2023 Best Practices Study

Financial Stability

AGENCIES WITH REVENUES OF:

AVERAGE

<$1.25M $1.25-$2.5M $2.5-$5M $5-$10M $10-$25M >$25M

Current Ratio

1.3:1

2.0:1

2.1:1

2.1:1

1.6:1

1.7:1

Trust Ratio

2.8:1

2.8:1

2.3:1

2.3:1

2.4:1

2.0:1

Tangible Net Worth (% of Net Rev)

13.2%

13.8%

16.6%

22.8%

20.5%

18.0%

Receivables-to-Payables Ratio

50.0%

50.0%

60.0%

70.0%

70.0%

70.0%

Accounts Receivables: % Receivables Aged 61-90 Days

18.2%

31.2%

14.1%

12.6%

11.1%

9.7%

% Receivables Aged Past 90 Days

38.8%

13.1%

18.6%

11.4%

12.2%

12.0%

% of P&C Revenues - Agency Billed

40.3%

24.9%

21.2%

28.2%

33.8%

45.6%

% of P&C Revenues - Direct Billed

59.7%

75.1%

78.8%

71.8%

66.2%

54.4%

AGENCIES WITH REVENUES OF:

TOP QUARTILE

<$1.25M $1.25-$2.5M $2.5-$5M $5-$10M $10-$25M >$25M

Current Ratio

1.4:1

2.5:1

3.0:1

2.8:1

2.2:1

2.1:1

Trust Ratio

3.2:1

3.0:1

2.8:1

2.6:1

3.2:1

2.4:1

Tangible Net Worth (% of Net Rev)

26.0%

26.7%

23.0%

34.4%

30.7%

29.2%

Receivables-to-Payables Ratio

-

10.0%

30.0%

30.0%

40.0%

40.0%

Accounts Receivables: % Receivables Aged 61-90 Days

0.0%

0.0%

0.0%

0.0%

0.5%

1.4%

% Receivables Aged Past 90 Days

27.6%

3.2%

6.9%

3.9%

2.0%

1.6%

AGENCIES WITH REVENUES OF:

AVERAGE

<$1.25M $1.25-$2.5M $2.5-$5M $5-$10M $10-$25M >$25M

Debt Metrics: % of All Loans by Source Type: Community Bank

39.4%

38.2%

34.9%

47.1%

57.7%

52.1%

Industry Lender

4.5%

17.6%

11.5%

6.9%

8.1%

1.6%

Private Equity Lender

0.0%

0.0%

2.1%

3.2%

5.6%

9.4%

Shareholder

19.7%

23.5%

51.0%

25.4%

19.7%

24.9%

Other

36.4%

20.6%

0.5%

17.3%

9.0%

12.0%

% of Firms that have Identified Debt

50.0%

54.8%

55.8%

48.2%

50.0%

61.7%

Of those firms that have debt: Average Total Debt

$346,861

$581,302

$901,898

$2,617,141

$4,293,328 $43,759,937

Total Leverage 1

1.5x

1.6x

1.0x

1.5x

1.1x

1.7x

Average Effective Interest Rate

6.4%

4.2%

3.9%

4.4%

4.3%

5.2%

Average Term (Years to Maturity)

5.7

7.6

8.1

7.1

7.5

6.1

1 Total Debt/Pro Forma EBITDA

Cross Category Comparison

57

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