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Analysis of Agencies with Revenues Between $2,500,000 and $5,000,000
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VI.
Financial Stability (Agencies with Revenues Between $2,500,000 and $5,000,000)
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
1.41:1
2.04:1
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)
11.2%
27.0%
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
68.8%
14.6%
2. Aged Receivables
Over 60
15.6%
4.2%
Over 90
20.3%
2.9%
Top 25%
Top 25%
Average
Top 25%
Average
Top 25%
Average
Average
VII. Carrier Representation (Agencies with Revenues Between $2,500,000 and $5,000,000)
Average +25% Profit +25% Growth
Personal Lines
National
5.9
5.7
4.9
Regional
4.0
3.0
2.6
Commercial Lines
National
10.9
10.7
8.1
Regional
7.0
5.0
3.6
Total Carriers
27.8
24.4
19.1
% of Net Rev from Top Carrier
17.6%
16.5%
12.9%
% of Net Rev from Top 3 Carriers
35.3%
33.9%
31.3%