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Analysis of Agencies with Revenues
Greater Than $10,000,000
FINANCIAL STABILITY
A. Current Ratio
Liquidity/Current Ratio
1.17:1
1.48:1
B. Tangible Net Worth
Average
Tangible Net Worth (as % of Net Rev)
10.9%
31.9%
C. Receivables
1. Receivables/Payables Ratio
Receivables/Payables Ratio
52.3%
17.8%
2. Aged Receivables
Over 60
8.2%
2.8%
Over 90
3.9%
0.9%
more timely collections. (Calculated by dividing total receivables by total payables at a given
point in time.)
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.
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
Average
Top 25%
Average
Top 25%
Top 25%
Average
Top 25%
ability to invest in new opportunities, develop new products, hire new employees, make
other capital expenditures and handle stockholder redemption obligations.
This factor measures the collection practices of an agency, with a lower ratio representing
Page 94
2003 Best Practices Study