2003 Best Practices Study

Analysis of Agencies with Revenues Less Than $500,000

FINANCIAL STABILITY

A. Current Ratio A current ratio greater than 1:1 indicates that cash and assets with short-term maturities are sufficient to meet a firm's short-term obligations.

Average

Top 25%

Liquidity/Current Ratio

1.36:1

2.19:1

B. Tangible Net Worth The tangible net worth is an important measure as it represents the net value of the corporation if it were liquidated. A low or negative tangible net worth impacts a firm's ability to invest in new opportunities, develop new products, hire new employees, make other capital expenditures and handle stockholder redemption obligations.

Average

Top 25%

Tangible Net Worth (as % of Net Rev)

16.9%

32.5%

C. Receivables

1. Receivables/Payables Ratio This factor measures the collection practices of an agency, with a lower ratio representing more timely collections. (Calculated by dividing total receivables by total payables at a given point in time.)

Average

Top 25%

Receivables/Payables Ratio

65.8%

6.6%

2. Aged Receivables

Average

Top 25%

Over 60 Over 90

58.3% 57.5%

8.7% 3.3%

Page 23 2003 Best Practices Study