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Analysis of Agencies with Revenues Less than $500,000
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VI.
Financial Stability (Agencies with Revenues Less than $500,000)
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
1.36:1
2.00:1
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.
Tangible Net Worth (as % of Net Rev)
9.7%
21.8%
C. Receivables
1. Receivables/Payable 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 payable at a given
point in time.)
Receivables/Payables Ratio
88.9%
31.5%
2. Aged Receivables
Over 60
24.2%
4.9%
Over 90
12.9%
6.1%
Average
Average
Top 25%
Average
Top 25%
Average
Top 25%
Top 25%
VII. Carrier Representation (Agencies with Revenues Less than $500,000
)
Average +25% Profit +25% Growth
Personal Lines
National
3.3
2.7
2.2
Regional
4.1
4.8
3.8
Commercial Lines
National
4.0
2.0
2.0
Regional
3.3
2.8
2.8
Total Carriers
14.7
12.3
10.8
% of Net Rev from Top Carrier
34.8%
33.0%
29.3%
% of Net Rev from Top 3 Carriers
55.2%
54.3%
55.2%