data/tooltip_definitions.json

{
  "reward_ratio": "\ud83d\udcd0 The sum of Executive Payroll, Production Payroll and EBITDA divided by Gross Revenues | This ratio measures how well an agency is satisfying the financial and growth requirements of the owners. The reward ratio provides a comparison between agencies regardless of whether the profits are paid out in various forms to owners, or retained...",
  "rule_of_40": "\ud83d\udcd0 EBITDA Margin (The Sum of Pre-Tax Profits, Interest Expense, Depreciation and Amortization Divided by Net Revenue) This Year Plus Total Commissions & Fees Organic Growth Rate This Year | Rule of 40 is an commonly utilized industry term to gauge the balance between growth and profitability. Firms should target results of 40% or above.",
  "owner_return_rate": "\ud83d\udcd0 Total EBITDA dollars Plus the sum Total of all payroll allocated to employees with any % of agency ownership divided by Net Revenue | This ratio intends to measure the agency's total return to its owners over the past 12 months, inclusive of both payroll and the firm's profitability.",
  "net_revenue_growth_rate": "\ud83d\udcd0 The percentage change from last year's net revenues to this year's net revenues | This calculation illustrates an agency's growth in net revenue. It provides insight into how well a firm is balancing contingents and other sources of income, as well as commission and fee income.",
  "servicing_cost_per_comm": "\ud83d\udcd0 Servicing Costs (Service Payroll plus Total Operating Expenses) divided by Total Commissions & Fees | The result measures the agency's ability to leverage its cost of service against the overall productivity performance of personnel. In most agencies this cost should not exceed $.40 and in no event should a $.50 measurement be tolerated. Close...",
  "employee_marginal_profitability": "\ud83d\udcd0 Revenue per Employee minus Total Payroll per Employee | This is a meaningful measurement of productivity since the marginal profitability is the contribution per employee to the overhead and profit of the agency. To improve this ratio either revenue per employee must increase, payroll per employee must...",
  "contingent_override_consistency": "\ud83d\udcd0 The current year's Contingent and Override Income as a Percentage of the current year's P&C and L&H Commissions divided by Contingent and Override Income for Two Years (this year and last year) as a... | Here, contingents and overrides as a percentage of P&C and L&H commissions for the current year is compared to contingent and override income's percentage of P&C and L&H commissions for the past two years. If this ratio is greater than 1.0, then...",
  "sales_velocity": "\ud83d\udcd0 Total New Business Commissions This Year Divided by Total Commissions & Fees Income Last Year Less Fee Income Last Year | This calculation illustrates the total amount of new business produced during the past twelve months as a percentage of the brokerage's total commission income over the prior year. This ratio helps a brokerage understand the amount of new business...",
  "total_cf_growth_rate": "\ud83d\udcd0 The Difference between Total Commissions & Fees This Year and Total Commissions & Fees Last Year divided by Total Commissions & Fees Last Year | This calculation illustrates an agency's growth in Total Commissions & Fees. Total Commissions & Fees includes P&C Commissions, L&H Commissions, Program & Wholesale Commissions, Wealth & Retirement Income, and Fee Income.",
  "new_biz_per_prod_person": "\ud83d\udcd0 The Sum of New Business Commissions Less House New Business This Year divided by Total Production Personnel | This ratio measures the new business production per producer. This calculation can be utilized both in monitoring and goal setting by the agency.",
  "nupp": "\ud83d\udcd0 The Sum of Total Compensation for all Unvalidated Producers This Year less \"Validated\" Compensation This Year Divided by Net Revenue This Year | This ratio measures a firm's investment in unvalidated producers. To calculate NUPP, we first identify all unvalidated producers in a firm and sum their total payroll expense. Then, we calculate how much they would earn, based on their book of...",
  "revenue_per_employee": "\ud83d\udcd0 Net Revenues divided by Total Personnel | Revenue per employee is one of the most basic measures of employee productivity and, as such, functions somewhat as an industry standard. Generally, the higher this number, the greater the employee productivity. To improve results, net revenues must...",
  "cf_per_prod_person": "\ud83d\udcd0 Total Commissions & Fees divided by Total Production Personnel | Total commissions and fees per production person is a consistent measure that allows for comparison of producer productivity from one agency to the next. Producers or owners who are effectively delegating their servicing load should have higher than...",
  "cf_per_service_person": "\ud83d\udcd0 Total Commissions & Fees divided by Total Service Personnel | The result of this calculation focuses on productivity of the Service Personnel by allocating all commission and fee income to each service person.",
  "support_staff_pct": "\ud83d\udcd0 Support Personnel divided by Total Personnel | This ratio measures the relationship of an agency's support personnel to total agency staff. It is another method for measuring either the productivity or staffing adequacy of Support Personnel.",
  "debt_service_coverage": "\ud83d\udcd0 The Sum of Pre-Tax Profits, Interest Expense, Depreciation and Amortization This Year, Divided by the Sum of Interest Expense and the Current Portion of Long Term Debt This Year. | This ratio measures the available cash flow to meet the firm's current debt obligations. Generally, a higher number is better. A DSCR of less than 1 indicates that the firm is at risk of being unable to cover current debt payments.",
  "trust_ratio": "The Sum of Average Cash, Average Investments and Average Accounts Receivable -- Insurance divided by Average Accounts Payable -- Insurance The trust ratio measures an company's ability to meet account current payments owed to the insurance carriers....",
  "defensive_interval": "\ud83d\udcd0 The Difference between Average Total Current Assets and Average Total Current Liabilities divided by the result of Total Expenses divided by 365 | The obligation of agencies to make cash expenditures before the cash from customers flows in to cover these expenses creates a need for working capital. Working capital is defined as current assets minus current liabilities. How much working capital...",
  "shareholder_age": "\ud83d\udcd0 The Sum of Each Shareholders' Age times Their Ownership Percentage | This ratio shows the average of the shareholders' age at the time of the quarter end date weighted by the percentage of stock they own. Firms with 100% ESOP ownership are excluded from this calculation.",
  "organic_growth_tcf": "Growth excluding acquisitions. Measures true internal growth momentum.",
  "total_growth_tcf": "\ud83d\udcd0 The Difference between Total Commissions & Fees This Year and Total Commissions & Fees Last Year divided by Total Commissions & Fees Last Year | This calculation illustrates an agency's growth in Total Commissions & Fees. Total Commissions & Fees includes P&C Commissions, L&H Commissions, Program & Wholesale Commissions, Wealth & Retirement Income, and Fee Income.",
  "total_growth_pc": "Year-over-year growth rate in Property & Casualty commissions.",
  "total_growth_cl": "\ud83d\udcd0 The Difference between Commercial Lines Commission Income This Year and Commercial Lines Commission Income Last Year divided by Commercial Lines Commission Income Last Year | This percentage indicates an agency's growth in Commercial Lines.",
  "total_growth_pl": "\ud83d\udcd0 The difference between Personal Lines Commission Income This Year and Personal Lines Commission Income Last Year divided by Personal Lines Commission Income Last Year | This calculation illustrates an agency's growth in Personal Lines.",
  "total_growth_lh": "\ud83d\udcd0 The difference between Life & Health Commissions This Year and Life & Health Commissions Last Year divided by Life & Health Commissions Last Year | This calculation illustrates an agency's growth in the Life and Health business.",
  "total_growth_grp": "Year-over-year growth rate in Group commissions.",
  "leakage_lift": "Definition for Leakage Lift",
  "operational_ebitda_margin": "\ud83d\udcd0 EBITDA (Pre-Tax Profit less Interest, Depreciation, Amortization Expense) minus Contingent Income, Life & Health Overrides, Investment Income, and Miscellaneous Income | EBITDA from core insurance revenue. By excluding other sources of income, this measures a company's profitability based only on commission and fee income.",
  "compensation_pct_net_rev": "\ud83d\udcd0 Total Compensation \u00f7 Net Revenues | Measures the percentage of net revenue consumed by all forms of compensation. Lower is better.",
  "ebitda": "Earnings before interest, tax, depreciation and amortization.",
  "net_revenues": "Total income after deducting outside commission expense. The base for most profitability ratios.",
  "total_commissions_fees": "Sum of P&C Commissions, L&H Commissions, Program & Wholesale, Wealth & Retirement, and Fee Income.",
  "pretax_profit": "Net Revenues minus Total Expenses. The bottom-line profit before tax obligations.",
  "pc_commissions": "Total Property & Casualty commission income including Commercial Lines and Personal Lines.",
  "lh_commissions": "Total Life & Health commission income including Group and Individual lines.",
  "fee_income": "Includes earnings from countersignature, inspection, and finance charges, third-party administration services, and fees earned from engineering, risk management, loss prevention, and other consulting services.",
  "contingents": "Commissions received as contingent payments including bonus commissions and profit-sharing from companies. Property & Casualty contingents only.",
  "rule_of_20": "\ud83d\udcd0 EBITDA Margin (The Sum of Pre-Tax Profits, Interest Expense, Depreciation and Amortization Divided by Net Revenue) This Year Divided by Two Plus Total Commissions & Fees Organic Growth Rate This Year | Rule of 20 is an commonly utilized industry term to gauge the balance between growth and profitability. Firms should target results of 20% or above."
}