 2022, operating costs rose to 40.02% in 2025. This increase was most pronounced in selling, general and administrative expenses, which grew from -27.06% to -33.52% over the same period. Research and development expenses also increased, though at a slower pace, from -5.54% to -6.50%.
Operating Profit
Consequently, operating profit decreased substantially from 25.35% of sales in 2021 to 19.09% in 2025. This decline reflects the combined effect of the shrinking gross margin and expanding operating expenses. The largest drop occurred between 2023 and 2025.
Nonoperating Items
Nonoperating income (expense) fluctuated significantly, moving from a positive 0.45% in 2021 to a negative -1.86% in 2025. Interest income contributed to this volatility, peaking at 1.27% in 2023 before decreasing to 0.12% in 2025. Interest expense remained relatively stable, ranging from -0.67% to -1.20%.
Net Earnings
Net earnings followed a similar downward trajectory as operating profit, decreasing from 21.84% of sales in 2021 to 14.71% in 2025. Net earnings attributable to common stockholders mirrored this trend, declining from 21.28% to 14.71%. The impact of discontinued operations was minimal, with a positive contribution in 2023 and 2025, but negligible in other years.
Income Taxes
The effective tax rate, as indicated by income taxes as a percentage of sales, decreased from -4.25% in 2021 to -2.58% in 2025. This decrease partially offset the decline in earnings before taxes, but did not fully compensate for it.
Mandatory Convertible Preferred Stock Dividends
Mandatory convertible preferred stock dividends decreased from -0.56% in 2021 to -0.09% in 2023, and were absent in 2024 and 2025. This suggests a reduction or elimination of this dividend obligation over time.

In summary, the analysis indicates a trend of increasing expenses and decreasing profitability. While sales remained constant, the company experienced pressure on both gross margins and operating efficiency, ultimately leading to a decline in net earnings as a percentage of sales.

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