2022 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

1.07:1 1.42:1 12.0% 36.0% 46.3% 10.5% 24.5% 75.5%

1.77:1 2.33:1 10.7% 41.4%

2.01:1 3.00:1 11.3% 39.2% 20.0% -3.2% 22.6% 77.4%

2.09:1 2.28:1 11.3% 45.0% 12.0% -7.7% 32.9% 67.1%

1.83:1 2.51:1 15.1% 44.0%

1.60:1 2.10:1 11.0% 54.7%

Trust Ratio

Tangible Net Worth (% of Net Rev) Receivables-to-Payables Ratio Accounts Receivables: % Receivables Aged 61-90 Days % Receivables Aged Past 90 Days % of P&C Revenues - Agency Billed % of P&C Revenues - Direct Billed

32.6%

9.4%

9.3% 8.1%

3.3%

13.8%

15.6% 84.4%

34.5% 65.5%

50.5% 49.5%

AGENCIES WITH REVENUES OF:

TOP QUARTILE

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

Current Ratio

2.69:1 2.30:1 30.7% 10.3%

3.81:1 3.52:1 30.9%

3.69:1 4.53:1 28.2% -13.4%

3.76:1 3.58:1 29.1%

3.02:1 4.25:1 31.1% 11.3%

2.60:1 3.34:1 29.6% 19.8%

Trust Ratio

Tangible Net Worth (% of Net Rev) Receivables-to-Payables Ratio Accounts Receivables: % Receivables Aged 61-90 Days % Receivables Aged Past 90 Days

9.6%

4.7%

0.3% 0.7%

0.3% 0.0%

-5.1%

-5.3%

-1.0% -5.4%

-0.2% -6.3%

-79.8%

-89.7%

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

40.0% 12.0%

56.5%

44.4% 11.1%

49.2% 11.9% 15.3%

43.6%

32.7%

Industry Lender

4.3% 8.7%

6.4% 0.0%

0.9% 8.0%

Private Equity Lender

4.0%

3.7%

Shareholder

12.0% 32.0%

21.7%

37.0%

6.8%

35.1% 14.9%

42.5% 15.9%

Other

8.7%

3.7%

16.9%

% of Firms that have Identified Debt

51.6%

53.3%

54.1%

48.2%

41.7%

53.3%

Of those firms that have debt: Average Total Debt

$358,482

$811,434

$1,136,498

$2,741,745

$3,892,955 $18,143,438

Total Leverage 1

1.7x 5.5%

2.1x 4.3%

1.0x 3.9%

1.4x 4.5%

1.1x 4.0%

1.4x 3.8%

Average Effective Interest Rate Average Term (Years to Maturity)

7.4

8.7

6.3

6.8

6.4

5.9

1 Total Debt/Pro Forma EBITDA

Cross Category Comparison

60