trust ratio

Articles tagged with trust ratio


Accounting Audits And Reviews: Worth The Expense

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ACCOUNTING AUDITS AND REVIEWS: WORTH THE EXPENSE by Chris Burand Agencies can avoid a lot of grief by obtaining annual accountants reviews or audits. An audit can catch inno...

Cluster Tips

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CLUSTER TIPS by Chris Burand Cluster contracts among individual agencies or groups of agencies (not necessarily the major cluster-type agency organizations) are almost alw...

Evaluate Prospective Buyers For Your Agency

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EVALUATE PROSPECTIVE BUYERS FOR YOUR AGENCY by Patricia Berry Before selling your agency, get answers to these questions. Many agency acquisitions are based on retention because b...

External Growth With Successful Acquisitions

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EXTERNAL GROWTH WITH SUCCESSFUL ACQUISITIONS by Carol Hammes Be prepared to do an acquisition before the opportunity presents itself. INTRODUCTION Most agencies will have the opportu...

Financial-Statement Analysis

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FINANCIAL-STATEMENT ANALYSIS by John Jaques This article provides an overview for evaluating the financial strengths and weaknesses of an independent insurance agency. The material provid...

George, The Eternal Optimist

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GEORGE, THE ETERNAL OPTIMIST by Chris Burand This object lesson shows how NOT to grow your agency. A few years ago, an agency principal let...

Maximizing Ownership Return

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MAXIMIZING OWNERSHIP RETURN by Carol Hammes During the past several years, a relatively conservative investor could have achieved an annual investment return of 25% or more in the stock market t...

Myths Busted: Agency Trust Money And Capitalization

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MYTHS BUSTED: AGENCY TRUST MONEY AND CAPITALIZATION by Chris Burand July 8, 2010 Insurance Journal: lsquo;FBI Raids Tennessee Payroll, Insurance Firm Sommet Group Jul...

Profile Checksheet Of Agency Heading Toward Bankruptcy

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PROFILE CHECKSHEET OFAGENCY HEADING TOWARD BANKRUPTCY by Chris Burand How healthy is your agency? This checksheet and financial analysis criteria can give you the answer. Use thes...

Trust Accounts: Do they really matter?

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An agency valuation I completed recently came in considerably lower than the agency owners expected. The reason? Their balance sheet was very poor and they were materially out of trust: Meaning that their ratio of Accounts Receivable + Cash to Accounts Payable was less than 1. The agency principals were quite upset that I would decrease their value for this reason. They retorted, “We always pay our companies on time, our companies have never been hurt by this, our customers have never been hurt by this, and our CPA has never found fault with this practice. You're the only one who thinks it matters!”

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