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Analysis of Agencies with Revenues
Between $1,250,000 and $2,500,000
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.
Liquidity/Current Ratio
1.40:1
2.07:1
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
Tangible Net Worth (as % of Net Rev)
6.3%
28.8%
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.)
Receivables/Payables Ratio
63.0%
13.6%
2. Aged Receivables
Over 60
-9.9%
8.3%
Over 90
-13.8%
6.0%
Average
Top 25%
Average
Top 25%
Top 25%
Average
Top 25%
Page 52
2003 Best Practices Study