2003 Best Practices Study

Analysis of Agencies with Revenues Greater Than $10,000,000

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

1.17:1

1.48:1

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)

10.9%

31.9%

C. Receivables

1. Receivables/Payables Ratio

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

Average

Top 25%

Receivables/Payables Ratio

52.3%

17.8%

2. Aged Receivables

Average

Top 25%

Over 60 Over 90

8.2% 3.9%

2.8% 0.9%

Page 94 2003 Best Practices Study