2000 Best Practices Study

Net revenues divided by the average number of “full-time equivalent” employees your agency employed during the most recently completed fiscal year. Spread Per Employee: Total revenue per employee minus compensation per employee. While revenue per employee has been a standard productivity measure, the “spread” measures the dollars per employee available to pay all other agency expenses and generate a profit for the agency. It is another measure of productivity. Stockholders’ Equity: Total assets minus total liabilities. Stockholders’ equity reflects the “book value” of a firm. Tangible Net Worth: Total assets minus intangible assets equals total tangible assets. Total tangible assets minus total liabilities equals tangible net worth. The tangible net worth is an important measure as it represents the net value of the corporation if it were liquidated. Validated Producer: Salesperson whose production supports the compensation received based on the existing producer compensation percentage, formula or method used by the agency. If a salesperson has been with the agency for over three years, they should be included as validated even if they are not. Weighted Performance: In order to arrive at an overall measure of performance, we have scored, weighted and compiled each of the individual performance factors listed. Working Capital: Current assets minus current liabilities. This measures an agency’s ability to meet short-term obligations. QUESTIONS REGARDING THE STUDY RESULTS CAN BE DIRECTED TO: Reagan Consulting 7 Piedmont Center, Suite 417 Atlanta, GA 30305 Email : infor@reaganconsulting.com

Phone: 404-233-5545 Fax: 404237-5996

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

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