63 / 113
Analysis of Agencies with Revenues Between $1,250,000 and $2,500,000
63 of 113
VI.
Financial Stability (Agencies with Revenues Between $1,250,000 and $2,500,000)
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
1.19:1
1.74:1
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 a % of Net Rev)
7.1%
25.7%
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
43.3%
7.2%
2. Aged Receivables
Over 60
12.3%
6.6%
Over 90
7.2%
5.2%
Top 25%
Top 25%
Average
Top 25%
Average
Top 25%
Average
Average
VII. Carrier Representation (Agencies with Revenues Between $1,250,000 and $2,500,000)
Average +25% Profit +25% Growth
Personal Lines
National
4.0
4.1
4.6
Regional
3.9
5.3
2.6
Commercial Lines
National
6.4
5.4
8.0
Regional
5.0
6.0
3.6
Total Carriers
19.3
20.9
18.7
% of Net Rev from Top Carrier
19.7%
22.1%
21.5%
% of Net Rev from Top 3 Carriers
38.4%
39.4%
38.0%