<%BANNER%>
HIDE
 Front Cover
 Title Page
 Abstract
 Table of Contents
 List of Figures
 List of Tables
 Main
 Back Cover














Business analysis of foliage plant nurseries in south Florida
ALL VOLUMES CITATION SEARCH THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00026141/00005
 Material Information
Title: Business analysis of foliage plant nurseries in south Florida
Series Title: Economic information report
Portion of title: Foliage plant nurseries in south Florida
Physical Description: v. : ; 28 cm.
Language: English
Creator: University of Florida -- Food and Resource Economics Dept
Publisher: Food and Resource Economics Dept., Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville
Creation Date: 1987
Publication Date: 1982-
Frequency: annual
regular
 Subjects
Subjects / Keywords: Nurseries (Horticulture) -- Economic aspects -- Periodicals -- Florida   ( lcsh )
Foliage plant industry -- Economic aspects -- Periodicals -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
statistics   ( marcgt )
serial   ( sobekcm )
 Notes
Dates or Sequential Designation: 1980-
General Note: Title from cover.
 Record Information
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: aleph - 000318891
oclc - 09221698
notis - ABU5740
System ID: UF00026141:00005
 Related Items
Preceded by: Business analysis of south Florida foliage plant nurseries

Table of Contents
    Front Cover
        Front Cover
    Title Page
        Page i
        Page ii
    Abstract
        Page iii
        Page iv
    Table of Contents
        Page v
        Page vi
    List of Figures
        Page vii
        Page viii
    List of Tables
        Page ix
        Page x
    Main
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
        Page 35
        Page 36
        Page 37
        Page 38
        Page 39
        Page 40
        Page 41
        Page 42
        Page 43
    Back Cover
        Page 44
Full Text
\00
25
Z56


Economic Information
Report 256


Business Analysis of Foliage Plant
Nurseries in South
Florida, 1987













Central Science
Library
JUN 1 1989
University of Florida


Food & Resource Economics Department
Agricultural Experiment Stations and
Cooperative Extension Service
Institute of Food and Agricultural Sciences
University of Florida, Gainesville 32611


December 1988


J. Robert Strain
Alan W. Hodges





















iP031


'C


!411 i
~v,jji!i!f


~Z~ii: 1
: ;
., .. ~:'8iii
:i ~~
I~ "" ~'
C
~;
it~b~


1Blfsl-rf&ssl


mbWr-id


L~s~























:~5 ---

~I u\' ",Q1

















ABSTRACT
Average sales, costs, returns, and efficiency indicators are presented for 27 wholesale
foliage plant nurseries in South Florida, for the tax year of 1987. Plant sales averaged
$956,883, and growth in the value of plant inventory during the year was $41,338. When
adjustments were made for changes in inventories and miscellaneous income, total gain for the
year was $1,006,937. Total costs of production, including cash expenses and non-cash
allowances for depreciation, but excluding any returns to the operator averaged $886,567. Net
nursery income averaged $140,369. Capital investment including plant inventory, land,
equipment, buildings, supplies, and accounts receivable amounted to $1,112,370. Average return
on capital investment was 6.4 percent. Average returns (to owner-operator and capital) per
square foot of growing area were $.24. Comparable information is presented also for
subsamples of the largest and the smallest nurseries.
KEY WORDS: Foliage nursery business analysis, income, costs, investment, efficiency
measures, South Florida.








ACKNOWLEDGEMENTS
This report was made possible by the cooperating South Florida foliage 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 DeArmand Hull, Loretta Hodyss, and Bill Schall.
Acknowledgement and appreciation of the help received, however, does not alter the fact that
errors in the analyses or in the interpretation of the information presented herein are the
sole responsibility of the authors.





















































































lv
















TABLE OF CONTENTS


. . . .
. . . .
. . . .


. . . .


ABSTRACT ..........
ACKNOWLEDGEMENTS .
LIST OF FIGURES .......
LIST OF TABLES ........
LIST OF APPENDIX TABLES .


INTRODUCTION. . . . .
PROCEDURE .................
DATA AND RESULTS .............
Size of Business .. . . ..
Sales and Total Value of Production .
Annual sales . . .
Monthly sales ..........
Land, Labor and Capital . .
Land: bed and bench space .
Labor: full-time equivalent persons
Capital: owned and managed .
Productivity Indicators . . .
T andrl Tca


. . . . . .
Labor Use . . . . .
Capital Use . . . . .
Capital turnover . . . .
Capital managed per person . . .
Capital managed per acre ...........
Distribution of managed capital . .
Costs of Production . . . . .
Costs by Expense Category* ............
Costs as a Percent of the Total Cost* . .
Cost Efficiency . . . . .
Costs Per Square Foot of Bed and Bench Space .
Costs Per Square Foot of Propagating and Finishing S
Costs Per Dollar's Worth of Production . .
Cash Costs Per Dollar's Worth of Sales . .
Income Summary . . . . .
Total G ain . . . . .
Cost Deductions and Net Nursery Income . .
Return to Capital . . . . .
Statement of Financial Position . . . .
A ssets . . . . . .
Cash on hand . . . .
Accounts receivable .............
Inventory values . . . .
Total current assets . . . .
Long term assets . . .. .
Total assets . . . . .


. . . . I
. . . . 2

. . . . 3

. . . . 3
. . . . 3
. . . . 36
. . . . 5


. . . . 6
. . . . 6
. . . . 6
. . . . 7

. . . . 81

. . . . 19
. . . . 1
. . . . 1
. . . . 12
. . . . 12
. . . . 12



. . . . 14
. . . . 14
. . . . 15
. . . . 218
. . . . 218
pace . . 219
. . . . 20
. . . . 21
. . . . 22
. . . . 25
. . . . 23
. . . . 23
. . . . 25


. . . . 25
. . . . 25
. . . . 25



. . . . 27
27


* These sections also contain the following subcategories:
Salaries and wages
Production supplies Total cash costs
Other production costs Non-cash costs
Administrative and overhead Total all costs


Page
. iii


. vii
Six
ix


>












TABLE OF CONTENTS (Continued)
Pane

Liabilities . . . . . . . . .. 27
Current liabilities .... .............. ........ 27
Long term liabilities ... ............... .... .. 27
Total liabilities ................... ........ 27
Net Worth ................... .. ............ 27
Total Profitability Model .................... ........ .28
Margin Management... .......................... 28
Asset Management .................. ........... 28
Leverage Management... ... ............. ........ 28
CONCLUDING COMMENTS ............................ .30

APPENDIX . . . . . . . . .. 31
Definitions..... ............................ 32
M making your own calculations ....... ....... ... .. ....... 33
Appendix Tables ................................. 35











LIST OF FIGURES


Figure

1 Sales and Total Value of Production . .

2 M monthly Sales . .. . . ..

3 Land: Bed and Bench Space. . . .

4 Labor: Number of Persons . . .

5 Capital Managed .................

6 Land Use: Value of Production Per Square Foot .

7 Labor Use: Value of Production Per Person .

8 Capital Turnover. ................

9 Capital Managed Per Person . . .

10 Capital Managed Per Acre . . .

11 Distribution of Managed Capital . . .

12 Distribution of Costs of Production . .

13 Costs Per Square Foot of Bed and Bench Space. ..

14 Costs Per Square Foot of Propagating and Finishing

15 Costs Per Dollar's Worth of Production . .

16 Cash Costs Per Dollar's Worth of Sales . .

17 Distribution of Total Gain . . .

18 Return to Capital.......... ......

19 Assets and Liabilities . . . .

20 Total Profitability Model . . ....


. .

...

. .o

. .



















...


. .

. .


Page

S4

S5

* 6

S6

S7

8

10

11

12

12

13

16

18

19

20

21

23

24

26

29

































































viii












LIST OF TABLES
Table

1 Sales, bed and bench space, people and capital, 27 foliage nurseries in South
Florida, 1987 . . . . . . . .

2 Costs of production, 27 foliage nurseries in South Florida, 1987. . . .

3 Income summary, 27 foliage nurseries in South Florida, 1987 . . .




LIST OF APPENDIX DATA TABLES


Appendix Table

1 Size of business, 27 foliage nurseries in South Florida, 1987 . . .

2 Rates of production, 27 foliage nurseries in South Florida, 1987 . .

3 Land use indicators, 27 foliage nurseries in South Florida, 1987 . .

4 Labor use indicators, 27 foliage nurseries in South Florida, 1987 . .

5 Capital use indicators, 27 foliage nurseries in South Florida, 1987 . .

6 Costs by expense category, 27 foliage nurseries in South Florida,
1987 . . . . . . . .. .

7 Percent of total costs by expense category, 27 foliage nurseries in South
Florida, 1987 . . . . . . . .

8 Costs per square foot of bed and bench space, 27 foliage nurseries in South
Florida, 1987 . . . . . ....

9 Costs per square foot of propagating and finishing space, 27 foliage nurseries
in South Florida, 1987 . . . . . . .

10 Costs per dollar's worth of production, 27 foliage nurseries in South
Florida, 1987 . . . . . . . .

11 Cost per dollar's worth of sales (no adjustment for change in plant
inventory), 27 foliage nurseries in South Florida, 1987 . . .

12 Income summary, 27 foliage nurseries in South Florida, 1987 . . .

13 Statement of Financial Position, 27 foliage nurseries in South
Florida, 1987 . . . . . . . .


Pane

35

35

35

36

36


. 37


. 38


. 39


. 40


. 41


. 42

. 43


. 43


Pane













































































































X2












\s^ -^









BUSINESS ANALYSIS OF FOLIAGE NURSERIES IN SOUTH FLORIDA, 1987



J. Robert Strain and Alan Hodges



INTRODUCTION


This publication contains information on sales, costs, returns and production efficiency
for 27 wholesale foliage plant nurseries in South Florida for 1987. Other publications in the
Florida Nursery Business Analysis series include reports on Dade County Florida foliage plant
nurseries, Central Florida foliage plant nurseries, woody ornamental field nurseries, and woody
ornamental container nurseries. Purposes of the nursery business analysis series include:
1) Furnishing nursery operators with various physical and economic measures for
evaluating the efficiency of individual nurseries and for making more informed management
decisions;
2) Providing individuals considering entering the wholesale ornamental plant production
business with an estimate of the input requirements and revenue potential;
3) Providing industry investors with representative measures of average business
performance.
4) Providing Florida Extension personnel with business information for conducting
educational programs with nursery operators.



J. ROBERT STRAIN is an extension economist and professor, and ALAN HODGES is an
economic analyst, both in IFAS Food and Resource Economics Department.
















PROCEDURE
The information and averages presented in this report are based on data supplied by
nursery operators in the form of confidential production and accounting records. They
participated in the program voluntarily and do not represent a statistically selected sample.
However, the nursery operators participating in the Florida Nursery Business Analysis Program
are thought to represent some of the more efficient foliage plant nurseries in South Florida,
rather than being typical of the foliage plant industry.
Data were collected for 1987 tax year. In most cases, this was for January through
December. For others, data for fiscal years ending after July 1, 1986, and before July 1, 1988
were included as 1987 data.
Not all nursery operators received a regular salary from their operation. In these cases,
an estimate of the value of the time of the operator was collected and used in the analysis in
order to provide a more equitable basis for comparing data. For the same reason, interest
expense paid by the individual nursery operator was excluded from the costs listed in this
report, and instead, an interest charge for the total owned investment was included as a
non-cash cost, calculated at the rate of 12 percent per year.
The owned capital investment reflects the depreciated book value of buildings,
improvements, machinery and equipment. Growing plants also are included as a part of the
owned capital investment, at a value reflecting their average wholesale price, and discounted
in proportion to the percentage of completion. In absence of detailed cost accounting records,
a commonly accepted method of evaluating inventory for an ongoing nursery, is to value all
plants at 50 percent of their wholesale value when finished. Some nursery operators use
slightly different methods, and for this report, the values received from operators were the
values used. Land included in owned capital investment was valued at the original purchase
price. Although this represents the actual investment in a nursery operation, it may not
reflect the replacement cost, particularly for older firms.
The tables and figures present average values for all 27 nurseries, for the average of
the ten largest nurseries (approximately a third of participating firms), and for the nine
smallest nurseries (again, approximately a third of firms). All firms in the largest group had
sales of own plants greater than $500,000, while all firms in the smallest group had sales less
than $200,000. On charts where lines appear indicating the range of data, the upper line










designated "highest rates" represents the average of the highest third of firms for the
particular measure, and the lower line designated "lowest rates" is the average for the lowest
third. Nursery operators received an analysis for their own operation, which contained similar
information as used in this report, shortly after they supplied their data. Nursery operators
analyzing their own operations may find this information especially valuable for indicating the
general area of their business needing additional study and analysis.









DATA AND RESULTS
The key findings of this report appear in the text in the form of charts and graphs.
The data from which they were derived may be found in the appendix tables at the end of
this report. The appendix tables include notations on calculations involved for those who may
wish to examine some figures in further detail, and spaces are provided for entering figures
pertaining to your own firm for comparison. Where tables appear in this report, arithmetic
inconsistencies from rounding may be noted.


Size of Businessl
Appendix Table I (summarized in Table 1) presents basic information on size of business
and scale of production operations. When combined with costs of production in Appendix Table
6, these data provide the basis for developing most of the measures and indicators shown in
the other tables and figures in this report.


Sales and Total Value of Production
Annual sales. Sales figures used in this analysis represent only plants produced by the
nursery firm itself. In other words, if any plants were purchased for immediate resale, or
"brokered", their value was deducted from total sales to give the value of own plants sold.
Figure 1 illustrates the differences in the sizes of the industry average, largest, and smallest
foliage plant nurseries. Own plant sales averaged $956,883 for all nurseries, $2,182,320 for the
largest nurseries, and $122,981 for the smallest nurseries (Table 1).


1 See Appendix Table 1 on page 35 for complete data.













Table 1--Sales, bed and bench space, people, and capital, 27 foliage nurseries in
South Florida, 1987.
unit ALL Largest Smallest
Nurseries Third (10) Third (9)

Value of own plants sold . . ... $ 956,883 2,182,320 122,981
Change in Inventory value . . .... S 41,338 65,222 (10,083)
Total value of production. . . ... 998,221 2,247,542 112,898
Total bed & bench space. . . ... sq.ft. 578,299 1,368,344 0 61,559
Number of persons employed . .... .. number 22.61 49.91 3.98
Owned Capital . .. $ 1,112,370 2,373,272 227,836
Leased/rented capital items . .... .. $ 115,444 190,300 58,722
Managed Capital. . . . ... $ 1,227,814 2,563,572 286,558

See Appendix Table 1 for more detail.







Figure 1

Sales and Total Value of Production
27 South Florida Foliage Nurseries, 1987

Dollars (Thousands)
2500


2000 ......- ..


1500 \\\\\\\ i
..................... .... ... ....
1000 .


500 \\\\ .
0Sales r Value of Production


All Nurseries Largest Third Smallest Third










Total value of production during the year adjusts sales for change in the value of the
plant inventory. Increases in the value of plant inventory during the year mean the total
value of the year's productive activities was greater than sales. Decreases in the value of
plant inventory mean the total value of the productive effort was less than sales. Plant
inventory change was positive for the average of all nurseries and the largest firms, and was
negative for the smallest nurseries, giving a total value of production of $998,221, $2,247,542,
and $112,898 respectively (Table 1).



Monthly sales. Figure 2 shows the pattern of monthly sales for all nurseries, largest
nurseries and smallest nurseries. The pattern for all nurseries showed peaks in sales during
the months of January, March, September and December. Sales for these four months
accounted for 45 percent of the year's total sales. Sales for January, the highest month, were
$117,270, which was 36 percent greater than for February, the lowest month ($86,247).






Figure 2
Monthly Sales
27 South Florida Foliage Nurseries, 1987

Dollars (Thousands)
300

250

200 ...
Largest Third
150 ... ......... .. ............... -.- A ll N urseries
-0 Smallest Third
100

5 0 .. ... ...... ... .. .. .. . .......
50


JanFebMar AprMayJun Jul AugSepOctNovDec
Month








Land. Labor and Capital
Land: bed and bench space. Total bed and bench space averaged 578,299 square feet for
all nurseries, 1.368 million square feet for the largest nurseries, and 61,559 square feet for the
smallest (Table 1 and Figure 3). Propagating and finishing space (that portion of bed and
bench space used to grow plants for sale) averaged 564,850 square feet for all nurseries, 1.353
million square feet for largest nurseries, and 60,648 square feet for the smallest nurseries.
Stock plant area is bed and bench space used exclusively for production of plants propagating
material. This area averaged 13,449 square feet for all nurseries, 15,168 square feet for the
largest firms, and 911 square feet for the smallest nurseries. Total nursery area, which
includes drives, roads, parking lots, office, packing house and the like, averaged 15.9 acres for
all nurseries, 36.2 acres for the largest firms, and 2.3 acres for the smallest.

Figure 3
Land: Bed and Bench Space
27 South Florida Foliage Nurseries, 1987
,oSquare Feet (Thousands)
1BO H:!--i---..............................

120 0 .. ......... .. ... .....
100 ..... ...........


400
200 -.
All Nurserlea Largest Third Bfmalles Third

Labor: full-time equivalent persons. The number of full-time equivalent persons involved in
the nursery operation is obtained by dividing total labor hours, including the time of salaried
non-hourly workers and managers, by the number of hours in a normal working year (40 hours
per week times 52 weeks per year equals 2,080 hours). Average number of full-time equivalent
persons involved for all nurseries was 22.6, for the largest it was 49.9, and for the smallest
nurseries it was 4.0 (Table 1 and Figure 4).
Figure 4
Labor: Number of Persons
27 8outh Florida Foliage Nurseries. 1987
Full-tlme Equiv. Persons (2080 hrs/yr)










Capital: owned and managed. Capital owned is the current value (original cost less
depreciation) of capital assets in the nursery operation, including plants in inventory,
equipment, buildings, land, accounts receivable and cash on hand. Capital owned averaged
$1.112 million for all nurseries, $2.373 million for the largest firms, and $227,836 for the
smallest. Related debt is not deducted in this determination of the value of capital owned.
Capital managed is the value of capital owned plus the value of additional capital items
used and under the control of the manager, such as leased property. Capital managed
averaged $1.228 million for all nurseries, $2.564 million for the largest nurseries, and $286,558
for the smallest nurseries (Table 1 and Figure 5).








Figure 5
Capital Managed
27 South Florida Foliage Nurseries, 1987


All Nurseries Largest Third Smallest Third
Capital managed is owned plus leased,










Productivity Indicators
Land Use2
The traditional indicator of efficiency in the use of land is value of sales per square foot
of bed and bench space. However, value of production is a more important indicator. Value of
production is annual sales of own plants adjusted for change in the value of plant inventory.
Average value of production per square foot of propagating and finishing space was $1.77 for
all nurseries, $1.66 for the largest firms, and $1.86 for the smallest. Value of production per
square foot of total bed and bench space (includes stock plant space) was $1.73 for all
nurseries, $1.64 for the largest firms, and $1.83 for the smallest (Figure 6). Firms with the
highest annual rates of production averaged $3.39 per square foot, while those with the lowest
averaged $.74 per square foot.


Figure 6
Land Use: Value of Production/Sq. Ft.
27 South Florida Foliage Nurseries, 1987

Dollars/Sq.Ft,
3.50 n -

3.00



2.00

1.50



0.50

0.00
All Nurseries Largest Third Sm llest Third

In terms of value of production per acre of total nursery area (includes non-growing
areas such as office, parking, packing house, walkways, driveways), the average for all
nurseries was $62,633, for the largest nurseries, $62,056, and for the smallest nurseries,
$49,748. The relationship between all nurseries and the smallest nurseries was reversed in this
case because of the greater percentage of land in non-growing area for the smallest
nurseries.


2 See Appendix Table 2 on page 35 for complete data.









In general, other things being equal, increasing sales per square foot of production area
should increase the profitability of a nursery operation. However, this does not necessarily
assure high profitability because other things may not be equal. On the other hand, lower
sales per square foot of bed and bench space can result from a number of things, such as
letting plants continue to grow after reaching salable size, letting space sit vacant too long
between the time a plant is sold and another is put in place to start growing again, selecting
varieties that grow slow or are priced low relative to their growing time and space
requirements, and having disease and quality problems that reduce yields of salable plants. In
addition, nursery layout and fertilizing and growing techniques can alter the time and space
used for the same crop in two different nurseries.
Plant inventory value per square foot in production is another indicator of efficiency in
the use of space. This averaged $.84 for all nurseries and $.70 for largest nurseries. Plant
inventory per square foot was $1.56 for the smallest nurseries, or almost double the average
of all nurseries. For ongoing operations, low plant inventory values per acre imply either
inefficient use of land or unwise selection of crops grown in terms of the relationship
between their price and growing area requirements.
Additional indicators of efficiency in the use of land include turnover of plant
inventory, the share of total nursery area in bed and bench space, the share of bed and
bench space used for stock plants, and the average percentage of bed and bench space that
is vacant. Average turnover of the plant inventory was 197 percent. This means that annual
plant sales amounted to almost two times the average value of plant inventory. Vacant bed
and bench space averaged 6.3 percent of the total for all nurseries, 6.2 percent for the
largest third, and 11.1 percent for the smallest third3.


Labor Use4
Value of production per full-time equivalent person (2080 hrs/year) is one of the best
measures of efficiency in the use of labor. This indicator averaged $44,153 per person for all
nurseries, $45,035 for the largest firms, and $28,350 for the smallest (Figure 7).
Highest rates of production per person averaged $67,319, and lowest rates were $23,353.
This represented a range about the industry average of 52 percent above and below (Figure 7).
An indicator of intensity in the use of labor is production area per person. Total bed
and bench space per full-time equivalent person averaged 25,579 square feet for all nurseries,
27,418 square feet for the largest firms, and 15,458 square feet for the smallest. Stated


3 See Appendix Table 4 on page 36 for complete data.

4 See Appendix Table 3 on page 36 for complete data.









another way, the number of persons per acre of bed and bench space averaged 1.7 for all
nurseries, 1.6 for the largest nurseries, and 2.8 for the smallest nurseries. Thus, the smallest
foliage nurseries employed 32 percent more labor per unit acre than the average of all
nurseries.

Figure 7
Labor Use: Value of Production/Person
27 South Florida Foliage Nurseries, 1987

Dollars/Employee Equivalent (Thousands)
70
n n -- -a--- r----


5 0 .. ... ....... .................... ....... ....... .. .... .. ... ... ..... H ig h e s t R ate s
60-

50 -.... .. .. ......... ..... I.... H highest R ates

40- Lowest Rates



0



All Nurseries Largest Third Smallest Third

If all other things are equal, higher sales per person involved is desirable. However,
seldom are all other things equal. For example, higher sales per person when viewed alone
might seem to indicate true efficiency, but when viewed together with other indicators, it
might instead show less than optimum number of employees for the volume of plants being
handled or space being cared for. This could result in tardy or untimely plant care, hence,
slower growth and/or lower quality plus a failure to restock empty space promptly. In this
case, other indicators such as production rate, space use intensity, capital turnover, and costs
per square foot would not support the labor efficiency indicator.
Lower sales per person can result during periods of rapid expansion when extra help is
needed to care for a larger numbers of plants before they reach salable size. Lower sales
person also can result during difficult economic times when sales are slow, but plant care
must continue. Variations among nurseries can be the result of differences in investment in
labor saving capital items, differences in any of the factors noted above that lower
production rate, or poor management practices in the utilization of labor.









Capital Use5
Capital Turnover. Annual turnover of owned capital value is the percentage that results
from dividing the value of own plants sold by the value of capital owned. Capital turnover for
all nurseries averaged 86 percent, for the largest nurseries 92 percent, and for smallest 54
percent (Figure 8). This means that for the average of all nurseries and largest nurseries,
annual sales were nearly equal to the capital investment. For the smallest nurseries, sales
were slightly more than half of capital investment. Highest rates averaged 136 percent, and
lowest rates averaged 41 percent.



Figure 8
Capital Turnover
27 South Florida Foliage Nurseries, 1987

Sales as a Percentage of Capital Owned
160%
1 4 0 % ..... ........ ... .. .

120%

100%
0% .....ighest Rates
80%- -
Lowest Rates
60% -



0%
All Nurseries Largest Third Smallest Third



In general, larger percentage turnover numbers are desirable, for they indicate greater
sales per dollar of investment in the nursery. Problems that lower turnover rate include any
of the items already mentioned that lower production rate hence sales volume for a given
nursery investment. Low capital turnover is particularly common in nurseries just getting
started, or in nurseries that are expanding rapidly. Excessive investments in land, labor saving
machinery and equipment, or expensive (though maybe unnecessary) niceties will also tend to
lower the captial turnover rate.


5 See Appendix Table 5 on page 36 for complete data.











Capital Managed Per Person. Capital owned plus the value of capital items leased make-

up the total capital managed in a nursery. Capital managed per full-time equivalent person

averaged $54,308 for all nurseries, $51,368 for the largest nurseries, and $71,959 for the

smallest nurseries (Figure 9). Highest rates for capital managed per person averaged $67,319

per person. Lowest rates were $23,353 per person, about one half of the all-nursery average.




Capital Managed Per Acre. Capital managed per acre of total nursery area averaged

$77,039 per acre for all nurseries and $70,782 for the largest firms. The average investment of

$126,269 for the smallest nurseries was nearly twice as high as that for the average of all

nurseries. Highest rates of capital managed per acre were even higher at $225,284. Lowest

rates averaged $52,709 per acre (Figure 10).


Figure 9
Capital Managed Per Person
27 South Florida Foliage Nurseries. 1987

Dollars per Person (Thousands)

0 ... ..... .. ... ... .. .... .. .... .. ....... ..... ... ..... .. .... .


80




All Nurprllg L-rglt Third Barllaut Third


Figure 10
Capital Managed Per Acre
27 South Florida Foliage Nurseries, 1987

Dollars/Acre (Thousands)
250.


Highest Ratea
. .................. ..................... Lo iv e t R ates
.. .... .. ..


All NkIerlr Lrget Thild sBrr~ nt Thlro


Distribution of Managed Capital. The distribution of the capital investment among land,

buildings, equipment, etc. is an important area of concern in management. Figure 11 indicates

the percentage distribution of total capital managed for the average of all foliage nurseries in

1987. Growing plants in inventory represented the largest share of capital managed, 39.6

percent. Next in importance was buildings (20.3 percent) and land (18.8 percent). Other lesser

areas of capital managed were accounts receivable (14.1 percent), machinery and equipment

(3.6 percent), and supplies and cash (3.7 percent).


200 .....

150






Figure 11
Distribution of Managed Capital
27 South Florida Foliage Nurseries, 1987

Plants
39.3%




Land
18,9%


Machinery & Equip,
3.6%

Buildings & install
20.4%


Accounts receivable
14.2%


Supplies &
3.7%


Cash


Includes


capital


plus capital


owned
aased












Costs of Production
For the purposes of this report, costs of production include not only cash outlays but
also non-cash costs and allowances that must be covered over time if the business is to
remain viable. The itemized budget for cash expenses presented in Appendix Table 6 and
summarized in Table 2 of this report is considered to be a minimal analysis of the costs of
production involved in a foliage nursery enterprise. Included as a non-cash cost is an
allowance for a minimum return on investment. The interest rate used here is 12 percent.



Table 2--Costs of Production, 27 foliage nurseries in South Florida, 1987.

All Nurseries Largest Third (10) Smallest Third (9)


Labor Total . . $351,187 32.8% $788,845 32.6% $59,562 35.3%
Supplies Total. . .... $324,746 30.4% 5745,123 30.8% $41,373 24.5%
Other Production Costs Total. .. $48,599 4.5% $113,297 4.7% $6,107 3.6%
Administrative & Overhead Costs $144,411 13.5% $331,823 13.7% $18,483 11.0%
Total Cash Costs ..... ..$868,944 81.3% $1,979,088 81.9% $125,525 74.5%
Total Non-Cash Costs . $200,495 18.7% $437,004 18.1% $43,027 25.5%
Total All Costs . ... $1,069,439 100.0% $2,416,092 100.0% $168,552 100.0%

see also Appendix Tables 6 and 7 for more detail




Costs by Expense Categorv6
Costs by expense category were summarized from the annual profit and loss statement or
tax records of the participating nurseries. The cost categories were grouped into wages and
salaries, production supplies, other production costs, administrative and overhead, and non-cash
costs. These figures provide benchmarks for the relative magnitude of various cost items, and
may provide guidance for persons evaluating a South Florida foliage nursery, either as a
buyer, seller, or lender.
Salaries and wages. The average for salaries and wages includes the operator's salary or
time value, employees wages, salaries, benefits, and other payroll costs. As mentioned earlier,
in some cases the operator's salary was zero or was not appropriate, so a time-value was
estimated based upon the operator's expected earnings, or previous experience. The operator's



6 See Appendix Table 6 on page 37 for complete data.








salary or time value averaged $69,387 for all nurseries, $134,488 for the largest nurseries, and
$25,822 for the smallest nurseries. Wages, salaries, and associated expenses for employees
averaged $281,799 for all nurseries, $654,356 for the largest, and $33,740 for the smallest.
Thus, total expenses on wages and salaries averaged $351,187 for all nurseries, $788,845 for
the largest, and $59,562 for the smallest nurseries (Table 2).
Production suDplies. Expenses for production supplies include plants and seeds,
containers, production heat, peat and soil, fertilizer and lime, pesticides and chemicals,
packing and shipping materials, and other production supplies. Expenses for supplies for all
nurseries averaged $324,746, for the largest nurseries $745,123, and for smallest nurseries
$41,373.
Other production costs. Other production costs are facility repairs/maintenance and
equipment operating costs. For all nurseries they averaged $48,599, for the largest nurseries
$113,297, and for the smallest $6,107.
Administrative and overhead. Administrative and overhead expenses usually cannot be
assigned to any particular crop or growing activity, yet must be covered in order to remain
in business. These expenses includes travel/trade shows, insurance, telephone, electric power,
advertising, rent, and other cash expenses. Administrative and overhead expenses averaged
$144,411 for all nurseries, $331,823 for the largest, and $18,483 for the smallest.
Total cash costs. Total cash costs, including all items mentioned above, averaged
$868,944 for all nurseries, $1,979,088 for the largest, and $125,525 for the smallest nurseries.
Non-cash costs. Non-cash costs include depreciation allowances on capital assets,
decreases in supply inventory (using supplies purchased during a previous time period), and an
interest charge for the use of the capital invested in the nursery. These costs averaged
$200,495 for all nurseries, $437,004 for the largest, and $43,027 for the smallest firms.
Total all costs. The sum of all cash costs and non-cash cost allowances averaged
$1,069,439 for all nurseries. It was $2,416,092 for the largest nurseries, and $168,552 for the
smallest.



Costs as a Percent of the Total Cost7
While expenditures show the magnitude of expenses for various cost categories, they are
not very helpful for comparing cost relationships with industry averages which may represent
a significantly different size of business. But costs in terms of percentage of the total are
useful for this purpose. Distribution of costs of production by category are shown graphically
for the average of all nurseries in Figure 12.

7 See Appendix Table 7 on page 38 for complete data.

15






Figure 12
Distribution of Costs of Production
27 South Florida Foliage Nurseries, 1987


Non-cash costs
\ 19%


Admin,


& overhead
14%


Other prod,
5%


Supplies
30%


Labor
33%


costs









Salaries and wages. Salaries and wages (includes operator) as a percentage of total costs
were quite uniform across the industry, averaging, 32.8 percent of total costs for all nurseries,
32.6 percent for the largest, and 35.3 percent for the smallest nurseries (Table 2). The
smallest nurseries reported a significantly higher percentage of costs in operator salaries (15.3
percent) than the industry average (6.5 percent), but a lower percentage in employees wages
and salaries (20.0 percent vs. 26.4 percent). Employees wages and salaries were highest for the
largest nurseries (27.1 percent).
Production supplies. Expenses for production supplies were similar for all nurseries and
the largest nurseries, but differed for the smallest nurseries. Average costs for all nurseries
were 30.4 percent of total costs, for the largest nurseries 30.8 percent, and for the smallest
nurseries 24.5 percent. The greatest share of expenses for this category was "plants and seeds"
(7.8 percent to 12.4 percent). Expenses for growing containers were 3.6 to 4.1 percent of total
costs. Expenses on shipping materials showed the largest proportional variation, being 1.9
percent for the smallest nurseries, 3.2 percent for all nurseries, and 3.3 percent for the
largest.
Other production costs. Other production costs averaged 4.5 percent for all nurseries, 4.7
percent for the largest, and 3.6 percent for the smallest nurseries.
Administrative and overhead. Overhead costs averaged 13.5 percent of total costs for all
nurseries, 13.7 percent for the largest, and 11.0 percent for the smallest. Thus, counter to
expectations, there is no indication of economy of scale for these overhead expenses.
Total cash costs. Total cash costs as a percent of all costs for these foliage nurseries
were very close for the average of all nurseries and the largest nurseries (81.3 percent and
81.9 percent). The smallest foliage nurseries were about 7 points lower, at 74.5 percent.
Non-cash costs. Non-cash costs ("depreciation" through "interest on capital") averaged
18.7 percent of total costs for all nurseries, 18.1 percent for the largest, and 25.5 percent for
the smallest. Thus, the lower percentage cash costs for the smallest nurseries were offset by
their higher percentage non-cash costs. The greatest share of differences in non-cash costs
were due to interest on capital: 12.5 percent for all nurseries, 11.8 percent for largest, and
16.2 percent for the smallest. Depreciation on equipment, buildings, and other property
improvements ranged from 6.3 to 9.2 percent.









Cost Efficiency
While expenses as a percent of total costs facilitate comparing operating statements, they
do not allow easy comparison of growing costs in relation to the physical factors of
production or to product revenue. Costs per square foot and costs per dollar of sales and
cost per dollar's worth of production are important indicators for these comparisons.


Costs Per Square Foot of Bed and Bench Space8
These figures were obtained by dividing each of the dollar cost figures in Appendix
Table 6 by the square feet of bed and bench space shown in Appendix Table 1. This is
growing area only, not including offices, packing areas, drives, roadways, and ditches, etc.
Costs per square foot of bed and bench space averaged $1.85 for all nurseries, $1.77 for the
largest, and $2.74 for the smallest (Figure 13). Highest rates of cost per square foot averaged
$3.81, and lowest rates averaged $1.00 (Figure 13). This gave a broad range of $2.81 per
square foot.
Cash costs per square foot exclude the non-cash allowances for depreciation, decreases in
supply inventory, and interest. They averaged $1.50 for all nurseries, $1.45 for the largest, and
$2.04 for the smallest nurseries.


Figure 13
Costs/Square Foot of Bed & Bench Space
27 South Florida Foliage Nurseries, 1987

Dollars/Sq.Ft,
4.00
a a ,-- Highest Rates
Lowest Rates
3 .0 0 ............... .. ..... .. .. .. .... .... N o n-cash costs
SCash Costs

2.00


1.00 -


0.00
All Nurseries Largest Third Smallest Third



8 See Appendix Table 8 on page 39 for complete data.








Costs Per Square Foot of Propagating and Finishing Space9
Costs per square foot of propagating and finishing space is the most appropriate
measure for estimating individual plant growing costs or for comparing cost efficiency
between nurseries. These costs were obtained by dividing the dollar amounts in Appendix
Table 6 by the square feet of propagating and finishing space from Appendix Table 1. Total
costs per square foot of propagating and finishing space showed a pattern similar to cost per
square foot of total bed and bench space. All nurseries averaged $1.89, largest nurseries $1.77,
and smallest firms $2.78 (Figure 14). Highest rates averaged $5.25 per square foot. Lowest
rates were $1.49 (Figure 14).
Other things being equal, a lower cost per square foot is desirable. Problems that cause
costs per square foot to increase include inefficient planning and utilization of labor,
insufficient investment in labor saving capital items, destruction or theft of supplies and
plants, not checking for best price before purchasing needs, and not carefully managing the
nursery operation. Other causes of increased costs may not be a problem if they result in
increased revenue.




Figure 14
Costs/Square Foot of Prop. & Fin. Space
27 South Florida Foliage Nurseries, 1987

Dollars/Sq.Ft,
6.00
5.00 I- Highest Rates
5.00 .... ....... .............................. ....... ............
Lowest Rates
4.00 Non-cash costs
3. Cash Costs
2.00 .............. .......... ..... .... ____

2 007W



0.00
All Nurseries Largest Third Smallest Third




See Appendix Table 9 on page 40 for complete data.








Costs Per Dollar's Worth of Production10
Costs per dollar's worth of production (sales adjusted for changes in the value of plant
inventory during the year) is a direct measure of long-term profitability. This is calculated by
dividing the dollar costs (Appendix Table 6) by the value of own plants sold adjusted for
change in plant inventory value (Appendix Table 1). So, a $1.00 cost per dollar value of
production represents the breakeven cost level. Total costs per dollar value of production for
all foliage nurseries averaged $1.07, for the largest nurseries it was $1.08, and for the smallest
nurseries $1.49 (Figure 15). Thus, average total costs for all nurseries were 7 percent above
the breakeven level. The deficit in costs per dollar value of production for the industry
average does not actually represent a "loss" in this case, but merely a failure to meet the 12
percent return allowance for interest on capital, as will be seen in the section "Income
Summary". Current operating expenses (cash costs) were adequately covered by the value of
production for the average of all nurseries and the largest third, but not for the smallest
third.
Highest rates of costs per dollar value of production averaged $1.65. Lowest rates were a
cost of $.84, giving a profit margin of 16 cents per dollar's worth of production. (Figure 15).


Figure 15
Costs Per Dollar's Worth of Production
27 South Florida Foliage Nurseries, 1987

Dollars/Dollar
2.00

a- --na -- a n



1.00 Breakeven .. Highest Rates
SL- Lowest Rates
m i Non-cash costs
0.50 Cash Costs


0.00
All NurSeries Largest Third Smallest Third




10 See Appendix Table 10 on page 41 for complete data.








Cash Costs Per Dollar's Worth of Sales1 l
While profitability is indicated by costs per dollar of sales adjusted for changes in
inventory value, ability to meet current liabilities depends upon costs relative to cash
received. These figures were developed by dividing the dollar costs shown in Table 2 by the
value of own plants sold from Table 1. Average cash costs per dollar of sales were $.91 for
all nurseries and largest nurseries, and $1.02 for the smallest (Figure 16). These results
indicate a rather serious problem for the smallest nurseries, since they were running a deficit
of 2 cents between sales and current operating expenses. Highest cost firms averaged $1.09 per
dollar of sales, and lowest cost firms had cash costs of $.81 per dollar of sales (Figure 16).

Figure 16
Cash Costs Per Dollar's Worth of Sales
27 South Florida Foliage Nurseries, 1987

Dollars/Dollar
1.20



Breakeven Cost
1.00 -

0.90-
Highest Rates
0.80- Lowest Rates

0.70 i
All Nurseries Largest Third Smallest Third


In general, lower costs per dollar of sales are desirable. Rising costs per dollar of sales
are very common during periods of rapid expansion, because extra costs of a larger
operation are incurred before the nursery can experience accompanying extra sales. During
inflationary times, failure to get price increases as fast as costs are going up will also cause
higher costs per dollar of sales. While prices received are not always under the direct control
of the nursery operator, other things mentioned earlier are under his or her direction that
affect rates of production, level of costs, and labor efficiency. Examples include letting
plants continue to grow after reaching salable size without getting any


11 See Appendix Table 11 on page 42 for complete data.










price premium for them, letting space sit vacant too long after plants are sold, selecting
varieties that grow slower or are priced low relative to their growing time and space
requirements, having disease and quality problems that reduce the yield of salable plants,
failing to plan and manage for efficient utilization of labor, ignoring needed investments in
labor saving equipment and facilities, not shopping for the best price before purchasing
needs, experiencing theft or destruction of plants or supplies, practicing less than optimum
fertilizing and growing techniques, and pursuing less desirable markets and marketing
programs.


Income Summaryl2
This section concentrates on developing net nursery income and allocating it between
the time and effort of the owner-operator and a return on the money invested in the
operation. After all is said and done, it is for a payment on his or her time that a
nursery operator works, and it is for a return to capital that nursery operators and lending
institutions invest funds in nursery operations. The components of income are shown in
Figure 17, and the data used for the figure are arrayed in Table 3.
Table 3--Income Summary, 27 foliage nurseries in South Florida, 1987.

unit ALL Largest Smallest
Nurseries Third (10) Third (9)
.......................................................................................................
TOTAL GAIN ....... . . . $ 1,006,937 2,263,877 115,902
Total Cost Deductions. ............ (866,567) (,996,811) (115,390)
NET NURSERY INCOME . ... ...... 140,369 267,066 512
Operator's salary or time value . .... (69,387) (134,488) (25,822)
RETURN TO CAPITAL. ....... . .. S 70,982 132,577 (25,310)
% 6.38 5.59 -11.11

See Appendix Table 12 for more detail.

Total Gain
Total gain refers to the total value produced by the year's operations: the sum of plant
sales, changes in plant and supply inventory values, and miscellaneous income. Increases in
inventories of supplies averaged $253 for all nurseries, $1,777 for the largest firms. Smallest
nurseries had no increases. Miscellaneous income refers to income received from sources other
than plant sales, including rent, interest on accounts, delivery or packaging charges, and sales
of supplies. This averaged $8,463 for all nurseries, $14,558 for the largest, and $3,004 for the
smallest firms. Total gain averaged $1,006,937 for all nurseries, $2,263,877 for the largest
nurseries, and $115,902 for the smallest.


12 See Appendix Table 12 on page 43 for complete data.










Figure 17
Distribution of Total Gain
27 South Florida Foliage Nurseries, 1987

Dollars (Thousands)
2500



1500 .
*1L Return to Capital
1000 ';; \\\\ Return to Operator
Tt Expenses


500 -

-500
All Nurseries Largest Third Smallest Third


Cost Deductions and Net Nursery Income
Total costs except the operator's salary and allowance for interest on capital are
deducted from total gain to give net nursery income. Total deductions averaged $886,567 for
all nurseries, $1,996,811 for the largest firms, and $115,390 for the smallest.
Net nursery income is the total return for the year for the time and managerial skills of
the operator plus the capital invested in the operation. Average net nursery income was
$140,369 for all nurseries, $267,066 for the largest, and $512 for the smallest nurseries.


Return to Capital
From net nursery income is subtracted the salary or time value of the owner-operator
to obtain that part of net nursery income attributable to capital. This is the earnings of
the investment in the nursery. When the owner and operator are the same person, dividing
net nursery income between the operator and return to capital may not be meaningful.
However, when the owners are outside investors, accurate division is important. Average
operator salaries were given in the previous section "Costs by Expense Category." Return to
capital averaged $70,982 for all nurseries, $132,577 for the largest nurseries, and minus
$22,310 for the smallest firms.









Dividing net nursery income by the value of capital invested gives the rate of return on
the investment. Rate of return is a very commonly used indicator for evaluating an
investment or for selecting between investment alternatives. For example, this is equivalent to
the widely quoted yields for capital market instruments such as certificates of deposit,
treasury notes, and bonds, which are reported on an annualized basis unless otherwise noted.
The value of capital owned was given in Table 1. Figure 18 shows that average rate of return
on capital was 6.4 percent for all nurseries, 5.6 percent for the largest nurseries, and minus
11.1 percent for smallest. Thus, for every dollar invested in these foliage nurseries, there was
an average return of 6.4 cents. The deficit of 7 points in costs per dollar value of production
for all nurseries, as discussed above, was not a loss, but simply a return on investment less
than the 12 percent "standard" allowance which was included as a cost in the budget.
Highests rates of return on capital were 27.3 percent. Lowest rates averaged a minus
10.7 percent (Figure 18).




Figure 18
Return to Capital
27 South Florida Foliage Nurseries, 1987


Percentage Profit to Capital Owned


All Nurseries Largest Third Smallest Third















Statement of Financial Position13
The statement of financial position summarizes the assets and liabilities of foliage
nurseries. These data represent the mid-year financial situation of the nurseries, derived as an
average of the beginning of the year and ending of the year balance sheet figures. Figure 19
illustrates the major components of the statement of financial position for foliage nurseries.
Assets
Assets were classified as 'either current or long term. Current assets represent cash or
items deemed convertible to cash within one year's time. All other assets were designated as
long term assets.
Cash on hand includes funds in checking accounts, savings accounts, and money market
funds. Average cash on hand was $35,298 for all nurseries, $75,428 for the largest nurseries,
and $13,878 for the smallest firms.
Accounts receivable are uncollected payments due from all sources. The majority of
these are trade accounts for plants sold. Generally, this figure should be minimized because
uncollected funds deprive the firm of their use. Accounts receivable averaged $173,361 for all
nurseries, $425,635 for the largest, and $9,970 for the smallest firms. As a percentage of
annual sales, these amounts represented 18.1 percent, 19.5 percent, and 8.1 percent,
respectivley. So, the smallest nurseries were considerably better in collecting on account, or
were more averse to accepting sales on credit.
Inventory values include growing plants and supplies, which were presented previously in
Table 1. The combined value of inventories averaged $495,632 for all nurseries, $970,182 for
the largest firms, and $99,852 for the smallest nurseries.
Total current assets averaged $704,292 for all nurseries, $1,471,244 for the largest, and
$123,700 for the smallest nurseries.
Long term assets are investments in buildings, machinery and land that normally would
not be converted to cash within a year. Current values of investments are the original cost
less accumulated depreciation. Comparing original cost with the value remaining after
subtracting accumulated depreciation provides an idea of the degree to which capital assets
have been depleted. Original investments averaged $693,729 for all nurseries, $1,537,289 for the
largest, and $170,768 for the smallest nurseries. Subtracting accumulated depreciation left a


13 See Appendix Table 13 on page 43 for complete data.








Figure 19

Assets and Liabilities

27 South Florida Foliage Nurseries, 1987


Dollars (Thousands)


I


2000 .....


1000 h


500


0O


I1


ir:


...........


All Nurseries


2500


1500


m Current Assets
I I Long Term Assets
[ Current Liabilities
lZ Long Term Llabll.
E Net Worth


I ............. :
...............
.......... ...
. . . .
..... ........
..............
.............
... ......
..............
. .........
..........
..........
...........
...........
..........


Sm allests


Largest


I


779F5
---


I


j










current value of $408,078 for all nurseries, $902,028 for the largest, and $104,136 for the
smallest nurseries. As a percentage of the original investment, these current values
represented 58.8 percent for the average of all nurseries, 58.8 percent for the largest
nurseries, and 70.9 percent for the smallest. Thus, the smallest nurseries had the least
depleted long term assets.
Total assets. The sum of current and long term assets gives average total assets of
$1,112,370 for all nurseries, $2,373,272 for the largest, and $227,836 for the smallest
nurseries. These amounts are the same as reported for "owned capital" in Table 1.





Liabilities
Liabilities may be "current" (payable during the current year) or "long term"
(payable at some time after the current year).
Current liabilities averaged $52,403 for all nurseries, $120,603 for the largest, and $6,896
for the smallest firms. The ratio of cash and accounts receivable to current liabilities, known
as the "quick ratio", is a standard indicator of liquidity, the ability to pay current operating
expenses. The quick ratio was equally good for all groups, averaging 3.98 for all nurseries,
4.15 for the largest firms, and 3.45 for the smallest nurseries.
Long term liabilities include notes payable and mortgages. They averaged $255,241 for all
nurseries, $514,607 for the largest, and $61,486 for the smallest nurseries. The ratio of current
liabilities to long term liabilities was .21 for all nurseries, .23 for largest, and .11 for the
smallest firms.
Total liabilities. The sum of current and long-term liabilities gives average total
liabilities of $307,644 for all nurseries, $635,209 for the largest, and $68,382 for the smallest
firms. The ratio of total assets to total liabilities was quite constant across groups, 3.6, 3.7,
and 3.3, respectively, which represents an extremely sound financial position in all cases.



Net Worth
Net worth is the difference between total assets and total liabilities. This is the actual
value of the owner's share of the assets, as opposed to the lenders'claims. The average net
worth for all nurseries averaged $804,726, for the largest it was $1,738,062, and for the
smallest $159,454.















Total Profitability Model
The Total Profitability Model combines information from the operating statement and
statement of financial position in a graphical presentation to illustrate how assets, liabilities,
and profit margins work together to yield the firm's return on net worth. Figure 20 shows the
three sections of the profitability model: margin management, asset management and leverage
management. Data for the largest nurseries, all nurseries, and smallest nurseries are given in
the top, middle, and bottom of each cell in the model. Data for the all-nursery average
(middle box) will be discussed to illustrate the operation of the model.



Margin Management
From total gain of $1,006,937 is subtracted total deductions plus operator's salary to give
return to capital of $70,982. This divided by total gain yields an average net profit margin of
7.05 percent.



Asset Management
Current assets of $704,292 plus long term assets of $408,078 make total assets of
$1,112,370. This divided into total gain of $1,006,937 gives an asset turnover rate of .9052.
Asset turnover multiplied by net profit margin of 7.0 percent results in an average return to
capital of 6.38 percent.



Leverage Management
Current liabilities of $52,403 plus long term liabilities of $255,241 gives average total
liabilities of $307,644. This is subtracted from total assets to yield average net worth of
$804,726. Total liabilities plus net worth of $1,112,370 divided by net worth gives a leverage
factor of 1.3823. This is really the ratio of total assets under one's control to net worth.
Leverage times rate of return to capital of 6.38 percent gives a return on net worth of 8.82
percent.












MARGIN MANAGEMENT


NET PROFIT
MARGIN


LONG TERM ASSETS


LEVERAGE MANAGEMENT


TOTAL LIABILITIES


Figure 20.--Total profitability model, 27 foliage plant nurseries in South
Florida, 1987


RATE OF
RETURN TO
CAPITAL


RETURN ON
NET WORTH










CONCLUDING COMMENTS
Nursery operators who are interested in seeing how they compare with those
participating in the Florida Nursery Business Analysis Program may calculate their own
numbers. The Appendix tables are structured for this purpose. The formulas for making these
calculations are shown for each line in Appendix Tables 2 through 5. The results may be
written on the lines provided for this purpose on each table. Another alternative is to
acquire the University of Florida microcomputer program, FOLAGNBA.BAS, for making these
calculations. Either alternative should provide some valuable insight into the business side of
operating a foliage plant nursery. It should improve management decisions concerning things
that affect the profitability of the nursery operation.
Nursery operators who find this kind of information useful, but have difficulty finding
the time or energy to engage in the tedium of doing their own calculation may wish to
consider becoming a participant in the Florida Nursery Business Analysis Program. We need
more participants in the program to provide sounder and statistically more reliable averages. If
you would like to become a participant, contact your ornamental agent in your nearby county
Extension office, or contact the authors in Gainesville. 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.


b
!~~ ~z~-





T~?~LS~:i\~~











APPENDIX
Appendix Table of Contents
Dage
Definitions .................... .... .............. 32
Making your own calculations ........................ .... .33
Appendix Tables .................... ............... 35


List of Appendix Data Tables

Appendix Table Pane

1 Size of business, 27 foliage nurseries in South Florida, 1987 . . .... 35

2 Rates of production, 27 foliage nurseries in South Florida, 1987 . ... 35

3 Land use indicators, 27 foliage nurseries in South Florida, 1987 . ... 35

4 Labor use indicators, 27 foliage nurseries in South Florida, 1987 . ... 36

5 Capital use indicators, 27 foliage nurseries in South Florida, 1987 . ... 36

6 Costs by expense category, 27 foliage nurseries in South Florida,
1987 . . . . . . . . . 37

7 Percent of total costs by expense category, 27 foliage nurseries in South
Florida, 1987 . . . . . . ... 38

8 Costs per square foot of bed and bench space, 27 foliage nurseries in South
Florida, 1987 . . . . . . . .. 39

9 Costs per square foot of propagating and finishing space, 27 foliage nurseries
in South Florida, 1987 . . . . . . . 40

10 Costs per dollar's worth of production, 27 foliage nurseries in South
Florida, 1987 . . . . . . ... 41

11 Cost per dollar's worth of sales (no adjustment for change in plant
inventory), 27 foliage nurseries in South Florida, 1987 . . ... 42

12 Income summary, 27 foliage nurseries in South Florida, 1987 . . ... 43

13 Statement of Financial Position, 27 foliage nurseries in South Florida, 1987 .... .43











DEFINITIONS


Value of own plants sold: the value of total plant sales minus the cost of plants
purchased for immediate resale. The cost of plants purchased for growing-on are not
deducted.

Full-time equivalent employee: 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 people not paid on an hourly
basis.

Capital owned: the current value (cost less depreciation taken in prior years) of capital
assets, or current investment in the nursery operation. Related debt is not deducted in this
determination of the value of capital owned.

Capital managed: the value of capital owned plus the value of additional capital items
used and under the control of the manager. Rented land and leased buildings, equipment, etc.,
would be added to the value of capital owned to obtain the value of capital managed in the
nursery operation.

Annual turnover of capital: the percentage that results from dividing the value of own
plants sold by the value of capital (either owned or managed). It is annual plant sales stated
in terms of percent of the capital involved.

Total gain: the sum of plant sales, changes in plant and supply inventories, and
miscellaneous cash income. It represents the total effect of the year's operation, be it in the
form of cash received of in the form of change in values of inventories.

Net nursery income: the net effect of the year's operation. To obtain it, all cash costs
(except operator's salary), and all non-cash costs (except the 12 percent non-cash interest
allowance on capital) are subtracted from total gain. The result is the return for the time and
managerial skills of the operator, and for the use of the capital invested in the operation.

Return to capital: the portion of net nursery income that is left after subtracting the
salary or time value of the operator. It is what the owned capital earned.

Rate of return on capital: return to capital divided by the value of owned capital. It is
the rate earned on the capital invested.









MAKING YOUR OWN CALCULATIONS

For those who wish to analyze their own operation and compare the results with the
findings of this report, there are two options. One is a manual method. To do it manually,
you need to collect for your nursery the data shown in Appendix Tables 1 and 6. Lines are
provided for entry of your data. Then, calculate your nursery data for each line of Appendix
Tables 2, 3, 4 and 5. The formula for making that calculation is shown on each line. For
example, the first line of Appendix Table 2, "Sales per square foot growing area" shows a
formula in parentheses: Table IA/IE. The slash mark (/) stands for division. The Table IA
stands for the A line of Appendix Table 1, and IE stands for the E line. Hence, to calculate
your "Sales per square foot", divide your sales figure on line A of Appendix Table I by your
square feet of growing area on line E of Appendix Table 1. And so on for each line of
Appendix Tables 2, 3 and 4.
Calculations starting with Appendix Table 7 and continuing through Appendix Table 11
are similar. These calculations are made by dividing each line of Appendix Table 6 by the
appropriate figure as follows:

For Appendix Table 7, divide your data in Appendix Table 6 by your total all costs
figure at the bottom of Appendix Table 6.

For Appendix Table 8, divide your data in Appendix Table 6 by your square footage
figure on line E of Appendix Table 1.

For Appendix Table 9, divide your data in Appendix Table 6 by your square footage
figure on line C of Appendix Table 1.

For Appendix Table 10, divide your data in Appendix Table 6 by your total value of
production figure on line B of Appendix Table 1.

For Appendix Table 11, divide your data in Appendix Table 6 by your sales figure on
line A of Appendix Table 1

For Appendix Tables 12 and 13, formulas are not shown. However completion of your own
data set for those tables is needed in order for you to complete the profitability model in
Figure 20. Instructions for Appendix Table 12 are as follows:


Line A: Value of own plants sold . .
Line B: Change in plant inventory value .
Line C: Supply inventory increase . .


Line D: Miscellaneous income . .

* Line E: Total Gain . . . .
Line F: Deduct cash costs . . .

Line G: Deduct non-cash costs . .


* Line
Line
* Line
* Line
* Line


H: Total deductions ..
I: Net nursery income .
J: Deduct operator's salary
K: Return to capital .
L: Rate of return to capital


Appendix Table IA
Appendix Table 1B-1A
from your beginning and ending
supply inventory data, not
calculated previously
from your business records, not
shown previously
sum of lines A, B, C and D.
from Appendix Table 6 (subtract
operators salary)
from Appendix Table 6 (subtract
interest on capital)
sum lines F and G
line E minus line H
from line 1 of Appendix Table 6
line I minus line J
line K divided by Appendix Table 1
line P










Instructions for Appendix Table 13 are as follows:


Line A: Cash on hands . . .. Appendix Table I line O
Line B: Accounts Receivable . .. Appendix Table I line N
Line C: Plant inventory . . .. Appendix Table 1 lime I
Line D: Supply inventory . . .. Appendix Table 1 line M
Line E: Total current assets . ... sum lines A,B,C and D
Line F: Machinery & Equipment. . ... Appendix Table I line K
Line G: Buildings and fixtures ...... Appendix Table 1 line J
Line H: Land . . .. Appendix Table 1 line L
(Skip lines I and J if lines F, G and H are depreciated values.
If not, use these two lines to get depreciated values.)
Line K: Total long term assets ...... sum lines F,G and H
Line L: Total assets . . .... sum lines E and K
Line M: Current liabilities . ... from your records, not shown in
earlier tables
*Line N: Long term liabilities . ... from your records, not shown in
earlier tables
Line O: Total liabilities . ... sum line M and N
Line P: Net worth . . . line L minus line O
Line Q: Total liabilities and net worth. sum lines O and P

This data required for the profitability model.

A second alternative for performing your own business analysis for those of you who
have an MSDOS computer is to order IFAS microcomputer program number 003, FOLAGNBA
for a cost of $20. Mailing address is:

IFAS Software Support Office
Building 120, Room 203
University of Florida
Gainesville, FL 32611

This program still requires you to collect the same data requested for the manual
calculation method described above, but once the data is entered, all calculations will be done
automatically for you.










Appendix Table 1--Size of business, 27 foliage nurseries in South Florida, 1987.


~==== ===========s==E ==I=---------=


unit
N1


A Value of own plants sold . . .. $
B Total Value of Production. . . ... S

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

E Total bed & bench space. . . ... sq.ft.


F Total nursery area . . .
G


ALL Largest Smallest Your
nurseries Third (10) Third (9) Nursery


956,883 2,182,320 122,981
998,221 2,247,542 112,898


564,850
13,449

578,299


. . sq.ft. 694,240
acres 15.94


H Full-time equivalent persons . .


------------Capital Owned----------.
I Growing plants . . .
J Bldgs, fences, wells . . .
K Machinery & equipment . .
L Land . . . . .
M Supply inventory . . ..
N Accounts receivable . . .
0 Cash/checkbook balance . ..

P Total Owned Capital . . .
............Capital Managed........---
0 Growing plants . . .
R Bldgs, fences, wells . . .
S Machinery & equipment . .
T Land . . . . .
U Supply inventory . . .
V Accounts receivable . . .
W Cash/checkbook balance . .

X Total Managed Capital . .


. number 22.61


... 485,821
... 231,213
... 42,583
... 134,282
. 9,811
. S 173,361
. S 35,298

. .. 1,112,370


... 485,821
... 249,409
... 43,805
... 230,308
. 9,811
... 173,361
... 35,298

... $ 1,227,814


1,352,726
15,618

1,368,344

1,577,652
36.22

49.91


951,499
536,351
88,388
277,288
18,683
425,635
75,428

2,373,272


951,499
536,351
90,888
465,088
18,683
425,635
75,428

2,563,572


60,648
911

61,559

98,856
2.27

3.98


96,231
38,005
16,298
49,833
3,621
9,970
13,878

227,836


96,231
55,616
16,464
90,778
3,621
9,970
13,878

286,558


Appendix Table 2--Rates of production, 27 foliage nurseries in South Florida, 1987.
unit All Largest Smallest Your
Nurseries Third (10) Third (9) Nursery
............................................................................


Plant sales/sq.ft. bed & bench space .(Table 1A/1E) cents
Value of production/sq.ft. . .(Table 1B/1E) cents

Sales/sq.ft. prop. & finish area .(Table 1A/1C) cents
Value of prod./sq.ft. prop. & finish .(Table 1B/1C) cents


PLant sales/acre total nursery area (Table 1A/1G)
Value of production/acre. . ... (Table 1B/1G)


165.5
172.6

169.4
176.7


S 60,040
$ 62,633


159.5 199.8
164.3 183.4

161.3 202.8
166.1 186.2

60,255 54,191
62,056 49,748


Appendix Table 3--Labor Use Indicators, 27 foliage nurseries in South Florida, 1987.
unit All Largest Smallest Your
Nurseries Third (10) Third (9) Nursery


Value of plants sold/person*. ... (Table 1A/1E)
Value of production/person* . (Table 1B/1E)


$ 42,324
S 44,153


43,728 30,882
45,035 28,350


Total bed & bench space/person*. .(Table 1E/1E) sq.ft.
Prop. & finishing space/person* .(Table 1C/1E) sq.ft.
Total nursery area/person* . .(Table 1F/1E) sq.ft.


* Full-time equivalent person (2080 hours per year).


25,579
24,984
30,707


27,418
27,105
31,612


15,458
15,229
24,824


----------------------













Appendix Table 4--Space Use Indicators, 27 foliage nurseries in South Florida, 1987.

unit ALL Largest Smallest Your
Nurseries Third (10) Third (9) Nursery
........................................................... ............................................


Plant inventory turnover . .(Table 11/1A) X

Average vacant bed & bench space. . ... sq.ft.
--percentage of bed & bench space. . ... ..

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

Total bed & bench space. . . .. .sq.ft.
--percentage of total nursery area .(Table 1E/IF) X

Prop. & finishing space. .............. .sq.ft.
--percentage of total growing space. .(Table 1C/1E) X

Stock plant space . . . ... sq.ft.
--percentage of total growing space. .(Table 1D/1E) X


197.0

36,709
6.3


229.4 127.8

84,616 6,848
6.2 11.1


694,240 1,577,652


578,299 1,368,344
83.3 86.7

564,850 1,352,726
97.7 98.9


13,449
2.3


15,618
1.1


98,856


61,559
62.3

60,648
98.5

911
1.5


Appendix Table 5--Capital Use Indicators, 27 foliage nurseries in South Florida, 1987.

unit All Largest Smallest Your
Nurseries Third (10) Third (9) Nursery
----------------------------------------.------------------.--..........................................


Owned capital turnover. . ... (Table 1A/1P)
Managed capital turnover . (Table 1A/1X)

Capital owned/person* . .. (Table 1P/1H)
Capital managed/person* . .. (Table 1X/1H)

Capital owned/acre. . ... (Table 1P/1G)
Capital managed/acre. . ... (Table 1X/1G)


% 86.0
X 77.9

S 49,202
S 54,308

$ 69,796
S 77,039


92.0
85.1


54.0
42.9


47,554 57,213
51,368 71,959

65,528 100,394
70,782 126,269


---managed capital per person* ir
Growing plants. . . .
BLdgs, fences, wells. . .
Machinery & equipment . .
Land . . . .
Accounts receivable . .
-------- managed capital per acre
Growing plants . . .
BLdgs, fences, wells. . .
Machinery & equipment . .
Land. . . . .
Accounts receivable . .


I- -


(Table
(Table
(Table
(Table
(Table


in--------
(Table
. (Table
. (Table
S. (Table
S. (Table


----.. percent capital managed in-------
in growing plants . ... (Table
in buildings & wells . ... (Table
in machinery & equipment. . ... (Table
in Land . . . .. (Table
in supply inventory . ... (Table
in accounts receivable. . .. (Table
in cash/checkbook balance . .. (Table


1Q/1H)
1R/1H)
1S/1H)
1T/1H)
1V/1H)


10/1G)
1R/1G)
1S/1G)
1T/1G)
1V/1G)


10/1x)
1R/1X)
1S/IX)
1T/1X)
1U/1X)
1V/1X)
1V/IX)
Iw/Ix)


TOTAL . . . . . .


21,489
11,032
1,938
10,187
434


30,483
15,649
2,749
14,451
616


X 39.6
X 20.3
% 3.6
% 18.8
% 0.8
X 14.1
% 2.9

% 100.0


* Full-time equivalent person (2080 hours per year).


19,066
10,747
1,821
9,319
374


26,271
14,809
2,509
12,841
516


37.1
20.9
3.5
18.1
0.7
16.6
2.9

100.0


24,165
13,966
4,134
22,796
909


42,403
24,507
7,255
40,000
1,596


33.6
19.4
5.7
31.7
1.3
3.5
4.8

100.0











Appendix Table 6--Costs by expense category, 27 foliage nurseries in South Florida, 1987.


unit All Largest Smallest Your
Nurseries Third (10) Third (9) Nursery
.......................................................................................................


Operator's salary . . . .
Other wages . . . . .

LABOR TOTAL . . . . .


Plants & seeds . . .
Containers . . .
Heating fuel. . . .
Peat & soi . . . .
Fertilizers & Lime . .
Pesticides & chemicals . .
Shipping supplies . . .
Other production supplies . .

SUPPLIES TOTAL . . .


. S
. S

. S

. $
. S
. S
S. -S

--S


Facility repairs . . . .
Equipment operation . . . .

OTHER PRODUCTION COSTS TOTAL . . .

Travel . . . . . .
Insurance . . . . .
Telephone . . . . .
Electricity . . . . .
Taxes & Liscenses . . . .
Advertising . . . . .
Rent-Land/buildings . . . .
Other cash costs . . . .

ADMINISTRATIVE & OVERHEAD COSTS TOTAL . .

TOTAL CASH COSTS . . . .

Depreciation-machinery/equipment . .
Depreciation-buildings/etc . . .
Supply inventory decrease . . .
Interest on capital . . . .

TOTAL NON-CASH COSTS . . . .

TOTAL ALL COSTS . . . . .


69,387
281,799

351,187

133,014
38,490
7,367
32,327
24,786
25,903
33,718
29,143

324,746

38,591
10,009

48,599

11,258
23,843
9,623
7,057
7,790
10,076
9,407
65,357

144,411

868,944

24,426
42,585
0
133,484

200,495

1,069,439


134,488
654,356

788,845

304,788
84,053
17,715
71,730
57,359
62,976
80,851
65,652

745,123

94,308
18,989

113,297

23,187
55,277
20,209
14,687
16,704
23,907
21,218
156,636

331,823

1,979,088

54,288
97,923
0
284,793

437,004

2,416,092


25,822
33,740

59,562

13,219
6,872
1,152
6,114
3,908
2,575
3,150
4,384

41,373

3,727
2,381

6,107

1,705
3,572
1,453
1,638
2,233
1,506
2,370
4,005

18,483

125,525

5,738
9,698
251
27,340

43,027

168,552












Appendix Table 7--Percent of total costs by expense category, 27 foliage nurseries in
South Florida, 1987.

unit ALL Largest Smallest Your
Nurseries Third (10) Third (9) Nursery

Operator's salary . . . .. % 6.5 5.6 15.3
Other wages . . . . ... X 26.4 27.1 20.0

LABOR TOTAL ................... X 32.8 32.6 35.3

Plants & seeds. . . . ... X 12.4 12.6 7.8
Containers. . . . . ... X 3.6 3.5 4.1
Heating fuel. . . . . ... X 0.7 0.7 0.7
Peat & soil . . ........ X 3.0 3.0 3.6
Fertilizers & lime. . . . ... X 2.3 2.4 2.3
Pesticides & chemicals. . . ... X 2.4 2.6 1.5
Shipping supplies . . . .. 3.2 3.3 1.9
Other production supplies .... . .... X 2.7 2.7 2.6

SUPPLIES TOTAL. . . . ... X 30.4 30.8 24.5

Facility repairs. . . . ... 3.6 3.9 2.2
Equipment operation . . . ... X 0.9 0.8 1.4

OTHER PRODUCTION COSTS TOTAL. .......... X 4.5 4.7 3.6

Travel. . . . . ... 1.1 1.0 1.0
Insurance . . . .... 2.2 2.3 2.1
Telephone . . . .... 0.9 0.8 0.9
Electricity . . . .... X 0.7 0.6 1.0
Taxes & Liscenses . . . .... X 0.7 0.7 1.3
Advertising . . . . X 0.9 1.0 0.9
Rent-land/buildings . . . ... X 0.9 0.9 1.4
Other cash costs. . . . ... X 6.1 6.5 2.4

ADMINISTRATIVE & OVERHEAD COSTS TOTAL ...... % 13.5 13.7 11.0

TOTAL CASH COSTS. .......... .. .... 81.3 81.9 74.5

Depreciation-machinery/equipment . ... 2.3 2.2 3.4
Depreciation-buildings/etc. . . .. X 4.0 4.1 5.8
Supply inventory decrease . . ... X 0.0 0.0 0.1
Interest on capital . . . ... X 12.5 11.8 16.2

TOTAL NON-CASH COSTS. ................ .X 18.7 18.1 25.5

TOTAL ALL COSTS . . . .... X 100.0 100.0 100.0











Appendix Table 8--Costs per square foot bed and bench space, 27 foliage nurseries in
South Florida, 1987.
--------------------------------------------------------------


unit ALL Largest
Nurseries Third (10)
..............................................


Operator's salary . . . ... .cents
Other wages . . . . ... cents


LABOR TOTAL . .

Plants & seeds . .
Containers . .
Heating fuel . .
Peat & soil . .
Fertilizers & Lime .
Pesticides & chemicals. .
Shipping supplies .
Other production supplies

SUPPLIES TOTAL . .


.cents

.cents
.cents
.cents
.cents
.cents
.cents
.cents
.cents

.cents


Facility repairs. . . . ..cents
Equipment operation . . ... .cents

OTHER PRODUCTION COSTS TOTAL. . . .cents


Travel. . . . .
Insurance . . . .
Telephone . . . .
Electricity . . . .
Taxes & liscenses . . .
Advertising . . . .
Rent-land/buildings . . .
Other cash costs . . .

ADMINISTRATIVE & OVERHEAD COSTS TOTAL .

TOTAL CASH COSTS . . .

Depreciation-machinery/equipment .
Depreciation-buildings/etc. . .
Supply inventory decrease . .
Interest on capital . . .


12.0
48.7

60.7

23.0
6.7
1.3
5.6
4.3
4.5
5.8
5.0

56.2

6.7
1.7

8.4


S. cents 1.9
. .cents 4.1
. cents 1.7
. .cents 1.2
. .cents 1.3
. .cents 1.7
. .cents 1.6
. .cents 11.3

. .cents 25.0

. .cents 150.3


.cents
.cents
.cents
.cents


TOTAL NON-CASH COSTS. . . . .cents

TOTAL ALL COSTS . . . ..cents


4.2
7.4
0.0
23.1

34.7

184.9


9.8
47.8

57.6

22.3
6.1
1.3
5.2
4.2
4.6
5.9
4.8

54.5

6.9
1.4

8.3

1.7
4.0
1.5
1.1
1.2
1.7
1.6
11.4

24.2

144.6

4.0
7.2
0.0
20.8

31.9

176.6


Smallest Your
Third (9) Nursery


41.9
54.8

96.8

21.5
11.2
1.9
9.9
6.3
4.2
5.1
7.1

67.2

6.1
3.9

9.9

2.8
5.8
2.4
2.7
3.6
2.4
3.8
6.5

30.0

203.9

9.3
15.8
0.4
44.4

69.9

273.8











Appendix Table 9--Costs per square foot of propagating & finishing space, 27 foliage nurseries in
South Florida, 1987.
-------=====-===--===-================---------------------


unit ALL Largest
Nurseries Third (10)
..............................


Smallest Your
Third (9) Nursery


Operator's salary . . . cents
Other wages . ...... . .. cents


LABOR TOTAL . .. . . .

Plants & seeds . .. . ..
Containers . . . .
Heating fuel . . . .
Peat & soil . . . ...
Fertilizers & time . . ...
Pesticides & chemicals . . .
Shipping supplies . . . .
Other production supplies . . .

SUPPLIES TOTAL .... . . .


.cents

.cents
.cents
.cents
.cents
.cents
.cents
.cents
.cents

.cents


Facility repairs . . ... .. ..cents
Equipment operation ........ .. .cents


OTHER PRODUCTION COSTS TOTAL . . .

Travel . . . . . .
Insurance . . .. . .
Telephone . . . ..
Electricity . . . . .
Taxes & liscenses . . . ...
Advertising . . . . .
Rent-land/buildings . . . .
Other cash costs . . . .

ADMINISTRATIVE & OVERHEAD COSTS TOTAL . .

TOTAL CASH COSTS . . ......


Depreciation-machinery/equipment.
Depreciation-buildings/etc. .
Supply inventory decrease .
Interest on capital . .


.cents


12.3
49.9

62.2

23.5
6.8
1.3
5.7
4.4
4.6
6.0
5.2

57.5

6.8
1.8

8.6


.cents 2.0
.cents 4.2
.cents 1.7
.cents 1.2
.cents 1.4
.cents 1.8
.cents 1.7
.cents 11.6

.cents 25.6

.cents 153.8


.cents
.cents
.cents
.cents


TOTAL NON-CASH COSTS. . . .. cents

TOTAL ALL COSTS ............ ... .. cents


4.3
7.5
0.0
23.6

35.5

189.3


9.9
48.4

58.3

22.5
6.2
1.3
5.3
4.2
4.7
6.0
4.9

55.1

7.0
1.4

8.4

1.7
4.1
1.5
1.1
1.2
1.8
1.6
11.6

24.5

146.3

4.0
7.2
0.0
21.1

32.3

178.6


42.6
55.6

98.2

21.8
11.3
1.9
10.1
6.4
4.2
5.2
7.2

68.2

6.1
3.9

10.1

2.8
5.9
2.4
2.7
3.7
2.5
3.9
6.6

30.5

207.0

9.5
16.0
0.4
45.1

70.9

277.9











Appendix Table l0--Costs per dollar's worth of production, 27 foliage nurseries in
South Florida, 1987.
=============================================I'=========================


unit ALL Largest
Nurseries Third (10)
...............................


Smallest Your
Third (9) Nursery


Operator's salary . . . .
Other wages . . . . .

LABOR TOTAL . . . . .

Plants & seeds . . . .
Containers . . . . .
Heating fuel.. .................
Peat & soil . . . . .
Fertilizers & Lime . . . .
Pesticides & chemicals . . .
Shipping supplies . . . .
Other production supplies . . .

SUPPLIES TOTAL . . . .

Facility repairs . . . .
Equipment operation . . . .

OTHER PRODUCTION COSTS TOTAL . . .

Travel. . . . . .
Insurance . . . . .
Telephone . . . . .
Electricity . . . . .
Taxes & Liscenses . . . .
Advertising . . . . .
Rent-land/buildings . . . .
Other cash costs . . . .

ADMINISTRATIVE & OVERHEAD COSTS TOTAL . .

TOTAL CASH COSTS . . . .

Depreciation-machinery/equipment . .
Depreciation-buildings/etc. . . .
Supply inventory decrease . . .
Interest on capital . . . .

TOTAL NON-CASH COSTS . . .

TOTAL ALL COSTS . . . .


.cents
.cents

.cents

.cents
.cents
.cents
.cents
.cents
.cents
.cents
.cents

.cents

.cents
.cents

.cents


7.0
28.2

35.2

13.3
3.9
0.7
3.2
2.5
2.6
3.4
2.9

32.5

3.9
1.0

4.9


.cents 1.1
.cents 2.4
.cents 1.0
.cents 0.7
.cents 0.8
.cents 1.0
.cents 0.9
.cents 6.5

.cents 14.5

.cents 87.0


.cents
.cents
.cents
.cents

.cents

.cents


2.4
4.3
0.0
13.4

20.1

107.1


6.0
29.1

35.1

13.6
3.7
0.8
3.2
2.6
2.8
3.6
2.9

33.2

4.2
0.8

5.0

1.0
2.5
0.9
0.7
0.7
1.1
0.9
7.0

14.8

88.1

2.4
4.4
0.0
12.7

19.4

107.5


22.9
29.9

52.8

11.7
6.1
1.0
5.4
3.5
2.3
2.8
3.9

36.6

3.3
2.1

5.4

1.5
3.2
1.3
1.5
2.0
1.3
2.1
3.5

16.4

111.2

5.1
8.6
0.2
24.2

38.1

149.3











Appendix Table 11--Costs per dollar of sales, 27 foliage nurseries in South Florida, 1987.

==================----------===---==-=== -------------------


unit All Largest
Nurseries Third (10)
........................................


Smallest Your
Third (9) Nursery


Operator's salary . . . .. cents
Other wages . ..... . cents


LABOR TOTAL . .. . .

Plants & seeds . . . .
Containers . .. . ...
Heating fuel . .... . .
Peat & soil . .. . .
Fertilizers & lime . . ..
Pesticides & chemicals . . .
Shipping supplies . .. . .
Other production supplies . . .

SUPPLIES TOTAL. . .. . .

Facility repairs . .. . .
Equipment operation . . . .

OTHER PRODUCTION COSTS TOTAL . ...


Travel .... . . ...
Insurance . . . .
Telephone .. . . . .
Electricity . . . ..
Taxes & liscenses . . . .
Advertising . . . .
Rent-land/buildings . . .
Other cash costs . . .

ADMINISTRATIVE & OVERHEAD COSTS TOTAL .

TOTAL CASH COSTS . . .


Depreciation-machinery/equipment . .
Depreciation-buildings/etc . ..
Supply inventory decrease . . .
Interest on capital . . .

TOTAL NON-CASH COSTS . . . .

TOTAL ALL COSTS . .. . .


.cents

.cents
.cents
.cents
.cents
.cents
.cents
.cents
.cents


. .cents

Scents
. cents

. cents


7.3
29.4

36.7

13.9
4.0
0.8
3.4
2.6
2.7
3.5
3.0

33.9

4.0
1.0

5.1


.. .cents 1.2
. .cents 2.5
. cents 1.0
. .cents 0.7
. cents 0.8
. ..cents 1.1
. .cents 1.0
. .cents 6.8

. .cents 15.1

. .cents 90.8


.cents 2.6
.cents 4.5
.cents 0.0
.cents 13.9

.cents 21.0

.cents 111.8


6.2
30.0

36.1

14.0
3.9
0.8
3.3
2.6
2.9
3.7
3.0

34.1

4.3
0.9

5.2

1.1
2.5
0.9
0.7
0.8
1.1
1.0
7.2

15.2

90.7

2.5
4.5
0.0
13.0

20.0

110.7


21.0
27.4

48.4

10.7
5.6
0.9
5.0
3.2
2.1
2.6
3.6

33.6

3.0
1.9

5.0

1.4
2.9
1.2
1.3
1.8
1.2
1.9
3.3

15.0

102.1

4.7
7.9
0.2
22.2

35.0

137.1








Appendix Table 12--Income summary, 27 foliage nurseries in South Florida, 1987.
===============-======-===========-=====--------------------------------------------
unit ALL Largest Smallest Your
Nurseries Third (10) Third (9) Nursery
.......................................................................................................


A Value of own plants sold . . .
B Change in plant inventory value. . .
C Increase in supply inventory . . .
D Miscellaneous cash income . . .

E TOTAL GAIN . . . . .

F Deduct cash costs except operator's salary .
G Deduct non-cash costs except interest. .

H Total Deductions . . . .

I NET NURSERY INCOME . . . .
J Operator's salary or time value. . .

K RETURN TO CAPITAL. . . . .


S 956,883
S 41,338
$ 253
S 8,463

S 1,006,937

$ (799,556)
$ (67,011)

$ (866,567)

$ 140,369
S (69,387)

S 70,982
X 6.38


2,182,320
65,222
1,777
14,558

2,263,877

(1,844,600)
(152,212)

(1,996,811)

267,066
(134,488)

132,577
5.59


122,981
(10,083)
0
3,004

115,902

(99,703)
(15,687)

(115,390)

512
(25,822)

(25,310)
-11.11


Appendix Table 13--Statement of financial position, 27 foliage nurseries in South Florida, 1987.
======================================0=======-====================== ..


unit All
Nurseries


Largest Smallest Your
Third (10) Third (9) Nursery


CURRENT ASSETS- - - - -
A Cash/checkbook balance . . . .
B Accounts receivable . . . .
C Plant inventory value . . . .
D Supply inventory value . . . .

E Total CURRENT Assets . . . .

LONG TERM ASSETS- - - -- - -
F Machinery & Equipment . . . .
G Buildings & Fixtures . . . .
H Land . . . . . .

I Sub-total (original cost) . . .

J Less Accumulated Depreciation . . .

K Total LONG TERM Assets . . . .

L TOTAL ASSETS . . . . .


M Current Liabilities . . . .
N Long Term Liabilities . . .

0 Total LIABILITIES . . . .

P NET WORTH . . . . .

0 TOTAL LIABILITIES & NET WORTH . . .


S

S


S

$
$
$

S
S
S
5


35,298
173,361
485,821
9,811

704,292


172,355
387,091
134,282

693,729

(285,651)

408,078

1,112,370


$ 52,403
$ 255,241

S 307,644

S 804,726

$ 1,112,370


75,428
425,635
951,499
18,683

1,471,244


383,054
876,946
277,288

1,537,289

(635,261)

902,028

2,373,272


120,603
514,607

635,209

1,738,062

2,373,272


13,878
9,970
96,231
3,621

123,700


38,057
82,877
49,833

170,768

(66,632)

104,136

227,836


6,896
61,486

68,382

159,454

227,836


==============E=9=======================





:: j~n t~YUS~T~~U Ic ~.. F l .b'l CPn*k o Lbi ..)
:,wl'
M RO :!i '


7 --t

i:40