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Group Title: Economic information report
Title: Business analysis of woody ornamental container and field nurseries in Florida
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 Material Information
Title: Business analysis of woody ornamental container and field nurseries in Florida
Series Title: Economic information report
Alternate Title: Woody ornamental container and field nurseries in Florida
Physical Description: v. : ; 28 cm.
Language: English
Creator: University of Florida -- Food and Resource Economics Dept
Florida Cooperative Extension Service
Publisher: Food & Resource Economics Dept., Agricultural Experiment Stations and Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville
Publication Date: 1989
 Subjects
Subject: Nurseries (Horticulture) -- Economic aspects -- Periodicals -- Florida   ( lcsh )
Ornamental woody plants -- Economic aspects -- Periodicals -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
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Full Text

March 1991


Business Analysis of
Woody Ornamental Container and
Field Nurseries in Florida, 1989









Alan Hodges


Florida Cooperative Extension Service / Institute of Food and Agricultural Sciences
University of Florida, Gainesville / John T. Woeste, Dean for Extension


Circular 954












BUSINESS ANALYSIS OF WOODY ORNAMENTAL
CONTAINER AND FIELD NURSERIES IN FLORIDA, 1989
Alan Hodges


Food & Resource Economics Department
Institute of Food & Agricultural Sciences
University of Florida
Gainesville, FL


December 1990


















ACKNOWLEDGEMENTS
This report was made possible by the cooperating woody ornamental nursery operators who made available
their production and accounting records on a confidential basis for analysis and averaging. Assistance was
provided by University of Florida Extension Ornamental Horticulture Agents Gerri Cashion, Cathy Neal, Loretta
Hodyss, Michael Holsinger, DeArmand Hull, Linda Landrum, Roger Newton, Bill Schall, Uday Yadav, and Victor
Yingst. Special acknowledgement is given to Dr. J. Robert Strain, Professor Emeritus, who developed the
Nursery Business Analysis Program in its present form, and who retired in July, 1990. Any errors in the analyses
or in the interpretation of the information presented herein, however, are the sole responsibility of the author.







BUSINESS ANALYSIS OF WOODY ORNAMENTAL
CONTAINER AND FIELD NURSERIES IN FLORIDA, 1989
Alan Hodges'


INTRODUCTION
This report presents information on sales, costs,
returns and production efficiency for 49 wholesale
woody ornamental nurseries in Florida for 1989.
These results are part of the University of Florida's
ongoing Nursery Business Analysis Program. This
information is intended for:
1) Nursery managers--to use physical and
economic measures for evaluating the efficiency of
individual nurseries and for making more informed
management decisions;
2) Allied trades professionals--to estimate input
requirements and revenue potential for wholesale
ornamental nurseries;
3) Industry investors--to have guidelines for
average business performance;
4) Extension educators--to use for conducting
educational programs with nursery operators;
5) Researchers--to support research activities for
the ornamental horticulture industry.


PROCEDURES
The information presented in this report is based
on confidential production and accounting records
provided by nursery operators who participated in the
program voluntarily. This is not a statistically
representative sample of firms, but is believed to be
biased toward better-managed woody ornamental
firms. Nursery operators who provided data received
an analysis for their own operation, which contained
similar information as presented in this report.

Data were collected for the 1989 fiscal year. In
most cases this was for the calendar year January to
December 1989. However, in a few cases data for
fiscal years ending after July 1, 1988, and before July
1, 1990, were included as 1989 data.

The Nursery Business Analysis is a economic-
oriented appraisal rather than a financial or tax
accounting appraisal. As such, it attempts to provide
an economic valuation for all resources and
production activities, whether or not they have an
actual monetary value for any particular firm. For
example, in firms that did not report a salary for its


managerss, an estimate of their time value was made
based on the their experience and other opportunities
for income in order to provide an economic valuation
for management, which is a critical input for any
business. Similarly, an interest charge for the total
owned capital investment was included as a non-cash
cost, calculated at the rate of 12 percent per year,
regardless of any interest expense paid by individual
firms. This provided a comparable basis for interest
costs across all firms.

Capital investments and leased capital assets were
an important part of the analysis. In the case of sole
proprietorships and closely held corporations (sub-
chapter S, or "family" businesses), investments in land
were valued at the original purchase price;
investments in buildings, improvements, machinery,
and equipment reflected their depreciated book value;
and debt held by family members was not included
among liabilities. In the case of regular corporations,
land, buildings, and equipment were evaluated at
current market value. The majority of firms were of
the former type, so investments in land did not
represent their current value, especially for older
firms, because of the rapid increase in Florida land
values.

Plant inventory was a critical element of the
wholesale nursery business. Changes in plant
inventory levels must be accounted for in conjunction
with annual sales in order to assess total production
of a firm. In this analysis, emphasis is placed upon
"value of production," defined as sales plus change in
plant inventory value, as a measure of productive
capacity. Plant inventory was also included among
owned capital investments as an average of year
beginning and year end values reflecting wholesale
prices, discounted in proportion to the percentage of
completion. In the absence of detailed inventory
records, plant inventory was evaluated at 50 to 75
percent of the finished wholesale value for all plants
in production at the beginning and end of the year.

Records were separately compiled and analyzed
for two different types of woody ornamental nursery
production systems: container and field production.
Container woody ornamental firms grow plants in
nursery containers ("pots") ranging in size from 1 to


1 Economic Analyst, IFAS, Food & Resource Economics Dept., University of Florida, Gainesville.







2


100 gallons or more, while field producers grew
generally larger plants in the ground, which were dug
and sold with a football wrapping. In recent years, a
hybrid production system, known as "grow-bags" or in-
ground containers has been developed to confine the
roots of plants growing in the field. Several of the
field nursery firms sampled for this report used this
type of production system extensively. In the case of
participating firms that provided separate records for
container and field divisions within their company,
allocation of overhead expenses, labor hours, and
financial account balances was generally based upon
the share of total company sales for each division, in
the absense of detailed records.

In previous years, results for these two nursery
types were reported in separate publications.
However, results are here consolidated so that
comparisons may be made. Average size of businesses
differed substantially between the two groups
sampled, but these differences probably reflect a great
deal of sampling error, and should not be taken as
any indication of average firm size.

In addition to the field and container groupings,
data were analyzed for subgroups of large and small
firms, and highly profitable firms, so that an
appreciation can be gained for effects of scale, and for
the elements of successful businesses. Small firms
were defined as having annual sales less than $200
thousand, and large firms as having annual sales
greater than $500 thousand. Highly profitable firms
had rates of return on capital investments greater
than 15%.

The results reported are weighted averages for
firms in each group. In other words, basic
information on sales, expenses, etc. was first averaged,
then analyzed as though for a single "average" firm.
This procedure provided results that were weighted
for the overall size of the firms involved. Also, for
some measures, results are given for the "highest
rates" and "lowest rates," representing averages for
the highest or lowest third of firms for that particular
measure.

Further information on definitions and calculations
are given in the Appendices, along with detailed
results in the Appendix Tables.

RESULTS
Complete and usable records were received from
49 woody ornamental firms: 38 container growers, and


Container and Field Nurseries in Florida, 1989

each grouping of large, small, and most profitable
firms are indicated in Table 1 along with basic
information on business volume and scale of
production operations. Four firms contributed records
for both container and field nurseries.

Value of Production

Annual sales
Figures reported here represent only plants
produced by the participating nursery firms. Sales of
plants purchased for immediate resale, or "brokered,"
were deducted from total sales to give net value of
"own" plant sales, which averaged $412.0 thousand for
container firms, and $341.9 thousand for field
nurseries (Table 1). The largest 13 container firms
had sales averaging $796.1 thousand, and the largest
3 field firms had average sales of $718.5 thousand.
The smallest 12 container firms had sales averaging
$94.1 thousand, and the smallest 4 field firms had
average sales of $88.9 thousand.

Plant Inventory Change
Changes in plant inventory levels were accounted
for to evaluate total production, in addition to sales.
Table 1 shows average plant inventory changes for
container and field woody ornamental firms. Average
plant inventory change was positive for all field firms
($126.4 thousand), meaning that total value of
production exceeded annual sales. Container firms
had a decrease in average plant inventory (-$17.8
thousand), thus giving a total value of production less
than annual sales. Both large and small field firms
and small container nurseries had increased inventory,
but large container firms had decreased inventory.


11 field growers. Numbers of firms represented for







Container and Field Nurseries in Florida, 1989


Table 1-Value of Production and Productive Resources,
Woody Ornamental Container and Field Nurseries, 1989.


-------------Container Nurseries---------- ------------Field Nurseries------------
Units All Largest Smallest Most Profit All Largest Smallest Most Profit
38 Firms 13 Firms 12 Firms 9 Firms 11 Firms 3 Firms 4 Firms 4 Firms
Value of own plants sold $ 411,974 796,105 94,146 337,398 341,854 718,523 88,914 576,278
Change in inventory value. $ (17,815) (91,071) 42,008 72,933 126,377 366,667 67,052 373,081
Total value of production. $ 394,159 705,034 136,154 410,331 468,230 1,085,189 155,965 949,358
Total growing area . . sq.ft 430,317 850,196 96,243 343,474 2,088,673 1,774,344 699,788 1,733,551
Full-time equiv. persons number 13.69 25.64 5.84 9.42 9.21 13.45 5.45 13.57
Total Owned Capital. ... $ 761,125 1,407,033 285,269 395,246 1,142,333 1,596,143 625,696 1,519,356
Total Leased Capital . $ 77,755 114,015 23,000 83,444 426,518 1,348,900 53,750 1,011,675
Total Managed Capital. .. $ 838,880 1,521,048 308,269 478,691 1,568,852 2,945,043 679,446 2,531,031




Monthly sales Do lIars Cthousands)
Figure 1 shows that the $5
pattern of average monthly
sales for both container and
$40 nreis flwd -- ----- ---------- -- ---------------.....
field nurseries followed o o
similar trends: peak sales
during the early spring .. ...
months (March through May
for container; January
through March for field),
follow ed by depressed $20................... ...........................................................................................................................
followed by depressed
summertime sales, then a
secondary smaller sales peak
in Novenber or December. $10...............................................
Generally, container
nurseries had more seasonal
sales than did field nurseries. $o t
sales than did field nurseries. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales for the peak three
month spring period Month
accounted for 30.3% and Container Field
27.8 of the year's total sales Figure 1--Monthly sales for all container and field nursery firms sampled in
for container and field
r Florida, 1989. Monthly figures include brokered sales.
for the highest month were
1.53 times greater than the lowest month for container firms and 1.46 times greater for field nurseries. Monthly
sales for large and small firms followed nearly the same patterns as their respective overall averages, except for
small field nurseries, which had a later spring sales peak, (April through June), and somewhat greater seasonality,
as indicated by 35.9% of annual sales during this period. The finding of greater seasonality for container
nurseries overall is counter to expectations that container production allows more flexible marketing because no
conditioning period is required before shipment, as with digging field-grown plants.







4


Productive Resources:
Land, Labor, and Capital

Land Resources
Space available for growing plants was measured
as average square footage of net usable growing area
at the beginning and end of the year. Net usable
growing area included only space within growing beds
and field; aisles, driveways, or other service areas
were excluded. As shown in Table 1, growing space
averaged 430.3 thousand square feet (9.9 acres) for
container firms, and 2.089 million square feet (48.0
acres) for field firms. Large container firms had 19.5
acres. The largest 3 field nurseries actually had less
growing area (40.7 acres) than the overall average,
indicating the wide range of space use intensity. The
smallest container firms had 2.2 acres of growing area,
and the smallest field nurseries 16.1 acres.

Labor Resources
Labor was measured in terms of full-time
equivalent persons, including office and management
personnel. In most cases, this was calculated by
dividing total labor hours by 2,080 hours per man-year
(52 weeks at 40 hours per week). Average number of
full-time equivalent (FTE) persons was 13.7 for
container nurseries, and 9.2 for field firms (Table 1).
The largest container firms employed 25.6 FTE and
largest field firms 13.5 FTE, while the smallest
container firms employed 5.8 FTE and smallest field
nurseried 5.5 FTE.

Capital Resources
All forms of owned and leased assets, including
land, buildings, equipment, plant inventory, accounts
receivable, and cash on hand represent capital
resources for nursery production. Owned capital in
buildings, improvements, and equipment were
assessed at current value: original cost less
accumulated depreciation. Total capital owned
averaged $761.1 thousand for container nurseries and
$1.142 million for field firms (Table 1). The largest
container firms had average owned capital of $1.407
million, and largest field firms had $1.596 million.
The smallest container firms had average owned
capital of $285.3 thousand and small field firms $625.7
thousand. Additional capital managed in the form of
leased assets averaged $77.8 thousand for container
firms and $426.5 thousand for field nurseries, giving
total capital managed of $837.8 thousand, and $1.569
million, respectively.


Container and Field Nurseries in Florida, 1989

Distribution of Managed Capital--among land,
buildings, equipment and other assets, is indicated in
Figures 2a and 2b, for all container and field firms,
respectively (see also Appendix Tables 4a and 4b).

Accounts Rec. 4.8%
Supplies/Cash 3.7


ild/Install, 3.8%

Equipment 3.7%






Land 20.8%


Figure 2a--Distribution of managed capital, container
nurseries, 1989.


Figure 2b--Distribution of managed capital, field
nurseries, 1989.
Growing plants represented the largest share of
capital managed in both container firms (63.3%) and
field firms (57.6%). Land was second in importance
as a share of total capital managed with 20.8% for
container firms and 34.8% for field nurseries.
Surprisingly, machinery and equipment represented a
greater share for container firms (3.7%) than for field
nurseries (2.3%). Accounts receivable represented
4.8% and 2.9% of managed capital, respectively, and
buildings and installations 3.8% and 1.1%. Supplies
and cash on hand together comprised 3.7% of


Plants 63.3%


Plants 57.5%


But Id~rsn" 11%
u~pp J"T s/ CMh 1 .4%
rzqurpmant 2.3%
Account Rec. 2.9%






Lard 34.68







Container and Field Nurseries in Florida, 1989

managed capital for container nurseries, and 1.4% for
field firms.

Resource Use Indicators

Space Use
Space productivity was measured by value of
production (annual sales plus inventory change) per
square foot of growing space. As shown in Figure 3,
value of production per square foot for container
firms ($0.92) was more than 4 times greater than for
field firms ($0.22) because of the more intensive type
of production system. Large container firms had
below-average space productivity ($0.83/sq ft), while
smaller firms were substantially above average
($1.41/sq ft). In contrast, large field firms had above-
average production per square foot ($0.61), and small
firms had production per square foot equal to the
average ($0.22/sq ft). The third of sampled firms with
the highest space productivities averaged $2.12 per
square foot for container firms and $0.55 per sq ft for
field nurseries.


Contain r,
$0.49
$1.19


$0.81
SO.22
$0.55

5.00.051.50 2.00 2.

Dol lars Per Square Foot


Pa iwt rew.
lS Moswwt rat
[in lmt prof itubl


Figure 3--Space productivity. Value of production
(sales plus inventory change) per square foot of
growing space.
The most profitable third of firms had space
productivities of $1.19 per square foot for container
nurseries and $0.55 per square foot for field firms.
This was the same as the highest rates for field
nurseries, and well above average for container
growers, indicating the importance of high space
productivity for profitable nursery operations. Low
space productivity may result from several causes:
overmature plants, high vacant space, slow plant
growth, and disease and quality problems that reduce
yields of salable plants. In addition, nursery layout


5


and plant fertilization and growing other techniques
can affect production time and space requirements.

Space productivity on the basis of growing acreage
averaged $39.9 thousand per acre for container firms,
and $9.8 thousand per acre for field nurseries
(Appendix Tables 2a and 2b).

Plant inventory turnover is another indicator of
space productivity. Inventory turnover expresses the
rate at which inventory is replaced on an ongoing
basis, and is calculated as annual sales divided by
average inventory value. Plant inventory turnover
averaged 0.775, or 77.5 percent, for container firms,
and 0.378, or 37.8 percent, for field firms (Appendix
Tables 4a and 4b). In other words, the number of
"crops" per year averaged about three-quarters for
container firms and one-third for field firms. This is
another indication of the greater space production
intensity of container production systems. However,
the pattern of results for large vs. small and most
profitable firms differs from those for production per
square foot because the inventory turnover measure
is complicated by inventory values. Large firms in
both groups had higher inventory turnover rates (0.80
for container, 0.56 for field) and small firms had
lower rates (0.64 and 0.21, respectively). Highly
profitable container firms had turnover rates (1.60)
nearly as great as the highest rates (1.71), but highly
profitable field firms had turnover rates (0.49) closer
to the overall average. This is due to South Florida
field nurseries producing highly valuable but relatively
slow-growing crops such as palms.

Labor Use
Labor productivity was measured in terms of value
of production per full-time equivalent worker (FTE,
2080 hrs/year). Figure 4 shows that labor productivity
was generally higher for field nurseries $50.7
thousand/FTE) than for container firms ($28.8
thousand/FTE). For container nurseries, both large
and small firms had below average labor productivity
($27.5 and $23.3 thousand/FTE). For field nurseries,
large firms had significantly above average labor
productivity ($80.7 thousand/FTE) and small firms
were well below average ($28.6 thousand/FTE).
Highest rates of labor productivity for field firms
($105.1 thousand/FTE) were more than twice as great
as for container firms ($48.7 thousand/FTE), but
lowest rates were nearly the same ($18.9 thousand
and $14.1 thousand per FTE, respectively).

Highly profitable firms of both types had labor


productivities approximately 50% above average








6


a P eT


Do Iol lars Per Worker (FTE) (Thousai
$120
$105


$81




$44
$40.... .... ....8.....

S29s28



so
14Cont ner Field
Container Field


nds)






All firm


HiQhet rates
L LrGWt rate
In Mmt prof table


Figure 4--Labor productivity. Value of production
per fulltime equivalent person (FTE, 2,080 man-hours
per year).




($43.6 thousand/FTE for container, $70.0
thousand/FTE for field), indicating the importance of
labor productivity for profitable operations. Variation
in labor productivity can result from differences in
investment in labor saving capital items, labor
management practices, or other practices affecting
crop turnover.

Labor intensity was evaluated in terms of
production area per person, or FTE persons per acre
of growing area. Total growing space per full-time
equivalent averaged 31.4 thousand square feet (0.72
acres) for container nurseries, 226.8 thousand square
feet (5.2 acres) for field firms (Appendix Tables 3a
and 3b). Expressed another way, Figure 5 shows the
number of FTE persons per acre of growing space
averaged 1.39 for container firms and 0.19 for field
firms. Large container firms had slightly lower labor
intensity (1.31 FTE/A), but small container firms had
much higher labor intensity (2.64 FTE/A). Both large
and small field nursery firms had above average labor
intensity (0.33 and 0.34 FTE/A, respectively). Highly
profitable container firms had slightly below average
labor intensity (1.19 FTE/A), but profitable field firms
were well above average (.34 FTE/A).


Container and Field Nurseries in Florida, 1989



Persons CFTE) Per- Acre Growlng Area
3.00




2. .... ........................................
.3.450


1e2.5(met



Most profitable





0.00
Container Field





Capital Use
Capital Turnover is an indicator analogous to
inventory turnover, except that it expresses the ratio
of annual sales to value of owned capital. Results for
this measure generally paralleled those for inventory
turnover. As shown in Figure 6, capital turnover
averaged 0.54 for container nurseries, and 0.30 for
field firms. Thus, container firms had annual sales
equal to about one half of capital owned, and field
firms about one-third of capital owned. Large
container firms had slightly above average capital
turnover rates (0.57), and large field nurseries had
significantly above average turnover (0.45). Small
firms of both types had turnover rates (0.33 and 0.14)
nearly as low as the lowest rates (0.30 and 0.17).
Most profitable firms had inventory turnover rates

(0.93 and 0.43).

In general, high capital turnover is desirable,
indicating greater sales per dollar of investment.
Problems that lower turnover rate include any of
those already mentioned that lower production rate,
and therefore lower sales volume for a given nursery
investment. Low capital turnover is particularly
common in new firms and in rapidly expanding firms.
Excessive investments in land, labor-saving machinery
and equipment also tend to lower captial turnover.

Capital Managed Per Person is an indicator for
balancing of capital and labor resources, calculated as


total capital managed divided by employment (FTE).
As shown in Figure 7, capital managed per FTE was
generally higher for field firms ($170.4 thousand/FTE)







Container and Field Nurseries in Florida, 1989

Annual Sales/Capital Owned
1201






S .................. a.........................................Ilo.......st
C W Hlgwet rate
.. .. 4 % 43 W owt raoe
4.. .. .1......... .... L ot l tbl


20
0%n 3


I -----
Figure 6--Capital turnover. Ratio of annual sales to
owned capital.



than for container nurseries ($61.3 thousand/FTE).
Large container firms averaged $59.3 thousand in
capital managed per person, while small firms
averaged $52.8 thousand per FTE. Large field
nurseries had above average capital managed per
person ($218.9 thousand/FTE), and small firms were
below average ($124.6 thousand/FTE). Highest rates
averaged $107.1 thousand per person for container
firms, and $356.3 thousand per person for field
nurseries. Lowest rates averaged $28.7 thousand and
$86.4 thousand per person, respectively. The most
profitable container firms had below average capital
managed per person ($50.8 thousand), but most of
the profitable field firms were above average ($186.5
thousand).

Capital Managed Per Acre is another indicator for
balancing productive resources between capital and
land. As shown in Figure 8, capital managed per acre
of growing area was generally higher for container
nurseries ($84.9 thousand/A), than for field firms
($32.7 thousand/A). Large container firms averaged
$77.9 thousand per acre, and large field nurseries
more than twice the average, $72.3 thousand per acre.
Small firms had above average capital managed per
acre for both container nurseries ($139.5 thousand)
and field nurseries ($42.3 thousand/A). Highest rates
of capital managed per acre were $141.1 thousand for
container nurseries and $83.2 thousand for field firms.
Lowest rates averaged $59.9 thousand per acre for
container firms, and $15.3 thousand per acre for field
firms. Most profitable container firms had capital
managed per acre ($60.7 thousand) near the lowest


Figure 7--Capital managed per worker (FTE).
Calculated as capital managed (owned plus leased)
divided by fulltime equivalent employees.


rates, while most profitable field firms had nearly
double the average capital managed per acre ($63.6
thousand/A).


Field


Contal nr







8


Costs of Production
The significance of managing production costs has
become heightened by increased competition in the
woody ornamental industry, with falling prices for
products forcing producers to find new ways to cut
costs. Many managers do not clearly understand that
costs include not only cash outlays, but also non-cash
costs and allowances such as depreciation and
interest, which must be covered for the business to
remain viable over the long run.

Costs by Expense Category
Costs were grouped into the following categories:
management's compensation, wages and salaries,
production supplies, other production costs,
administrative and overhead, and non-cash costs.
Table 2 summarizes dollar amounts for each cost
category, and Figures 9a and 9b give percentage
shares of the total for each category in order to
compare costs among groups differing in average size.
Further details on all itemized expenses are given in
Appendix Tables 5a and 5b.

Management's Compensation or Time Value--
averaged $43.8 thousand for container nurseries, and
$59.1 thousand for field firms (Table 2). These
amounts represented 8.9% and 12.4% of total costs,
respectively. Large container firms compensated
management an average of $75.5 thousand (8.0%),
and large field firms $130.7 thousand (15.4%).
Average compensation to management in small firms
was $24.1 thousand (15.4%) for container nurseries,
and $27.1 thousand (12.9%) for field firms.

Employees' wages and payroll costs is one of the
largest cost categories for the woody ornamental
industry. In addition to wages and salaries, this
category included benefits, social security, workman's
compensation insurance, health insurance, bonuses,
and other payroll costs. Average labor expenses were
32.8% of total costs ($162.5 thousand) for container
nurseries and 26.0% ($123.9 thousand) for field firms
(Table 2). Large container firms spent a much greater
percentage of total costs on employees (34.8%) than
did large field firms (22.8%). Small firms of both
types spent a smaller share of expenses on employees
(24.8% and 20.8%, respectively) because a lesser
share of work was performed by hired labor.

Production supplies--included expenses for plants
and seeds, containers, peat and soil, fertilizer and
lime, pesticides and chemicals, and other production


Container and Field Nurseries in Florida, 1989

total costs ($106.3 thousand) for container firms, and
17.6% ($84.0 thousand) for field firms. Large
container nurseries spent 21.8% ($205.8 thousand) of
total costs on supplies and large field firms spent
23.7% ($200.7 thousand). Small nurseries spent a
smaller share of total expenses on supplies: 18.6%
($29.1 thousand) for container firms and 14.4% ($30.1
thousand) for field nurseries. The largest single item
within-this category was plants and seeds, representing
6.7% of total costs for container firms and 8.6% for
field nurseries.

Other production costs--were facility
repairs/maintenance and equipment operating costs.
These costs averaged 4.6% ($22.6 thousand) of total
costs for container nurseries and 4.9% ($23.3
thousand) for field firms. Large container firms spent
4.4% ($41.3 thousand) and small nurseries spent 2.5%
($3.9 thousand). Large and small field firms spent
5.6% ($47.7 thousand) and 3.4% ($7.0 thousand),
respectively, of total costs on this category.

Administrative and overhead are those expenses
that usually cannot be assigned to any particular
production activity, yet must be covered in order to
remain in business. This category included travel,
property insurance, telephone, electric power,
advertising, property taxes, rent, and other cash
expenses. Administrative and overhead expenses
averaged 9.9% ($49.1 thousand) of total costs for
container nurseries and 7.3% ($34.9 thousand) for
field firms. Larger firms had a slightly lower share of
overhead costs, with 9.3% ($88.0 thousand) for
container firms and 6.7% ($57.0 thousand) for field
firms, indicating some economy of scale. Small firms
had above average overhead costs: 11.6% ($18.2
thousand) for container, 9.6% ($50.3 thousand) for
field nurseries.


supplies. Expenses for supplies represented 21.5% of








Container and Field Nurseries in Florida, 1989


Table 2--Costs of Production, woody ornamental container and field nurseries, 1989.


-------------Container Nurseries----------
Units ALL Largest Smallest Most Profit
38 Firms 13 Firms 12 Firms 9 Firms


Management's Compensation.


------------Field Nurseries------------
ALL Largest Smallest Most Profit
11 Firms 3 Firms 4 Firms 4 Firms


$ 43,820 75,532 24,081 32,083 59,055 130,697 27,147 110,023
% 8.9% 8.0% 15.4% 9.4% 12.4% 15.4% 12.9% 14.7%


Labor . . ..... $ 162,522 328,077
% 32.8% 34.8%

Supplies ...... .... 106,259 205,754
% 21.5% 21.8%

Other Production Costs. .. $ 22,598 41,332
% 4.6% 4.4%


38,794
24.8%


109,593
32.2%


123,943 193,590 43,575 175,595
26.0% 22.8% 20.8% 23.5%


29,091 89,317 83,982 200,720 30,149 166,964
18.6% 26.2% 17.6% 23.7% 14.4% 22.3%

3,913 13,737 23,295 47,709 7,042 37,708
2.5% 4.0% 4.9% 5.6% 3.4% 5.0%


Administrative & Overhead .


Total Cash Costs . . .


Non-Cash Costs . . .


Total All Costs . . .


$
%
$
%

$
%

$


49,113
9.9%

384,313
77.6%


88,019
9.3%

738,714
78.4%


110,689 203,763
22.4% 21.6%

495,002 942,477
100.0% 100.0%


18,185
11.6%

114,064
72.9%

42,375
27.1%

156,439
100.0%


39,348
11.5%

284,078
83.4%

56,670
16.6%

340,748
100.0%


34,867
7.3%

325,142
68.2%


57,021
6.7%

629,737
74.2%


20,041
9.6%

127,953
61.0%


151,310 218,954 81,772
31.8% 25.8% 39.0%

476,452 848,691 209,725
100.0% 100.0% 100.0%


Figure 9a--Distribution of costs of production,
container nurseries, 1989.


Figure 9b--Distribution of costs of production, field
nurseries, 1989.


50,311
6.7%

540,600
72.3%

207,486
27.7%

748,087
100.0%


Supp II es
21.5%


Depr ec i at i on
3.9%
Epmt/Bldgs.
4.6%

Interest v~Management
18.5% 8.9%
Acknin. & overhead
9.9%


Labor
26.0%








Supp Iles
17.6%


A Deprec at ion
3.0%
Epmt/ BIdgs .
4.9%
Admin. & overhead
7.3%

Management
12.4%


~~~~~~~~~~~~~~~~~~~~i~~i~~i~~~~~~~~~~~~~


9








10


Total cash costs--included all categories discussed
above. Total cash costs averaged $384.3 thousand for
container nurseries and $325.1 thousand for field
firms. These amounts represented 77.6% and 68.2%
of total costs, respectively. Large firms had a slightly
greater percentage of cash costs to total costs: 78.4%
for container, 74.2% for field. Small nurseries had a
lower share of total cash costs: 72.9% for container,
61.0% for field

Non-cash costs--included depreciation on fixed
assets (buildings, equipment), decreases in supply
inventories, and an interest charge on capital owned
to reflect the opportunity cost of assets used. These
costs averaged $110.7 thousand for container
nurseries and $151.3 thousand for field firms. The
largest share of these costs was for interest: 18.5% of
total costs for container firms and 28.8% for field
nurseries. Depreciation represented 3.9% and 3.0%
of total costs, respectively.


Cost Efficiency

Cost efficiency can be assessed in terms of costs
per unit area of production space (per square foot),
or costs per unit of revenue (sales and production).


Cost Per Square Foot of Growing Space
Square foot costs are a useful measure for
estimating individual plant growing costs or comparing
cost efficiency of different types of production
systems. Total costs per square foot averaged $1.15
for container nurseries and $0.23 for field firms
(Figure 10). Large container firms had slightly below
average costs per square foot ($1.11) and small firms
were substantially above average ($1.63). Among
field firms, both large and small had above average
costs per square foot ($0.48, and $0.30, respectively).
Highest costs per square foot averaged $2.26 for
container nurseries and $0.72 for field firms, while
lowest costs averaged $0.81 and $0.12, respectively.
The most profitable firms had total costs per square
foot of $0.99 for container nurseries, and $0.43 for
field firms.


Costs Per Dollar Value of Production
Cost per unit of revenue is a direct measure of
long-term profitability. As shown in Figure 11, total
costs averaged $1.26 per dollar value of production,
or 126% of revenue for the container nurseries, and
102% for field firms. Thus, average total costs for
both groups exceeded the breakeven cost level of


$1.00 per dollar value of production. However, this


Container and Field Nurseries in Florida, 1989



Do lars Per Square Foot
2.5

2.0.


1..
5 ... l teat
S .los. t
S-..... ..........................................ra



G.2.
0.0
Cota r F-'/~/""""l l~"-'ield~Br-


Figure 10--Costs per square foot of total growing.


deficit did not really represent a "loss," but merely a
failure to meet the interest cost allowance for a 12
percent return on capital investment. Large and small
container firms, and small field firms were also above
the break-even cost level (Figure 11). Large field
nurseries were below the break-even level with total
costs 78% of value of production. The most
profitable firms had total costs averaging 83% of total
value of production for container firms, and 79% for
field nurseries. Further details on these results are
given in Appendix Tables 6a and 6b.


Costs Per Dol lar or Production
150
1349 1341







5 .. .. ...........


AlI Largo a I I R-of .
Conta ner


IIo ntrm
nca


m Wvldpm.

Lo Lbor


All Large Sl II P-of.
Field


Figure 11--Cost per dollar value of production (sales
plus inventory change).


Gontalnw,


Field







Container and Field Nurseries in Florida, 1989

Cash Costs Per Dollar of Sales
This is a short-term measure of profitability and
financial solvency relating only current cash expenses
with current income (sales). Cash costs averaged
93% of sales for container firms and 95% for field
firms. Large firms had cash costs of 93% and 88%,
respectively. Small firms of both types had the
serious problem of cash costs exceeding sales by 21%
for container nurseries and 44% for field firms. This
means that these firms were not able to meet current
operating expenses from cashflow generated by sales.
Most profitable firms had cash costs 84% and 94% of
sales, respectively.

Income Summary
In Table 3, income and costs are reorganized to
derive net income in a manner more like traditional
accounting practices, without the allowance for
interest cost on capital.

Total gain is the total value of plant sales, changes
in plant and supply inventory values, and
miscellaneous income. In addition to the plant sales
and inventory growth revenue discussed previously,
miscellaneous income averaging $6.3 thousand for
container firms and $8.3 thousand for field firms
produced a total gain of $401.9 thousand and $477.8
thousand, respectively (Table 3).

Cost deductions are the same as total costs
discussed previously, except for omission of the
operator's salary and allowance for interest on capital,
so that these costs can be explicitly recognized. Total
deductions averaged $359.8 thousand for container
nurseries and $280.3 thousand for field firms. Total
deductions are subtracted from total gain to give net
nursery income.

Net nursery income is the total annual return for
the firm, before income taxes, compensation to
management and interest on capital. Average net
nursery income was $42.1 thousand for container
nurseries and $197.5 thousand for field firms (Table
3). Large container firms had below average net
incomes of $26.3 thousand and large field firms had
$579.8 thousand. Small firms had average net
incomes of $38.5 thousand for container nurseries and
$49.8 thousand for field nurseries. The most
profitable firms had net incomes of $151.2 thousand
and $509.4 thousand, respectively.


11


Return to Capital

Net nursery income may be apportioned between
returns to management and returns on capital
investment in order to evaluate the economic
efficiency of these resources. Return to capital is the
part of net nursery income attributable to the capital
investment, calculated by subtracting the
compensation to management from net nursery
income. Return to capital averaged $138.5 thousand
for field nurseries. Return to capital was negative for
container nurseries overall (-$1.8 thousand) and large
container firms (-$49.2 thousand). This negative
return to capital simply means that all net income was
taken by management rather than paid as dividends to
stockholders or kept as retained earnings. Return to
capital was $449.1 thousand for large.field firms, $22.7
thousand for small field nurseries, and $14.4 thousand
for small container firms.

Net profit margin is the ratio between return to
capital and total gain. As shown in Figure 12, field
firms had a profit margin of 29.0%. Since container
firms had a negative return to capital, net profit
margin was also negative (0.4%) The most profitable
firms had net profit margins of 28.9% for container
nurseries and 41.4% for field firms. Thus, field
nurseries showed greater average profit not only in
absolute dollars but as a share of business volume.

Return to Capital/Total Gain (percent)
60X
Am1 41 41%




0 .......................
-2M-

-40% ... ................ .Lowest rates
m ntt profItable

--a
-79K
-10T '---------------'---- -
Contarnor South Florida


Figure 12--Net profit margin. Ratio
capital and to total gain.


of return to








Container and Field Nurseries in Florida, 1989


Table 3-Income Summary, container and field woody ornamental nurseries, 1989.


.------------Container Nurseries---------- ------------Field Nurseries------------
Units ALL Largest Smallest Most Profit ALL Largest Smallest Most Profit
38 Firms 13 Firms 12 Firms 9 Firms 11 Firms 3 Firms 4 Firms 4 Firms

Total Gain . . ... .. $ 401,893 724,442 136,575 412,435 477,823 1,106,228 157,332 965,137


Total Deductions .. ...

Net Nursery Income ..
Management's Compensation.
Return to Capital .. ..


$ (359,847) (698,102)

$ 42,047 26,341
$ 43,820 75,532

$ (1,774) (49,191)
% -0.23 -3.50


(98,126) (261,236)

38,450 151,200
24,081 32,083
14,368 119,117
5.04 30.14


(280,317) (526,456) (107,495) (455,741)

197,506 579,772 49,837 509,396
59,055 130,697 27,147 110,023
138,451 449,075 22,690 399,373
12.12 28.13 3.63 26.29


Rate of return on capital or "return on investment"
is a common indicator for evaluating alternative
investments, comparable to annualized yields on
stocks, bonds, or savings deposits. It is calculated by
dividing return to capital by the total current value of
capital owned. Rate of return on capital averaged
minus 0.23 percent for container nurseries and 12.12
percent for field nurseries (Figure 13). Large
container firms had an average rate of return on
capital of minus 3.50%, while small firms averaged
5.04%. Among field nurseries, large firms had a
28.13% rate of return on capital, and small firms
3.63%. The most profitable firms had rates of return
averaging 30.14% for container nurseries and 26.29%
for field firms.


Return to Capital/Capital Owned C%)
40. .

30%;
a .......................... ..... ......... 2 .... ..............


E AlI firm-
-t Laro-t
am I Iot
Hf Hrght ratm
SLowvt rates
11I Uost prof-Itrile


.
.20% ""'.~.rrrr~r~~~r~r~rrr
-20%i


Field


Contalr


Figure 13--Rate of return to capital. Expresses ratio
of return to capital and owned capital (current value).



Financial Position

Assets and liabilities are depicted in Figure 14.
These data represent the mid-year financial situation
of the nurseries, derived as an average of the year-
beginning and year-end balance sheet figures.


10%


Do Ilars (thousands)
$1,4DO

$1,200 .................... .....

$1,000 .............................. .
AQt.f and L b f I.
e$80 -* < ..- : ..................... Current Aumes
Lono-Term Asets
$5r00 *l^^ C"" """""""uI8- e^ Current Liabrl.
SLong-Term Liab i.


$200 -



Conta nero Feld

Figure 14--Assets and Liabilities, container and field
nurseries in Florida, 1989.

Assets

Total assets were the same as capital owned,
discussed previously.

Current Assets consisted of cash on hand,
accounts receivable, and plant and supply inventories.
Total current assets averaged $602.1 thousand for
container nurseries and $970.2 thousand for field
firms. Cash on hand averaged $14.0 thousand and
$18.2 thousand, respectively. Accounts receivable
averaged $39.9 thousand for container nurseries and
$44.8 thousand for field nurseries. As a proportion of
annual sales, these amounts represented 10 percent
and 13 percent, respectivley. Supply inventories
averaged $16.4 thousand for container and $3.3
thousand for field firms.

Long term assets included owned capital
investments in fixed assets such as buildings,
machinery, and land. Current values of fixed assets
are the original cost less accumulated depreciation.


12


I


LWr


4%







Container and Field Nurseries in Florida, 1989

Original investment costs averaged $298.9 thousand
for container nurseries and $264.9 thousand for field
firms. Subtracting accumulated depreciation left
current values of long term assets of $159.0 thousand
and $172.2 thousand, respectively. Field nurseries
had less depleted fixed assets: as a portion of the
original investment, these current values represented
53 percent for container and 65 percent for field
firms.

Liabilities
Liabilities represented in the Nursery Business
Analysis did not include any debt to related parties in
closely held or "family" corporations, as these are
usually not true debts that must be repaid. Total
liabilities averaged $153.1 thousand for container
firms and $171.4 thousand for field nurseries.

Current Liabilities averaged $34.1 thousand for
container nurseries and $16.7 thousand for field firms.
The ratio of cash and accounts receivable to current
liabilities, known as the "quick ratio," is a standard
indicator of the ability to pay current operating
expenses. This measure averaged 1.58 for container
nurseries and 3.78 for field firms.

Long Term Liabilities, including notes payable and
mortgages, averaged $119.1 thousand for container
nurseries and $154.7 thousand for field nurseries.

Net Worth is the difference between total assets
and total liabilities, or the value of the owner's share
of the assets, as opposed to lenders' claims. Net
worth averaged $608.0 thousand for container
nurseries and $970.9 thousand for field firms.

Financial Leverage
Leverage expresses the ratio between total assets
and net worth. Higher values indicate a greater
potential for "multiplying" returns per dollar of net
worth, but also a greater financial risk. The leverage
ratio averaged 1.25 for container firms and 1.18 for
field firms (Figure 14). In other words, container
firms had a greater value of total assets per dollar of
net worth than did container firms. Large and small
container firms had the same leverage (1.27). Both
large and small field firms had slightly below-average
leverage (1.05 and 1.13, respectively). Generally,
leverage factors below 2.0 are considered to represent
a very safe financial position. There was no


indication of any relationship between financial risk
and profitability, as the most profitable firms of both
types had below-average leverage (1.13, and 1.06).


13


Figure 15--Leverage factor. Expresses ratio between
total assets and net worth. Higher values indicate
greater potential returns on net worth, but also
greater financial risk.

Return on Net Worth
The ultimate measure of profitability is expressed
in terms of returns per unit of net worth. This
measure takes into account the financial risk
embodied in the leverage factor. Leverage is
multiplied by rate of return to capital to yield the rate
of return on net worth. This is the same as derived
by simply dividing return to capital ($) by net worth.
Since leverage is always greater than or equal to one,
return on net worth is always greater than or equal to
the absolute value of rate of return on capital.
Return on net worth averaged minus 0.3 percent for
container firms and 14.3 percent for field nurseries.
Large firms had returns on net worth averaging minus
4.4% for container and 29.5% for field nurseries,
while small firms had 6.4% and 4.1%, respectively.
The most profitable firms had returns on net worth
averaging 34.0% for container and 27.8% for field
nurseries.
SUMMARY

Key Factors Affecting Profitability
Characteristics of the most profitable nurseries are
summarized in Table 4, by comparison to the overall
averages. Differences between groups are presented
as percentages reflecting the deviation of the most
profitable firms from the industry averages. Also,
qualitative descriptors of this relationship are given,
with deviations of 0% to 19% labeled as "normal,"
20% to 49% as "high" or "low," and 50% or greater as
"very high" or "very low."


Total Assets/Net Worth
2.0


1.5 1.3
, ................. ................................. ..
0.3
... E Lro,,t


ME met pr crlt bwi
0.5 -...



0.0


Field


Container







14


Profitable firms of both types had high or very
high space productivity (production/sq ft), labor
productivity (production/person), and inventory
turnover. Managed capital turnover was also high for
profitable container firms, but only normal for field
nurseries. Capital managed per person was normal for
both types; capital managed per acre was low for
container firms and very high for field firms.
Space/Labor intensity was normal for container
nurseries, but high for field firms, as indicated by low
growing area per person. Total costs per square foot
of growing space were normal for profitable container
nurseries and very high for field firms. Costs
per dollar value of production for profitable firms of
both types were low or very low for all categories
except supplies. Most significantly, labor costs were
34% and 23% below average, respectively. Overall
financial position of both types of profitable firms was
very secures, as indicated by high quick ratios and
ratios of total assets to total liabilities.

CONCLUDING COMMENTS
Nearly all indicators showed a decline in the
financial performance for both container and field
woody ornamental nurseries in 1989 since the
previous year. The decline was more serious for


Container and Field Nurseries in Florida, 1989

container nurseries since the average firm in 1989 had
a negative rate of return to capital. These results
probably reflect generally lower product price levels,
higher costs, and increased competition, rather than
a change in productivity or efficiency of resources in
the industry. However, lower returns to investments
will probably curtail growth in the industry, and
perhaps bring about some reduction in production
capacity, eventually reducing competition, balancing
supply and demand, and restoring profits to normal
levels.

Florida Nursery Business Analysis Program
The Florida Nursery Business Analysis Program
is a service of the University of Florida provided on
a strictly confidential basis, and is free of charge.
Besides Woody ornamental container and field
nurseries, other types of nurseries in the program
include foliage plant nurseries in Central and South
Florida, and flowering plant nurseries. Nursery
managers wishing to participate in the program may
contact the authors or an IFAS agent in a local county
extension office. Nursery operators who authorize a
commercial accounting firm to supply the data
required for the program can participate with a
minimum of effort on their part.








Container and Field Nurseries in Florida, 1989 15


Table 4--Summary of Key Indicators Affecting Profitability


--------------Container--------------- -------------Field------------
ALL Most Profit Deviation All Most Profit Deviation
38 firms 9 firms from average 11 firms 4 firms from average

Value of Production/Sq Ft Growing Space $0.92 $1.19 30% High $0.22 $0.55 144% Very High
Inventory Turnover . . . . 77.5% 160.0% 107% Very High 37.8% 48.8% 29% High

Value of Production per Person ..... .$28,794 $43,561 51% Very High $50,853 $69,970 38% High

Growing Area per Person (sq ft) . .. 31,435 36,464 16% Normal 226,844 127,767 -44% Low

Managed Capital Turnover . . . 49.1% 70.5% 44% High 21.8% 22.8% 4% Normal

Managed Capital Per Person ...... .$61,281 $50,819 -17% Normal $170,388 $186,544 9% Normal

Managed Capital Per Acre . . .$84,918 $60,708 -29% Low $32,719 $63,599 94% Very High
Total Costs/Sq Ft Growing Space . $1.15 $0.99 -14% Normal $0.23 $0.43 89% Very High
Costs/Dollar Value of Production
Labor ............... $0.52 $0.35 -34% Low $0.39 $0.30 -23% Low

Supplies. . . . . . . $0.27 $0.22 -19% Normal $0.18 $0.18 -2% Normal

Other Production Costs. . . ... $0.06 $0.03 -42% Low $0.05 $0.04 -20% Low

Administrative and Overhead . .. $0.12 $0.10 -23% Low $0.07 $0.05 -29% Low

Non-Cash Costs. . . . . . $0.28 $0.14 -51% Very Low $0.32 $0.22 -32% Low

Total . . . . . . $1.26 $0.83 -34% Low $1.02 $0.79 -23% Low

Cash Costs/Dollar Value of Sales . $0.93 $0.84 -10% Normal $0.95 $0.94 -1% Normal

Accounts Receivable/Sales. . . . 0.10 0.11 11% Normal 0.13 0.16 25% High

Quick Ratio. . . . . . . ... 1.58 4.75 200% Very High 3.78 9.87 161% Very High

Total Assets/Total Liabilities ..... 4.97 8.70 75% Very High 6.66 18.17 173% Very High

Qualitative Descriptors: very low, low, normal, high, very high.
Low and high descriptors represent deviations from industry average between 20% and 50%.
Very Low and Very High descriptors represent deviations from industry average greater than 50%.







Container and Field Nurseries in Florida, 1989


APPENDIX


DEFINITIONS
Value of Own Plants Sold: the value of total plant
sales minus cost of plants purchased for immediate
resale (brokered), giving net sales of nurser-produced
products.

Full-Time Equivalent Worker. the equivalent of
one person working 40 hours a week for 52 weeks a
year (2080 hours a year). The most common method
for obtaining the number of full-time employees for
this report was to divide the total annual payroll
hours for the nursery by 2080, then add the number
of family and management personnel not paid on an
hourly basis.

Capital Owned: the current value (cost less
accumulated depreciation) of land, buildings,
equipment, and other current assets. Related debt is
not deducted in this determination.

Capital Managed: the value of capital owned
(above) plus the market value of additional leased
land, buildings, or equipment.

Total Gain: the sum of plant sales, changes in
plant and supply inventories, and miscellaneous cash
income. It represents the total result of the year's
operations.

Net Nursery Income: the return for the time and
skills of management, and for the use of the capital
invested in the operation. It is calculated as total gain
less all cash costs, except management's
compensation, and all non-cash costs, except the
non-cash interest allowance on capital.

Return to Capital: is what the owned capital
earned, calculated as the portion of net nursery
income that is left after subtracting management's
compensation or time value.

Rate of Return On Capital: is the rate earned on
the capital invested, equivalent to quoted yields on
stocks, bonds, savings deposits. It is calculated as
return to capital divided by the value of owned
capital.


NOTES ON CALCULATIONS
Analysis of your own operation for comparison
with the findings of this report can be done with the
information in the Appendix Tables. Blank spaces
are provided for entry of your data. Make
calculations for your nursery data in Appendix Tables
2, 3, 4, and 5, according to the formulas shown on
each line which refer to Appendix Table 1.

The University of Florida also supports a
microcomputer program for making these
calculations. This program can be ordered from:

IFAS Software Support Office
Building 120, Room 203
University of Florida
Gainesville, FL 32611
tel. # (904) 392-7853

LIST OF APPENDIX TABLES

Container Woody Ornamental Nurseries
Appendix Table Page
la Size of business ................... 17
2a Space use indicators ................ .18
3a Labor use indicators ................ 18
4a Capital use indicators ............... .19
5a Costs by expense category ............ 20
6a Costs per dollar value of production ..... 21

Field Woody Ornamental Nurseries
Appendix Table Page
lb Size of business ................... 22
2b Space use indicators ................ 23
3b Labor use indicators ............... 23
4b Capital use indicators ............. .. 24
5b Costs by expense category ............ 25
6b Costs per dollar value of production ..... 26


16









Container and Field Nurseries in Florida, 1989


APPENDIX TABLES


Appendix Table la--Size of Business, Container Nurseries in Florida, 1989.


ALl Largest Smallest Most Profit Your
unit 38 Firms 13 Firms 12 Firms 9 Firms Nursery
--- -- -- -- --- -- --w - -- - -- --- -- -- -- --- -W MW- -- -- -- ---- --w -- -- ww-- --


A Value of own plants sold . . . . .$ 411,974
B Change in inventory value. . . . .$ (17,815)

C Total value of production. . . .. $ 394,159


D Space for propagating & finishing. . . .sq ft
E Space for stock plants ... . . .sq ft

F Total growing space ........... .sq ft
G acres

H Total nursery area . . . . .. ..acres


430,317
NA

430,317
9.88

6.37


I Full-time equivalent persons ..... .number 13.69


796,105
(91,071)

705,034

838,468
11,728

850,196
19.52

12.10

25.64


------------Capital Owned-------------
J Growing plants . . . . . .$
K Bldgs, improvements . . . . . . $
L Machinery & equipment. .... . . $
M Land . . .. . . . . . . $
N Supply inventory ...... . . . $
0 Accounts receivable . . . . $
P Cash on hand . . . . . . . . $

Q Total Owned Capital. .. . . . . .. $

------------Capital Leased------------
R Bldgs, improvements. . . . . . . $
S Machinery & equipment. ........... $
T Land . . . . . . . . . . $

U Total Leased Capital . . . . . . $


---Capital Managed (owned +
V Growing plants . . .
W Bldgs, improvements. .
X Machinery & equipment..
Y Land . . . . .
Z Supply inventory . .
AA Accounts receivable. .
AB Cash on hand . . .


Leased)----
. . . .
. . . .
. . .
. . .
. . . .
. . = .
. . . .


AC Total Capital Managed. . . . . .


531,682 995,355 147,473 210,833
29,602 48,676 14,721 11,793
29,549 56,515 7,574 18,530
99,875 168,891 99,458 85,942
16,489 32,816 2,499 3,807
39,904 79,679 9,706 36,258
14,024 25,102 3,836 28,083

761,125 1,407,033 285,269 395,246


2,079
1,105
74,571

77,755


531,682
31,681
30,654
174,446
16,489
39,904
14,024

838,880


0
538
113,477

114,015


995,355
48,676
57,054
282,368
32,816
79,679
25,102

1,521,048


0
0
23,000

23,000


147,473
14,721
7,574
122,458
2,499
9,706
3,836

308,269


8,333
1,111
74,000

83,444


210,833
20,127
19,641
159,942
3,807
36,258
28,083

478,691


Notes: Propagating/finishing space is for product for sale.
** Full-time equivalent person is 2080 hr/year.


17


94,146
42,008

136,154

87,168
9,075

96,243
2.21

1.38

5.84


337,398
72,933

410,331

343,474
NA

343,474
7.89

1.48

9.42









18 Container and Field Nurseries in Florida, 1989


Appendix Table 2a--Space Use Indicators, Container Nurseries in Florida, 1989.

All Largest Smallest Most Profit Your
unit 38 Firms 13 Firms 12 Firms 9 Firms Nursery


Sales/sq ft growing space . ; (Table 1A/1F)
Production/sq ft growing space. (Table 1C/1F)


Sales/sq ft prop. & fin. space. (Table
Value of prod./sq ft . . .(Table

Sales/acre growing area. .. ... (Table
Production/acre . . . ... (Table

Plant inventory turnover . . (Table

Average vacant growing space . . .
--percentage of growing space . . .

Total nursery area . . . . .
(incl. roads, parking, office, etc.)

Total growing space . . . . .
--percent of total nursery area (Table

Propagating & finishing space .. ...
--percent of total growing space (Table

Stock plant space . . . . . .
--percent of total growing space (Table


$
$


1A/1D) $
1C/1D) $

1A/1G) $
1C/1G) $

1A/1J) %

... .sq ft
. . %

.. .sq ft


... .sq ft
1F/1G) %

.. .sq ft
1D/1F) %

. sq ft
1E/1F) %


0.96
0.92

0.96
0.92

41,703
39,900

77.5

NA
NA

277,388


430,317
155.1

430,317
100.0

NA
NA


0.94
0.83

0.95
0.84

40,789
36,123

80.0

9,808
1.2

527,271


850,196
161.2

838,468
98.6

11,728
1.4


0.98
1.41

1.08
1.56

42,611
61,624

63.8

1,646
1.7

60,149


96,243
160.0

87,168
90.6

9,075
9.4


0.98
1.19

0.98
1.19

42,789
52,039

160.0

NA
NA

64,273


343,474
534.4

343,474
100.0

NA
NA


Appendix Table 3a--Labor Use Indicators, Container Nurseries in Florida, 1989.

All Largest Smallest Most Profit Your
unit 38 Firms 13 Firms 12 Firms 9 Firms Nursery


Plant sales per person* . . (Table 1A/1I) $ 30,095 31,055 16,121 35,819
Value of production per person* (Table 1C/1I) $ 28,794 27,502 23,315 43,561
Growing area per person*. . (Table 1F/11) sq ft 31,435 33,165 16,481 36,464
Persons per acre growing area (Table 1F/1G) number 1.39 1.31 2.64 1.19 __


* Full-time equivalent person (2080 hr/year)








Container and Field Nurseries in Florida, 1989 19


Appendix Table 4a--Capital Use Indicators, Container Nurseries in Florida, 1989.
ALL Largest Smallest Most Profit Your
unit 38 Firms 13 Firms 12 Firms 9 Firms Nursery

Owned capital turnover. . (Table 1A/1Q) % 54.1 56.6 33.0 85.4
Managed capital turnover. .(Table 1A/1AC) % 49.1 52.3 30.5 70.5

Capital owned/person* . . (Table 1Q/11) $ 55,601 54,886 48,849 41,960
Capital managed/person* . .(Table 1AC/1I) $ 61,281 59,334 52,788 50,819

---Managed Capital Per Person In---
Growing plants. ....... (Table 1V/1I) S 38,840 38,827 25,253 22,382
Bldgs, improvements ..... (Table 1W/11) $ 2,314 1,899 2,521 2,137
Machinery & equipment . . (Table 1X/1I) $ 2,239 2,226 1,297 2,085
Land. ............ (Table 1Y/1I) $ 12,743 11,015 20,970 16,980

Capital owned/acre. ...... (Table 1Q/1G) $ 77,047 72,090 129,114 50,126
Capital managed/acre. ..... .(Table 1AC/1G) $ 84,918 77,931 139,524 60,708

---Managed Capital Per Acre In---
Growing plants. ....... (Table 1V/1G) $ 53,821 50,997 66,747 26,738
Bldgs, improvements .... .(Table 1W/1G) $ 3,207 2,494 6,663 2,553
Machinery & equipment .... (Table 1X/1G) $ 3,103 2,923 3,428 2,491
Land. ............ (Table 1Y/1G) $ 17,659 14,467 55,425 20,284

---Distribution of Managed Capital---
in growing plants ..... .(Table 1V/1AC) % 63.4 65.4 47.8 44.0
in buildings & wells. .. .(Table 1W/1AC) % 3.8 3.2 4.8 4.2
in machinery & equipment. (Table 1X/1AC) % 3.7 3.8 2.5 4.1
in land .......... .(Table 1Y/1AC) % 20.8 18.6 39.7 33.4
in supply inventory .... .(Table 1Z/1AC) % 2.0 2.2 0.8 0.8
in accounts receivable. . .(Table 1AA/1AC) % 4.8 5.2 3.1 7.6
in cash/checkbook balance .(Table 1AB/1AC) % 1.7 1.7 1.2 5.9

TOTAL. ................ .. % 100.0 100.0 100.0 100.0

Full-time equivalent person (2080 hr/year)









20 Container and Field Nurseries in Florida, 1989


Appendix Table 5a--Costs by Expense Category, Container Nurseries in Florida, 1989.

Atl Largest Smallest Most Profit Your
unit 38 Firms 13 Firms 12 Firms 9 Firms Nursery

Operator's salary ............. $ 43,820 75,532 24,081 32,083
Other wages . . . . . . . $ 162,522 328,077 38,794 109,593

LABOR TOTAL .... ............. $ 206,342 403,609 62,875 141,676

Plants & seeds ................. $ 33,228 58,184 11,019 35,517
Containers. ........ ........ $ 18,602 39,279 4,184 15,169
Heating fuel ................ $ 1,651 3,310 42 56
Peat & soil ............... $ 20,264 38,329 5,604 16,183
Fertilizers & lime. .......... .$ 13,212 28,452 2,953 9,072
Pesticides & chemicals. .... ........ $ 8,826 18,356 1,692 4,275
Packaging & shipping supplies . . .. 1,148 3,200 83 56
Other production supplies ......... $ 9,328 16,644 3,515 8,989

SUPPLIES TOTAL. .... ........... $ 106,259 205,754 29,091 89,317

Facility repairs. ............. $ 9,480 15,042 1,862 7,877
Equipment operation ............ $ 13,118 26,290 2,051 5,860

OTHER PRODUCTION COSTS TOTAL. ....... $ 22,598 41,332 3,913 13,737

Travel. ................... $ 4,118 7,134 1,552 1,205
Insurance ................. $ 9,771 18,754 2,706 8,239
Telephone ................. $ 3,511 6,631 1,119 1,995
Electricity .................. $ 4,981 9,003 2,138 3,057
Taxes & licenses. . . . . . .. $ 4,421 8,271 820 5,865
Advertising ................ $ 4,066 5,467 3,271 1,904
Rent-land/buildings . .. ... .. $ 6,627 10,909 3,040 7,954
Other cash costs. ............. $ 11,619 21,850 3,539 9,129

ADMINISTRATIVE & OVERHEAD COSTS TOTAL . $ 49,113 88,019 18,185 39,348

TOTAL CASH COSTS. .............. $ 384,313 738,714 114,064 284,078

Depreciation-machinery/equipment. ..... $ 10,547 20,043 3,732 4,991
Depreciation-buildings/etc. . . . ... $ 8,807 14,877 3,981 4,250
Supply inventory decrease ........... $ 0 0 430 0
Interest on capital*. ........... $ 91,335 168,844 34,232 47,430

TOTAL NON-CASH COSTS. .... ....... $ 110,689 203,763 42,375 56,670

TOTAL ALL COSTS .............. $ 495,002 942,477 156,439 340,748


Note: Interest on capital is 12% charge on owned capital value.








Container and Field Nurseries in Florida, 1989 21


Appendix Table 6a--Costs Per Dollar's Worth of Production, Container Nurseries in Florida. *
ALL Largest Smallest Most Profit Your
unit 38 Firms 13 Firms 12 Firms 9 Firms Nursery
---------------------------------------------- ---- M------------------- ---------__M------ ---
Operator's salary ............. cents 11.1 10.7 17.7 7.8
Other wages ................ cents 41.2 46.5 28.5 26.7

LABOR TOTAL ................ cents 52.3 57.2 46.2 34.5

Plants & seeds ... ............ cents 8.4 8.3 8.1 8.7
Containers ................ cents 4.7 5.6 3.1 3.7
Heating fuel. ............... cents 0.4 0.5 0.0 0.0
Peat & soil ................cents 5.1 5.4 4.1 3.9
Fertilizers & Lime. cents 3.4 4.0 2.2 2.2
Pesticides & chemicals ........... cents 2.2 2.6 1.2 1.0
Packaging & shipping supplies ....... cents 0.3 0.5 0.1 0.0
Other production supplies ......... cents 2.4 2.4 2.6 2.2

SUPPLIES TOTAL. .............. cents 27.0 29.2 21.4 21.8

Facility repairs ............. cents 2.4 2.1 1.4 1.9
Equipment operation ............ cents 3.3 3.7 1.5 .1.4

OTHER PRODUCTION COSTS TOTAL. ....... cents 5.7 5.9 2.9 3.3

Travel. .................... cents 1.0 1.0 1.1 0.3
Insurance ................. cents 2.5 2.7 2.0 2.0
Telephone ................. cents 0.9 0.9 0.8 0.5
Electricity ................ cents 1.3 1.3 1.6 0.7
Taxes & licenses ............. cents 1.1 1.2 0.6 1.4
Advertising ................ cents 1.0 0.8 2.4 0.5
Rent-Land/buildings ............ cents 1.7 1.5 2.2 1.9
Other cash costs. ............. cents 2.9 3.1 2.6 2.2

ADMINISTRATIVE & OVERHEAD COSTS TOTAL . .cents 12.5 12.5 13.4 9.6

TOTAL CASH COSTS. ............ cents 97.5 104.8 83.8 69.2

Depreciation-machinery/equipment ...... cents 2.7 2.8 2.7 1.2
Depreciation-buildings/etc ......... cents 2.2 2.1 2.9 1.0
Supply inventory decrease ......... cents 0.0 0.0 0.3 0.0
Interest on capital ............ cents 23.2 23.9 25.1 11.6

TOTAL NON-CASH COSTS. ........... cents 28.1 28.9 31.1 13.8

TOTAL ALL COSTS .............. cents 125.6 133.7 114.9 83.0


Production is annual sales plus inventory change.








Container and Field Nurseries in Florida, 1989


Appendix Table 1b--Size of Business, Field Nurseries in Florida, 1989.
All Largest Smallest Most Profit Your
unit 11 Firms 3 Firms 4 Firms 4 Firms Nursery


A Value of own plants sold . . . . . $
B Change in inventory value. . . . . $

C Total value of production. . . . . $

D Space for propagating & finishing. .. .. .sq 1
E Space for stock plants .. . . .. .. .sq 1


F Total growing space. . . . . .
G

H Total nursery area . . . . . .

I Full-time equivalent persons .. ....

------------Capital Owned-------------
J Growing plants . . . . . . .
K Bldgs, improvements . . . . .
L Machinery & equipment. . . . . .
M Land . . . . . . . . .
N Supply inventory . . . . . .
0 Accounts receivable . . . . .
P Cash on hand . . . . . . .


Q Total Owned Capital. . . . . . .


S.sq f
acre


341,854
126,377

468,230

Ft 2,088,673
ft NA

:t 2,088,673
as 47.95


. acres


718,523
366,667

1,085,189

1,774,344
NA

1,774,344
40.73


NA


. number 9.21


88,914
67,052

155,965

699,788
0

699,788
16.06


NA 4.00


13.45


5.45


576,278
373,081

949,358

1,733,551
NA

1,733,551
39.80

NA


13.57


$ 903,827 1,287,500 428,987 1,181,627
$ 7,497 8,382 8,674 14,579
$ 31,464 28,826 43,825 48,688
$ 133,190 102,804 127,457 136,311
$ 3,331 2,372 2,476 2,529
$ 44,843 126,391 1,708 94,793
$ 18,181 39,868 12,569 40,830

$ 1,142,333 1,596,143 625,696 1,519,356


------------Capital Leased------------
Bldgs, improvements. . . . . .
Machinery & equipment . . . .
Land . . . . . . . . .


S.


U Total Leased Capital . . ........ $


---Capital Managed (owned +
V Growing plants . . .
W Bldgs, improvements. .
X Machinery & equipment..
Y Land . . . . .
Z Supply inventory . .
AA Accounts receivable. .
AB Cash on hand . . .


leased)----
. . . .



. . .
. . . .
. . . .


$
$
$
$
$
$
$


AC Total Capital Managed . . . . .. $


9,700
4,545
412,273

426,518


903,827
17,197
36,010
545,463
3,331
44,843
18,181

1,568,852


Notes: Propagating/finishing space is for product for sale.
** Full-time equivalent person is 2080 hr/year.


8,900
0
1,340,000

1,348,900


1,287,500
17,282
28,826
1,442,804
2,372
126,391
39,868

2,945,043


0
0
53,750

53,750


428,987
8,674
43,825
181,207
2,476
1,708
12,569

679,446


6,675
0
1,005,000

1,011,675


1,181,627
21,254
48,688
1,141,311
2,529
94,793
40,830

2,531,031


22








23


Container and Field Nurseries in Florida, 1989


Appendix Table 2b--Space Use Indicators, Field Nurseries in Florida, 1989.


ALL Largest Smallest Most Profit Your
unit 11 Firms 3 Firms 4 Firms 4 Firms Nursery
----------------------------------------- ------------------- w----------- w------------- w------------- --W--


Sales/sq ft growing space . (Table 1A/1F) $ 0.16
Production/sq ft growing space. (Table 1C/1F) $ 0.22

Sales/sq ft prop. & fin. space. (Table 1A/1D) $ 0.16
Value of prod./sq ft . . .(Table 1C/1D) $ 0.22

Sales/acre growing area ... (Table 1A/1G) $ 7,129
Production/acre . . . ... (Table 1C/1G) $ 9,765

Plant inventory turnover . . (Table 1A/1J) % 37.8


Average vacant growing space . . ... ..sq ft
--percentage of growing space . . . . %

Total nursery area. ............ . sq ft
(incl. roads, parking, office, etc.)


0.40
0.61

0.40
0.61

17,640
26,641

55.8


NA
NA


NA
NA

NA


Total growing space ......... .... .sq ft 2,088,673
--percent of total nursery area (Table 1F/1G) % NA

Propagating & finishing space . . . . .sq ft 2,088,673
--percent of total growing space (Table 1D/1F) % 100.0


Stock plant space . . . . . . . sq ft
--percent of total growing space (Table 1E/1F) %


NA
NA


0.13
0.22

0.13
0.22

5,535
9,708

20.7


0
0.0


NA 174,240


1,774,344
NA

1,774,344
100.0


NA
NA


0.33
0.55

0.33
0.55

14,480
23,855

48.8


NA
NA

NA


699,788 1,733,551
401.6 NA

699,788 1,733,551
100.0 100.0

0 NA
0.0 NA


Appendix Table 3b--Labor Use Indicators, Field Nurseries in Florida, 1989.
All Largest Smallest Most Profit Your
unit 11 Firms 3 Firms 4 Firms 4 Firms Nursery
-------------------------------- M-------------------- M ------------ w ---------- ---- ----- w---- -W-M----MM------


Plant sales per person* . . (Table 1A/1I)
Value of production per person* (Table 1C/1I)
Growing area per person*. . (Table 1F/1I)
Persons per acre growing area (Table 1F/1G)


$
$
sq ft
number


37,128
50,853
226,844
0.19


53,408
80,662
131,887
0.33


16,307
28,605
128,345
0.34


42,473
69,970
127,767
0.34


* Full-time equivalent person (2080 hr/year)


-LLre SmaL-est --oStf--iS-Ytur--- 1--mmmm








Container and Field Nurseries in Florida, 1989


Appendix Table 4b--Capital Use Indicators, Field Nurseries in Florida, 1989.
~-- ~ ~ ~ ~ ~ -------- ---- I III III


All
unit 11 Firms


Owned capital turnover. . (Table 1A/1Q)
Managed capital turnover. .(Table 1A/1AC)

Capital owned/person* . . (Table 1Q/1I)
Capital managed/person* . .(Table 1AC/1I)

---Managed Capital Per Person In---
Growing plants. . . . (Table 1V/1I)
Bldgs, improvements .... .(Table 1W/1I)
Machinery & equipment . (Table 1X/1I)
Land .. . ......... (Table 1Y/1I)

Capital owned/acre. . ... (Table 1Q/1G)
Capital managed/acre. .... .(Table 1AC/1G)


---Managed Capital Per Acre
Growing plants . . .
BLdgs, improvements . .
Machinery & equipment . .
Land . . . . .


In---
. (Table 1V/1G)
. (Table 1W/1G)
. (Table 1X/1G)
. (Table 1Y/1G)


% 29.9
% 21.8


Largest Smallest Most Profit Your
3 Firms 4 Firms 4 Firms Nursery

45.0 14.2 37.9
24.4 13.1 22.8


124,065 118,641 114,756 111,981
170,388 218,905 124,614 186,544


98,162
1,868
3,911
59,241


95,700
1,285
2,143
107,244


23,824 39,185
32,719 72,301


18,850
359
751
11,376


31,608
424
708
35,421


78,679
1,591
8,038
33,234

38,948
42,294


26,703
540
2,728
11,280


87,089
1,566
3,588
84,118

38,178
63,599


29,691
534
1,223
28,678


---Distribution of Managed Capital---
in growing plants . . ..(Table 1V/1AC)
in buildings & wells. .. .(Table 1W/1AC)
in machinery & equipment. .(Table 1X/1AC)
in Land . . . ..(Table 1Y/1AC)
in supply inventory .. .. ..(Table 1Z/1AC)
in accounts receivable. . .(Table 1AA/1AC)
in cash/checkbook balance .(Table 1AB/1AC)

TOTAL . . . . . . . . .


% 57.6
% 1.1
% 2.3
% 34.8
% 0.2
% 2.9
% 1.2

% 100.0


* Full-time equivalent person (2080 hr/year)


43.7
0.6
1.0
49.0
0.1
4.3
1.4

100.0


63.1
1.3
6.5
26.7
0.4
0.3
1.8

100.0


46.7
0.8
1.9
45.1
0.1
3.7
1.6

100.0


24








Container and Field Nurseries in Florida, 1989 25


Appendix Table 5b--Costs by Expense Category, Field Nurseries in Florida, 1989.

ALL Largest Smallest Most Profit Your
unit 11 Firms 3 Firms 4 Firms 4 Firms Nursery

Operator's salary .. . ........ $ 59,055 130,697 27,147 110,023
Other wages ................ $ 123,943 193,590 43,575 175,595

LABOR TOTAL ................ $ 182,998 324,287 70,722 285,618

Plants & seeds. .............. $ 41,142 126,734 7,624 95,626
Containers. ................. $ 5,581 4,401 6,828 9,551
Heating fuel. ............... $ 45 0 0 0
Peat & soil ................ $ 7,225 16,303 4,398 16,227
Fertilizers & lime. ............ $ 9,475 15,265 5,108 14,449
Pesticides & chemicals. ..... ...... $ 8,917 18,120 2,718 15,215
Packaging & shipping supplies ....... $ 504 0 0 0
Other production supplies ......... $ 11,093 19,898 3,472 15,897

SUPPLIES TOTAL. ............... $ 83,982 200,720 30,149 166,964

Facility repairs ............. $ 11,410 26,937 3,824 21,465
Equipment operation ............ $ 11,885 20,772 3,219 16,243

OTHER PRODUCTION COSTS TOTAL. ....... $ 23,295 47,709 7,042 37,708

Travel. ................. $ 1,766 1,706 588 1,528
Insurance ................. $ 13,548 35,279 5,134 27,405
Telephone ................. $ 2,414 2,904 2,214 3,341
Electricity ................ $ 3,283 2,437 2,045 2,728
Taxes & licenses. ............. $ 3,284 4,543 1,876 4,933
Advertising ......... ....... $ 3,035 3,845 1,904 3,734
Rent-land/buildings ............ $ 2,176 0 3,310 0
Other cash costs. ............ $ 5,361 6,306 2,971 6,643

ADMINISTRATIVE & OVERHEAD COSTS TOTAL $ 34,867 57,021 20,041 50,311

TOTAL CASH COSTS. .............. $ 325,142 629,737 127,953 540,600

Depreciation-machinery/equipment ..... $ 11,447 20,149 6,183 19,208
Depreciation-buildings/etc ........ $ 2,782 7,268 506 5,956
Supply inventory decrease .......... $ 0 0 0 0 __
Interest on capital*. ........... $ 137,080 191,537 75,084 182,323

TOTAL NON-CASH COSTS. ........... $ 151,310 218,954 81,772 207,486

TOTAL ALL COSTS ............... $ 476,452 848,691 209,725 748,087


Note: Interest on capital is 12% charge on owned capital value.








26 Container and Field Nurseries in Florida, 1989


Appendix Table 6b--Costs Per Dollar's Worth of Production, Field Nurseries in Florida, 1989. *
ALL Largest Smallest Most Profit Your
unit 11 Firms 3 Firms 4 Firms 4 Firms Nursery

Operator's salary ............. cents 12.6 12.0 17.4 11.6
Other wages ................ cents 26.5 17.8 27.9 18.5

LABOR TOTAL ................. cents 39.1 29.9 45.3 30.1

Plants & seeds ................. cents 8.8 11.7 4.9 10.1
Containers. .................. cents 1.2 0.4 4.4 1.0
Heating fuel. ............... cents 0.0 0.0 0.0 0.0
Peat & soil ................. cents 1.5 1.5 2.8 1.7
Fertilizers & lime. .. .......... cents 2.0 1.4 3.3 1.5
Pesticides & chemicals. .... ........ cents 1.9 1.7 1.7 1.6
Packaging & shipping supplies ....... cents 0.1 0.0 0.0 0.0
Other production supplies .......... cents 2.4 1.8 2.2 1.7

SUPPLIES TOTAL. .. ............... cents 17.9 18.5 19.3 17.6

Facility repairs, ............. cents 2.4 2.5 2.5 2.3
Equipment operation ............ cents 2.5 1.9 2.1 1.7

OTHER PRODUCTION COSTS TOTAL. ........ cents 5.0 4.4 4.5 4.0

Travel ................... cents 0.4 0.2 0.4 0.2
Insurance .................. cents 2.9 3.3 3.3 2.9
Telephone .... .............. cents 0.5 0.3 1.4 0.4
Electricity ............... cents 0.7 0.2 1.3 0.3
Taxes & licenses. ............... cents 0.7 0.4 1.2 0.5
Advertising ................cents 0.6 0.4 1.2 0.4
Rent-land/buildings ............ cents 0.5 0.0 2.1 0.0
Other cash costs. ............... cents 1.1 0.6 1.9 0.7

ADMINISTRATIVE & OVERHEAD COSTS TOTAL . cents 7.4 5.3 12.8 5.3

TOTAL CASH COSTS. .............. cents 69.4 58.0 82.0 56.9

Depreciation-machinery/equipment. ...... cents 2.4 1.9 4.0 2.0
Depreciation-buildings/etc. ........ cents 0.6 0.7 0.3 0.6
Supply inventory decrease .......... cents 0.0 0.0 0.0 0.0
Interest on capital ............ cents 29.3 17.7 48.1 19.2

TOTAL NON-CASH COSTS. .. ........ cents 32.3 20.2 52.4 21.9

TOTAL ALL COSTS .............. .... cents 101.8 78.2 134.5 78.8


Production is annual sales plus inventory change.




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