Explanations for Key Financial Ratios

                  
          Current Ratio (Current Assets/Current Liabilities) -
                   This ratio measures the organization's ability to meet its current
                   liabilities. An overall accepted standard is 2.0.
         

         Days in Accounts Receivable (Accounts Receivable/Revenue per day) -
                   This ratio measures the number of days it generally takes the company
                   to collect its registration fees. A value of 63 or less is considered
                   desirable.
         

          Equity Financing Ratio (Fund Balance/Total Assets) -
                   This ratio indicates the percentage of total assets that have been
                   financed with sources other than debt. Generally, values over 50 are
                   desired. Higher values for this ratio are regarded as positive
                   indicators of sound financial condition.
         

          Days Cash & Investments (Cash & Investments/Operating
          Expenses per day)-
                   This ratio is a measure of liquidity. It measures the number of days
                   an entity could continue to pay its daily expenses due to a sudden loss
                   in revenue. It also assumes no conversion into cash of accounts
                   receivable.
         

          Operating Margin Rates (Revenue over Expenses/Total Revenue) -
                   This ratio describes net income per dollar of revenue. Generally, the
                   higher the value, the better the financial condition of the
                   organization. Operating margin ratios of 5% or higher are desired to
                   assure adequate resources for maintaining and replacing assets.

           Return on Total Assets (Revenues over Expenses/Total Assets) - 
                  This ratio defines the amount of excess revenue over expenses per
                   dollar of investment. Adequate levels of return are critical to ensure
                   continued viability and replacement of assets. Values of 5% or
                   higher are generally desired.
         

          Cash Flow to Debt Ratio (Excess of Revenue over Expenses +
          Depreciation/Current Liabilities and Long-term debt)-
                   This is a critical ratio in predicting financial success. A low value
                   often indicates a potential problem in meeting future debt
                   requirements. Values of .20 or higher are desired.
         

          Average Payment Period Ratio (Accounts Payable-Trade/Nonpayroll Cash
          Operating Expenses per day) -
                   This ratio indicates the average length of time the organization takes
                   to liquidate its trade payables. Values greater than 40 can indicate
                   liquidity problems.
         

          Average Cash Expenses per Month (Total Expenses (minus) Depreciation
          and Amortization/2) -
                   This calculation identifies total cash expenses per month. Expenses
                   are those associated with normal company operations.
         

          Number of Months Cash and Net Receivables -
                   This calculation determines the number of months of cash and net
                   receivables available to fund normal operations in
                   the event of a sudden loss in revenue. It does not consider payment
                   of existing current liabilities and long-term debt.
         

          Corporate Net Worth (Cash & Investments plus Accounts
          Receivable and Building Investment less (minus) Total Liabilities) -
                   This calculation reveals ability to meet total debt obligations
                   with its cash, accounts receivable and investment holdings. This
                   calculation assumes full collectability of accounts receivable.