• TABLE OF CONTENTS
HIDE
 Front Cover
 Acknowledgement
 Table of Contents
 List of Figures
 List of appendix tables
 Introduction
 Data and results
 Productivity indicators
 Costs of production
 Cost efficiency
 Income summary
 Statement of financial positio...
 Total profitability model
 Total profitability model
 Definitions
 Appendix tables
 Back Cover














Title: Business analysis of foliage plant nurseries in south Florida
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Permanent Link: http://ufdc.ufl.edu/UF00026141/00008
 Material Information
Title: Business analysis of foliage plant nurseries in south Florida
Series Title: Economic information report
Alternate 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
Food and Resource Economics Dept., Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville
Publication Date: 1988 (Circular 866)
Copyright Date: 1989
Frequency: annual
regular
 Subjects
Subject: 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 )
 Notes
Additional Physical Form: Electronic reproduction of copy from George A. Smathers Libraries, University of Florida also available.
Dates or Sequential Designation: 1980-
General Note: Title from cover.
 Record Information
Bibliographic ID: UF00026141
Volume ID: VID00008
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: ltqf - AAB7744
notis - ABU5740
alephbibnum - 000318891
oclc - 09221698
 Related Items
Preceded by: Business analysis of south Florida foliage plant nurseries

Table of Contents
    Front Cover
        Page i
    Acknowledgement
        Page ii
    Table of Contents
        Page iii
        Page iv
    List of Figures
        Page v
    List of appendix tables
        Page vi
    Introduction
        Page 1
    Data and results
        Page 2
        Page 3
        Page 4
        Page 5
    Productivity indicators
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
    Costs of production
        Page 11
        Page 12
    Cost efficiency
        Page 13
        Page 14
    Income summary
        Page 15
        Page 16
        Page 17
    Statement of financial position
        Page 18
        Page 19
    Total profitability model
        Page 20
        Page 21
        Page 22
    Total profitability model
        Page 23
    Definitions
        Page 24
        Page 25
    Appendix tables
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
        Page 35
        Page 36
        Page 37
    Back Cover
        Page 38
Full Text
December 1989


Circular 866


Business Analysis of
Foliage Plant Nurseries in
South Florida,1988


J. Robert Strain
Alan Hodges


A[R12 19?


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









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 Loretta Hodyss, DeArmand
Hull, 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.









South Florida Foliage


TABLE OF CONTENTS


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 .............................
M monthly sales ............................
Land, Labor and Capital .......................
Land: bed and bench space ................... .
Labor: full-time equivalent persons ..............
Capital: owned and managed ..................
Productivity Indicators ...........................
Land U se .................................
Labor U se .................................
Capital U se ................................
Capital turnover ...........................
Capital managed per person ..................
Capital managed per acre ...................
Distribution of managed capital ................
Costs of Production .............................
Costs by Expense Category .....................
Salaries and wages ..........................
Production supplies ........................
Other production costs ......................
Administrative and overhead ...................
Total cash costs ............................
Non cash costs ............................
Total costs ...............................
Costs as a Percent of the Total Cost ...............
Salaries and wages ..........................
Production supplies ........................
Other production costs .......................
Administrative and overhead ...................
Total cash costs ............................
Non cash costs ............................
Cost Efficiency ............................ ..
Cost Per Square Foot of Bed and Bench Space ........
Cost Per Square Foot of Propagating and Finishing Space .
Cost Per Dollar's Worth of Production .............
Cost Per Dollar's Worth of Sales .................


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South Florida Foliage


TABLE OF CONTENTS (Continued)


Income Summary ...................
Total Gain ......................
Cost Deductions and Net Nursery Income


Return on Capital ......
Statement of Financial Position
Assets ...............
Cash on hand .......
Accounts receivable ...
Inventory values ......
Total current assets .
Long term assets ...
Total assets .........
Liabilities ............
Current liabilities .....
Long term liabilities ...
Total liabilities .......
Net Worth ............
Total Profitability Model ...
Margin Management .....
Asset Management ......
Leverage Management ..
CONCLUDING COMMENTS ..
APPENDIX ...............
Definitions ..............
Making your own calculations .
Appendix Tables ..........


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South Florida Foliage


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 M 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 Space
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 M odel ..................................................


LIST OF TABLES


Table


1 Sales, growing area, people and capital, 32 foliage nurseries in South Florida, 1988 ...........
2 Costs of production, 32 foliage nurseries in South Florida, 1988 .........................
3 Income summary, 32 foliage nurseries in South Florida, 1988 ..........................


I J//If.


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vi South Florida Foliage

LIST OF APPENDIX DATA TABLES
Appendix Table Page

1 Size of business, 32 foliage nurseries in South Florida, 1988 .......................... 26
2 Rates of production, 32 foliage nurseries in South Florida, 1988 ........................ 27
3 Labor use indicators, 32 foliage nurseries in South Florida, 1988 ........................ 27
4 Land use indicators, 32 foliage nurseries in South Florida, 1988 ........................ 27
5 Capital use indicators, 32 foliage nurseries in South Florida, 1988 ....................... 28
6 Costs by expense category, 32 foliage nurseries in South Florida, 1988 ................... 29
7 Percent of total costs by expense category, 32 foliage nurseries in South Florida, 1988 ......... 30
8 Costs per square foot of bed and bench space, 32 foliage nurseries in South Florida, 1988 ...... 31
9 Costs per square foot of propagating and finishing space, 32 foliage nurseries in South Florida, 1988 32
10 Costs per dollar's worth of production, 32 foliage nurseries in South Florida, 1988 ........... 33
11 Cost per dollar's worth of sales (no adjustment for change in plant
inventory), 32 foliage nurseries in South Florida, 1988 ............................ 34
12 Income summary, 32 foliage nurseries in South Florida, 1988 .......................... 35
13 Statement of financial position, 32 foliage nurseries in South Florida, 1988 ........... : ..... 35
14 Financial ratios and other profitability indicators, 32 foliage nurseries in South Florida, 1988 .... 36






South Florida Foliage


BUSINESS ANALYSIS OF FOLIAGE NURSERIES IN SOUTH FLORIDA, 19881
J. Robert Strain and Alan Hodges2


INTRODUCTION
This publication contains information on sales,
costs, returns and production efficiency for 32
wholesale foliage plant nurseries in South Florida
for 1988. Other publications in the Florida Nursery
Business Analysis series include reports on Central
Florida foliage plant nurseries, Dade County, 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.


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. Participating firms were located in
Dade, Broward, and Palm Beach counties.

Data were collected for the 1988 tax year.- In
most cases, this was for January through December.
For others, data for fiscal years ending after July 1,
1987, and before July 1, 1989 were included as 1988
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 the absence of detailed cost
accounting records, a commonly accepted method of
evaluating inventory for an ongoing concern is to
value all plants at 50 percent of their wholesale price
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 current value of land, particularly for
older firms.

The tables and figures present average values for
all 32 nurseries, for the average of the 11 largest


1. This document was published as Economic Information Report 268, Florida Cooperative Extension Service, Institute of Food and
Agricultural Sciences, University of Florida, Gainesville, December 1989.
2. J. Robert Strain is an Extension Economist and Alan Hodges is an Economist Analyst, both in IFAS, Food and Resource Economics
Department, Gainesville, FL 32611.






South Florida Foliage


firms, and for the 10 smallest firms. All firms in the
largest group had sales of own plants greater than
$750,000, while all firms in the smallest group had
sales less than $250,000. 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 (10) for the particular
measure, and the lower line designated "lowest rates"
is the average for the lowest third (10). Nursery
operators received an analysis for their own
operation, which contained similar information as
used in this report, shortly after submitting data.


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 Business
Appendix Table 1 (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 $1,290,181 for all nurseries, $3,153,585 for
the largest nurseries, and $145,699 for the smallest
nurseries (Table 1).


Total value of production during the year adjusts
sales for change in the value of the plant inventory.
Plant inventory increased for the average of all
nurseries by $40,125, for the largest firms by $69,677,
and for the smallest nurseries by $12,642, giving a
total value of production of $1,330,306, $3,223,262
and $158,341 respectively (Table 1).

Monthly sales. Figure 2 shows the pattern of
monthly sales for all nurseries, largest nurseries and
smallest nurseries. For all nurseries, highest sales
occurred during the months of March, April, and
May. Sales for these months accounted for 29.5
percent of the year's total sales. Sales for April, the
highest month, averaged $136,226, which was 39
percent greater than those for November, the lowest
month ($98,017).







South Florida Foliage


Table 1--Sales, bed and bench space, people, and capital: 32 foliage nurseries in South Florida, 1988


All 32 Largest Smallest
unit Nurseries Third (11) Third (10)

Value of own plants sold . . . .... S 1,290,181 3,153,585 145,699
Change in inventory value. . . . ... 40,125 69,677 12,642

Total value of production. . . . ... S 1,330,306 3,223,262 158,341

Total bed and bench space. . . . . .sq.ft. 732,509 1,814,660 86,776

Full-time equivalent persons . . . .number 25.65 60.59 4.08

Total Owned Capital. . . . . . ... S 1,535,302 3,483,604 292,812
Total Leased Capital . . . . ... .S 110,322 189,591 25,400

Total Managed Capital. . . . . ... 1,645,625 3,673,195 318,212





Figure 1

Sales and Value of Production

32 South Fla. Foliage Nurseries, 1988


Dollars CMillions)

I ...-............ -............ ................. ...... -.... ........q


All Nurseries

M Sales


Largest Third Smallest Third

M- 'Value of Production


3.50

3.00

2.50

2.00

1.50

1.00

0.50

0.00


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


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


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






South Florida Foliage


Land, Labor and Capital

Land: bed and bench space. Total bed and bench
space averaged 732,509 square feet for all nurseries,
1,814,660 square feet for the largest nurseries, and
86,776 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 713,476 square feet for all
nurseries, 1,792,169 square feet for the largest
nurseries, and 82,746 square feet for the smallest
nurseries. Stock plant area is bed and bench space
used exclusively for production of plant propagating
material. This area averaged 19,032 square feet for
all nurseries, 22,491 square feet for the largest firms,
and 4,029 square feet for the smallest nurseries.
Total nursery area, which includes drives, roads,
parking lots, office, packing house and the like,
averaged 21.1 acres for all nurseries, 50.0 acres for
the largest firms, and 3.3 acres for the smallest.

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 25.7. For the largest it was 60.6,
and for the smallest nurseries it was 4.1 (Table 1
and Figure 4).

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, supply inventory and cash on
hand. Capital owned averaged $1.535 million for all
nurseries, $3.484 million for the largest firms, and
$292,812 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 $1.646 million
for all nurseries, $3.673 million for the largest
nurseries, and $318,212 for the smallest nurseries
(Table 1 and Figure 5).


Figure 2

Monthly Sales
32 South Fla. Foliage Nurseries, 1988


Dollars (thousands)


Largest
SAl Il Nurseries
- Smallest


Aug Sep Oct Nov Dec


n Fe Ap y Jun J
Jan Feb Mar Apr May Jun Jul


Month


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

..... .............................................................. ................................... -
...........................

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

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

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

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


0'






South Florida Foliage


Figure 3

Land: Bed and Bench Space
32 South Fla. Foliage Nurseries, 1988


Square Feet Cthousands]
2,000



1 ,5 00 .................................................................



1,000 -



500



0
All Nurseries Largest Third Smallest Third



Figure 4

Labor: Number of Persons
32 South Fla. Foliage Nurseries, 1988


Ful l-time Equiv. Persons C2080 hrs/yr)
70

60 -..........................................


3 0 ................................................................... i .....................................................................






0
10

0


All Nirserles Largest Third SnBllest Third


A I I Nurser les


Largest Third


Sma I lest Third






South Florida Foliage


Figure 5

Capital Managed
32 South Fla. Foliage Nurseries, 1988


Dollars (Mi l ions)


3.0 I ...


2 .0 ................


1 .o --


0.0
AII NLrseries Largest Third Smallest Third
Capital managed is owned plus leased.


F9 capItal Leased
- capital Owned


Productivity Indicators

Land Use (Appendix Tables 2 and 3)
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 $1.86 for all nurseries, $1.80 for
the largest firms, and $1.91 for the smallest.

Value of production per square foot of total bed
and bench space (includes stock plant space) was
$1.82 for all nurseries, $1.78 for the largest firms,
and $1.82 for the smallest (Figure 6). Firms with
the highest annual rates of production averaged
$4.73 per square foot, while those with the lowest
averaged $0.92 per square foot.

The average value of production per acre of total
nursery area (includes non-growing areas such as
office, parking, packing house, walkways, driveways),
was $62,971 for all nurseries, $64,411 for the largest


nurseries, and $47,991 for the smallest nurseries.

In general, increased sales per square foot of
production area will increase the profitability of a
nursery operation. However, this does not assure
high profitability. Lower sales per square foot of
bed and bench space can result from a number of
things: plants remaining after reaching salable size,
high amount of vacant space, slow-growing plant
varieties, and 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.

Inventory value of growing plants per square foot
in production is another indicator of efficiency in the
use of space. This averaged $1.12 for all nurseries,
$1.00 for the largest nurseries, and $1.18 for the
smallest 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.






South Florida Foliage


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 158 percent. This means that annual plant sales
amounted to 1.58 times the average value of plant
inventory. Largest nurseries had plant inventory
turnover of 175 percent, and smallest nurseries had
142 percent. Vacant bed and bench space averaged
6.1 percent of the total for all nurseries (Appendix
Table 3).

Labor Use (Appendix Table 4).
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 $51,872 per person for all nurseries,
$53,197 for the largest firms, and $38,793 for the
smallest (Figure 7). Highest rates of production per
person averaged $93,257 per person, and lowest rates
were $31,435.

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 28,562
square feet for all nurseries, 29,949 square feet for
the largest firms, and 21,260 square feet for the
smallest. Stated another way, the number of persons
per acre of bed and bench space averaged 1.21 for
all nurseries and the largest nurseries, and 1.24 for
the smallest nurseries.

If all other things are equal, higher sales per
person involved is desirable, but this measure should
be viewed together with other indicators, such as
production rate, space use intensity, capital turnover,
and costs per square foot. High sales per person
can be less than optimal if the number of persons is
too small for the volume of plants handled or space
tended, resulting in low space use efficiency, poor
plant care, or lower product quality.

Lower sales per person can result during periods
of rapid expansion when extra help is needed before
plants reach salable size. Lower sales per person
can also result during difficult economic times when
sales are slow. Variations among nurseries can be
the result of differences in investment in labor-
saving capital items, labor management practices, or
other practices affecting crop turnover rate.


Figure 6

Land Use: Value of Production/Sq. Ft.
32 South Fla. Foliage Nurseries, 1988

Do Ilars/Sq.Ft.
5.00


4.00 -.........


3.00 ............. ... ...
SHighest Rates
Lowest Rates
1 0 RIM ............. .
2.00



0.00
AlI Nurseries Largest SnrI lest






South Florida Foliage


Figure 7


Labor Use: Value


of Production/Person


32 South Fla. Foliage Nurseries,


Do llars/Employee Equivalent
I rl "1 "


80 .........................................


20 H -- --.........


CThousands)


l Highest Rates
Lowest Rates


AI I NurserTes Laroest


Capital Use (Appendix Table 5)

Capital Turnover. Annual turnover of owned
capital value results from dividing the value of own
plants sold by the value of capital owned. Capital
turnover for all nurseries averaged 84.0 percent, for
the largest nurseries 90.5 percent, and for smallest
49.8 percent (Figure 8). This means that for the
average of all nurseries and largest nurseries, annual
sales were nearly equal to the capital investment, and
for the smallest nurseries, sales were about one half
of capital invested in the nursery. Highest capital
turnover rates averaged 119 percent and lowest rates
averaged 42 percent.

In general, larger percentage turnover numbers
are desirable, for they indicate greater sales per
dollar of investment in the nursery. Problems that
cause a lower turnover rate include any of the items
already mentioned that lower production rate, and
therefore lower 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 will also tend to lower the captial
turnover rate.


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 $64,167 for all
nurseries, $60,622 for the largest nurseries, and
$77,960 for the smallest nurseries (Figure 9).
Highest rates for capital managed per person
averaged $151,251, and lowest rates were $47,646
(Figure 9).

Capital Managed Per Acre. Capital managed per
acre of total nursery area averaged $77,896 per acre
for all nurseries, $73,403 for the largest firms, and
$96,446 for the smallest firms (Figure 10). Highest
rates of capital managed per acre were $188,059 and
lowest rates averaged $53,695 (Figure 10).


1988


Sma I lest


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


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










Figure 8

Capital Turnover

32 South Fla. Foliage Nurseries, 1988


Sales as a Percentage of Capital Owned


140%

120%

100%

0B%

60%

40%

2096

0%


All WrL~erfeel-aroest Srrm I I et


S Highest Rates

Lowest Rates


South Florida Foliage


Figure 9

Capital Managed Per Person
32 South Fla. Foliage Nurseries, 1988


Dollars per Person CThousands)
160

140 .............. ....... ....... ........

120 ...... ......... .................
100 .
SHighest Rates
Lowest Rates
60 ......................................

40


0

All Nurseries Largest Sml lest






South Florida Foliage


Figure 10


50 ........ :


Capita I
32 South Fla

Dol lars/Acre


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


Distribution of .....


Distribution of
32 South Fla. Fol i











Land 16.2%


Machinery & Equip. 4,2%


All Nurseries Largest


Managed Per Acre
Fol iage Nurseries, 1988


CThousandsD


4 Highest Rates
SLowest Rates


Smrl lest


Figure 11


Managed Capital
age Nurseries, 1988

Plants 49.7%








Accounts receivable 12.3%

Supplies & Cash 3.1%
Buildings & instal. 14.5%


Includes capital owned
plus capital leased






South Florida Foliage


Distribution of Managed Capital. The
distribution of the capital investment among land,
buildings, equipment, and other items 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
1988. Growing plants represented the largest share
of capital managed, 49.7 percent. Next in
importance were land (16.2 percent), buildings and
installations (14.5 percent), accounts receivable (12.3
percent), and machinery and equipment (4.2
percent). Other lesser areas of capital managed
were supplies (.9 percent), and cash on hand (2.2
percent).

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.

Costs by Expense Category (Appendix Table 6).
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 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 salary or time value averaged $73,103
for all nurseries, $156,391 for the largest nurseries,
and $21,650 for the smallest nurseries. Wages,


salaries, and associated expenses for employees
averaged $401,252 for all nurseries, $992,715 for the
largest, and $36,094 for the smallest. Thus, total
expenses on wages and salaries averaged $474,355
for all nurseries, $1,149,106 for the largest, and
$36,094 for the smallest nurseries (Table 2).

Production supplies. 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 $527,418, for
the largest nurseries $1,343,483, and for the smallest
nurseries $48,374.

Other production costs. Other production costs
are facility repairs/maintenance and equipment
operating costs. For all nurseries they averaged
$61,096, for the largest nurseries $150,569, and for
the smallest $6,499.

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 $142,240 for all nurseries,
$324,408 for the largest, and $19,156 for the
smallest.

Total cash costs. Total cash costs, including all
items mentioned above, averaged $1,205,109 for all
nurseries, $2,967,566 for the largest, and $131,773 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 $250,684 for all nurseries, $577,269
for the largest, and $50,279 for the smallest firms.

Total all costs. The sum of all cash costs and
non-cash allowances averaged $1,455,793 for all
nurseries, $3,544,836 for the largest, and $182,052 for
the smallest nurseries.






South Florida Foliage


Table 2--Costs of Production: 32 foliage nurseries in South Florida, 1988


ALL 32 Largest Smallest
Nurseries Third (11) Third (10)

SALARIES AND WAGES. . . . . . . . ... $474,355 32.6% $1,149,106 32.4% $57,744 31.7%
PRODUCTION SUPPLIES . . . . . . .... $527,418 36.2% $1,343,483 37.9% $48,374 26.6%
OTHER PRODUCTION COSTS. . . . . . . ... $61,096 4.2% $150,569 4.2% $6,499 3.6%
ADMINISTRATIVE & OVERHEAD COSTS . . . .... $142,240 9.8% $324,408 9.2% $19,156 10.5X
TOTAL CASH COSTS. . . . . . . .... .. $1,205,109 82.8% $2,967,566 83.7% $131,773 72.4%
NON-CASH COSTS. . . . . . . . . ... $250,684 17.2% $577,269 16.3X $50,279 27.6%
TOTAL ALL COSTS . . . . . . . .... .. $1,455,793 100% $3,544,836 100% $182,052 100%
==BS=aBSSSSSSSBSSSSS =SS=== S3===S S= ======


Costs as a Percent of the Total Cost (Appendix
Table 7).
Costs in terms of percentage of the total are
more useful for comparing cost relationships with
industry averages that may represent a significantly
different size of business. Distribution of costs of
production by category are shown graphically for the
average of all nurseries in Figure 12.

Salaries and wages. Salaries and wages (includes
operator) as a percentage of total costs averaged
32.6 percent of total costs for all nurseries, 32.4
percent for the largest, and 31.7 percent for the
smallest nurseries (Table 2). The smallest nurseries
had a significantly higher percentage of costs in
operator salaries (11.9 percent) than the industry
average (5.0 percent), but a lower percentage in
employees wages and salaries (19.8 percent vs. 27.6
percent). Employees wages and salaries were highest
for the largest nurseries (28.0 percent).

Production supplies. Expenses for production
supplies averaged 36.2 percent of total costs for all
nurseries, and 37.9 percent for the largest nurseries.
The smallest nurseries had a substantially lower
percentage, 26.6 percent. The greatest share of
expenses for this category was "plants and seeds"
(20.4, 22.1, and 9.1 percent, respectivley). Expenses
for growing containers ranged from 3.9 to 5.4
percent, and expenses on potting soil ranged from
2.6 percent for the largest nurseries to 3.9 percent
for the smallest.


Other production costs. Other production costs
averaged 4.2 percent for all nurseries, 4.2 percent for
the largest, and 3.6 percent for the smallest
nurseries.

Administrative and overhead. Overhead costs
averaged 9.8 percent of total costs for all nurseries,
9.2 percent for the largest, and 10.5 percent for the
smallest. Thus, counter to expectations, there is no
marked indication of economy of scale for overhead
expenses.

Total cash costs. Total cash costs as a percent of
all costs were 82.8 percent for the average of all
nurseries, 83.7 percent for the largest nurseries. The
smallest nurseries were about substantially lower, at
72.4 percent.

Non-cash costs. Non-cash costs ("depreciation"
through "interest on capital") averaged 17.2 percent
of total costs for all nurseries, 16.3 percent for the
largest, and 27.6 percent for the smallest. Thus, the
lower percentage cash costs for the smallest
nurseries were offset by their higher percentage non-
cash costs. A large share of differences in non-cash
costs was due to interest on capital: 12.7 percent for
all nurseries, 11.8 percent for largest, and 19.3
percent for the smallest. Depreciation on
equipment, buildings, and other property
improvements was 4.5 percent for all nurseries and
the largest third, and 8.3 percent for the smallest
third. These data indicate some economy of larger
scale in non-cash costs.






South Florida Foliage


Cost Efficiency
Costs per square foot are an important indicator
for comparing growing costs in relation to the
physical area of production. Similarly, costs per
dollar of sales and production are important
indicators for comparing growing costs with product
revenue.

Costs Per Square Foot of Bed and Bench Space
(Appendix Table 8).
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,
ditches, and the like. Costs per square foot of bed
and bench space averaged $1.99 for all nurseries,
$1.95 for the largest, and $2.10 for the smallest
(Figure 13). Highest rates of cost per square foot
averaged $5.17, and lowest rates averaged $1.04
(Figure 13). Cash costs per square foot (excluding
depreciation, and interest allowances) averaged $1.65
for all nurseries, $1.64 for the largest, and $1.52 for
the smallest nurseries.


Cost Per Square Foot of Propagating and
Finishing Space (Appendix Table 9).
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
$2.04, largest nurseries $1.98, and smallest firms
$2.20 (Figure 14). Highest rates averaged $5.65 per
square foot and lowest rates averaged $1.11 (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, and poor purchasing practices.
Other causes of increased costs may not be a
problem if they result in increased revenue.


Figure 12
Distribution of Costs of Production
32 South Fla. Foliage Nurseries, 1988


Labor
33%




SuppI i es
36%

Non-cash costs
17%

Other prod. costs Admin. & overhead
4% 10%






South Florida Foliage


Figure 13

Costs/Square Foot of Bed & Bench

32 South Fla. Foliage Nurseries,


6.00

5.00


4.00

3.00


2.00


1.00


0.00


AlI Nurser esLargest Smallest



Figure 14

Costs/Square Foot of Prop. & Fin. Space

32 South Fla. Foliage Nurseries, 1988


Do Ilars/Sq.Ft.
6.00


5.00
5 0 0 ............................................ ...............................................................


4 .00 .............................................. Highest Rates

Lowest Rates
3 .0 0 ....................................................................................................
SNon-Cash Costs

2.00 **- ---. ......................... Cash Costs


1.00 ------


0.00
Al I NurserlesLargest Smal lest


l* Highest Rates

- Lowest Rates
M Non-cash costs

Cash Costs


Space
1988






South Florida Foliage


Costs Per Dollar's Worth of Production (Appendix
Table 10).
Costs per dollar value 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 total
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 $1.09, for the largest
nurseries it was $1.10, and for the smallest nurseries
$1.15 (Figure 15). Thus, average total costs for all
nurseries were 9 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) per dollar of
production were $0.91 for the average of all
nurseries, $0.92 for the largest third, and $0.83 for
the smallest third. Highest rates of costs per dollar
value of production averaged $1.41 and lowest rates
were $0.87 (Figure 15).

Costs Per Dollar's Worth of Sales (Appendix Table
11).
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. The average for all firms was $.93, for largest
nurseries $.94, and for smallest firms $.90 (Figure
16). Highest cost firms averaged $1.10 per dollar of
sales, and lowest cost firms had cash costs of $.77
per dollar of sales (Figure 16).

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.


Income Summary (Appendix Table 12)
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. Figure 17
shows the components of income summarized, and
Table 3 arrays the data used for the figure.

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. Plant sales and changes in
plant inventory values were discussed earlier.
Increases in inventories of supplies averaged $897 for
all nurseries, $334 for the largest firms, and $1,565
for the smallest nurseries. 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 $14,601 for all nurseries, $29,348 for
the largest, and $2,523 for the smallest firms. Total
gain averaged $1,345,803 for all nurseries, $3,252,945
for the largest nurseries, and $162,429 for the
smallest.

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 $1,198,454 for all nurseries,
$2,970,412 for the largest firms, and $125,264 for the
smallest.

Net nursery income is the total return for the
year to the manager and to the capital invested in
the operation. Average net nursery income was
$147,349 for all nurseries, $282,533 for the largest,
and $37,165 for the smallest nurseries.







South Florida Foliage


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


Figure 15

Costs Per Dol lar s Worth of Production

32 South Fla. Foliage Nurseries, 1988


Do llars/Do I lar


1.60

1.40

1.20




0.80

0.60

0.40

0.20

0.00


esLargest Sryml lest


:ev.e.... Cc


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


All NirserlI


S Highest Rates

S Lowest Rates

SNon-Cash Costs

Cash Costs


Figure 16

Cash Costs Per Dollar 's Worth of Sales

32 South Fla. Foliage Nurseries, 1988


Do lars/Do I ar
1.20



1.10 ..... .........



1. 00o reakevert- ost ...........
H Highest Rates

0.0 -Lowest Rates
0 .90 ................ .........................



0 .80 ..........................



0.70
AIl Nlrseries Largest SnI lest


.... ...... ........................
R\
.... ...... ........................

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

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

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






South Florida Foliage 17

Table 3--Income Summary: 32 foliage nurseries in Florida, 1988.


ALL 32 Largest Smallest
unit Nurseries Third (11) Third (10)

TOTAL GAIN . . . . . . .... 1,345,803 3,252,945 162,429
Total Deductions . . . . . .... $. (1,198,454) (2,970,412) (125,264)
NET NURSERY INCOME . . . . . .. 147,349 282,533 37,165
Operator's salary or time value. . . ... 73,103 156,391 21,650
RETURN TO CAPITAL. . . . . . ... 74,246 126,142 15,515
--Percent .................. X 4.84 3.62 5.30



I Figure 17


Distr
32 South


3.50


ibut
Fla.


Dollars (Millions)


3.00 -......

2.50 .......

2. 0 .......................

1.50 --...-.


0.00


1.00

0. 50


All Nurser Ie Largest


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


ion of Total Gai
Foliage Nurseries.


n
1988


SRetrn to Capital
I Return to Operator
SDeduct Ions


Sma I lest


Expense Category." Return to capital averaged
$74,246 for all nurseries, $126,142 for the largest
nurseries, and $15,515 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.


.................................. a.....~






South Florida Foliage


Average value of capital invested (total capital
owned) for each of the three years was presented in
Table 1. The average rate of return on capital was
4.8 percent for all nurseries, 3.6 percent for the
largest nurseries, and 5.3 percent for smallest (Figure
18). Thus, for every dollar invested in these foliage
nurseries, there was an average return of 4.8 cents.
The deficit of 9 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.

Highest rates of return on capital averaged 24.9
percent and lowest rates were minus 14.9 percent
(Figure 18).

Statement of Financial Position
The statement of financial position (Appendix
Table 13) summarizes the assets and liabilities of
these nurseries, representing the mid-year financial
situation, derived as an average of the beginning of
the year and end of the year balance sheet figures.
Figure 19 illustrates the major components of the
statement of financial position.


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 $35,502 for all nurseries,
$82,056 for the largest nurseries, and $8,791 for the
smallest firms. The main function of cash on hand
is to pay for current liabilities. As a percentage of
average current liabilities, cash on hand represented
51 percent, 51 percent, and 141 percent, respectivley.

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 $202,085 for all nurseries, $503,875 for the
largest, and $17,690 for the smallest firms. As a
percentage of annual sales, these amounts
represented 16 percent, 16 percent, and 12 percent,
respectivley.


Figure 18

Return to Capital
32 South Fla. Foliage Nurseries, 1988

Percentage Profit to Capital Owned
30%


20% -


10 .................
Highest third
SM Lowest third
0-% -


-10% I .


-20%
AlI N -rserles Largest Smal lest






South Florida Foliage


Figure 19

Assets and Liabil cities
32 South Fla. Foliage Nurseries,


4.00

3.50


Dollars (Millions)


3.00 ------------....

2.50 --.....---

2.00 ......-------


1.50

1.00

0.50

0,00


Al Nurs.


Largest


Inventory values include growing plants and
supplies, which were presented previously in Table
1. The combined value of inventories averaged
$833,393 for all nurseries, $1,840,861 for the largest
firms, and $106,954 for the smallest. Inventory
turnover was 1.58 for all nurseries, 1.75 for the
largest, and 1.42 for the smallest third.

Current assets averaged $1,070,980 for all
nurseries, $2,426,792 for the largest, and $133,435 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
$821,746 for all nurseries, $1,883,176 for the largest,
and $248,409 for the smallest nurseries. Subtracting
accumulated depreciation left a current value of
$464,323 for all nurseries, $1,056,812 for the largest,
and $159,377 for the smallest nurseries. As a
percentage of the original investment, these current


1 Current Assets
B Long Term Assets
SCLrrent Llabl titles
SLong Term LIab I.
Net wortn


SmaI Iest


values represented 57 percent for the average of all
nurseries, 56 percent for the largest nurseries, and
64 percent for the smallest.

Total assets. The sum of current and long term
assets gives average total assets of $1,535,302 for all
nurseries, $3,483,604 for the largest, and $292,812 for
the smallest nurseries. These amounts are the same
as reported for "total 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 $64,406 for all
nurseries, $159,390 for the largest, and $6,219 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
averaged 3.4 for all nurseries, 3.7 for the largest
firms, and 4.3 for the smallest nurseries.

Long term .liabilities include notes payable and


1988


[.........i. .... **....***....* .......-


. . . .






South Florida Foliage


mortgages. They averaged $266,970 for all nurseries,
$539,367 for the largest, and $76,839 for the smallest
nurseries. The ratio of current liabilities to long
term liabilities was 0.26 for all nurseries, 0.30 for
largest, and 0.08 for the smallest firms.

Total liabilities. The sum of current and long-
term liabilities gives average total liabilities of
$336,376 for all nurseries, $698,758 for the largest,
and 83,058 for the smallest firms. The ratio of total
assets to total liabilities were 4.6, 5.0, and 3.5,
respectively, which represents a 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 was $1,198,926. For the largest it
was $2,784,847, and for the smallest $209,754.


Total Profitability Model
The Total Profitability Model combines
information from the operating statement and
statement of financial position in a graphic
presentation to illustrate how assets, liabilities, and
profit margin 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
all the nurseries, largest nurseries, and smallest
nurseries are given in the top, middle, and bottom of
each cell in the model. Data for the all-nursery
average (top box) will be discussed to illustrate the
operation of the model.

Margin Management
From total gain ($1,345,803) is subtracted total
deductions ($1,198,454) and the operator's salary
($73,103) to give return to capital ($74,246,
Appendix Table 12). This is divided by total gain to
yield an average net profit margin of 5.5 percent
(Appendix TAble 14).

Asset Management
Current assets ($1,070,980) plus long term assets
($464,323) make total assets of $1,535,302. Total


gain ($1,345,803) is divided by total assets to give an
asset turnover rate of 0.88. Asset turnover
multiplied by net profit margin (5.5 percent) results
in an average return to capital of 4.8 percent.

Leverage Management
Current liabilities ($69,406) plus long term
liabilities ($266,970) gives average total liabilities of
$336,376. Total assets minus total liabilities yields
an average net worth of $1,198,926. Total liabilities
plus net worth ($1,535,302) divided by net worth
gives a leverage factor of 1.28. This is really the
ratio of total assets owned by the company to net
worth. The rate of return to capital (4.8 percent)
multiplied by the leverage factor (1.28) gives a return
on net worth of 6.2 percent.


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 by following instructions
given in the Appendix under "Making Your Own
Calculations." This analysis should improve
management decisions affecting profitability of the
nursery operation.

Nursery operators who find this kind of
information useful, but have difficulty finding the
time to do own calculations 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 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.








South Florida Foliage



Figure 20 -- Total Profitability Model: 32 foliage nurseries in South Florida, 1988.


---Margin Management--------------------------------------
total gain
net profit
S 1,345,803
S 3,252,945 *** S 74,246


S 162,429 **** $ 126,142 *** net margin
*I 15,515 *
S 5.52%
total costs / *** 3.88 ***
Less interest total gain 9.55X *

$ 1,271,557 $1,345,803 *
$ 3,126,803 *** $3,252,945 Rate of
$ 146,914 $ 162,429 return
*
-Asset Management---------------------------------------- X 4.84[
cash total gain **** 3.62 ***
I* 5.30X *
$35,502 current $1,345,803 . .. *
$82,056 *** assets $3,252,945 *** *
$8,791 Sii 162,429 *
$ 1,070,980 asset *
+ *** $ 2,426,792 *** turnover *
accts. rec. $ 133,435 *
/ 0.877 *
$202,085 **** 0.934 *** *
$503,875 ** 0.555 *
$17,690 total asset *
*
+ $1,535,302 *
plant inven. + **** $3,483,604 *** *
$ 292,812 *
$818,389 *
S$1,806,339 *** long-term *
$102,744 assets *
*
+ S 464,323 *
supply inven S 1,056,812 *** *
S* $ 159,377 *
$15,004 *
$34,522 ***
$4,210 *

-Leverage Management-------------------------------------------------- --- X **
Liability plus
current liab. total Liab. net worth

S 69,406 $ 336,376 $1,535,302 Leverage *
$ 159,390 ****** $ 698,758 ****** $3,483,604 *** factor *
$ 6,219 $ 83,058 292,812 *
F1.281 *
+ + / **** 1.251 ***
long term debt net worth net worth 1.396
*
S 266,970 $1,198,926 $1,198,926 *
$ 539,367 ** $2,784,847 *** $2,784,847 **
$ 76,839 $ 209,754 $ 209,754


Key

32 Nursery Avg
Largest Third
Smallest Third


RETURN ON
NET WORTH

6.19X
* 4.53%
7.40%


====r~==I===============-=Pr=r-tlt===Pt






22 South Florida Foliage






South Florida Foliage 23

APPENDIX
Appendix Table of Contents Page

Definitions ................................... ............. ............... 24
Making your own calculations ...................................................... 24
Appendix Tables ............................ .................................. 26

List of Appendix Data Tables

Appendix Table Page

1 Size of business, 32 foliage nurseries in South Florida, 1988 .......................... 26
2 Rates of production, 32 foliage nurseries in South Florida, 1988 ........................ 27
3 Labor use indicators, 32 foliage nurseries in South Florida, 1988 ........................ 27
4 Land use indicators, 32 foliage nurseries in South Florida, 1988 ........................ 27
5 Capital use indicators, 32 foliage nurseries in South Florida, 1988 ....................... 28
6 Costs by expense category, 32 foliage nurseries in South Florida, 1988 ................... 29
7 Percent of total costs by expense category, 32 foliage nurseries in South Florida, 1988 ......... 30
8 Costs per square foot of bed and bench space, 32 foliage nurseries in South Florida, 1988 ...... 31
9 Costs per square foot of propagating and finishing space, 32 foliage nurseries in South Florida, 1988 32
10 Costs per dollar's worth of production, 32 foliage nurseries in South Florida, 1988 ............ 33
11 Cost per dollar's worth of sales (no adjustment for change in plant
inventory), 32 foliage nurseries in South Florida, 1988 ............................ 34
12 Income summary, 32 foliage nurseries in South Florida, 1988 .......................... 35
13 Statement of financial position, 32 foliage nurseries in South Florida, 1988 ................. 35
14 Financial ratios and other profitability indicators, 32 foliage nurseries in South Florida, 1988 .... 36






South Florida Foliage


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, and capital equipment, 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, whether in the form .of cash received or
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: the return to capital
divided by the value of owned capital. It is the rate
earned on the capital invested.

MAKING YOUR OWN CALCULATIONS
Analysis of your own operation for comparison
with the findings of this report can be done manually
with the information in Appendix Tables 1 and 6 for
your nursery. Lines are provided for entry of your
data. Make calculations for your nursery data in
Appendix Tables 2, 3, 4 and 5 according to the
formulaes 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
1A/1F. The slash mark (/) stands for division. The
Table 1A stands for the A line of Appendix Table
1, and 1F stands for the F line.

Calculations starting with Appendix Table 7 and
continuing through Appendix Table 11 are made by
dividing each line of Appendix Table 6 by the
appropriate figure as follows:

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

Appendix Table 8--divide your data in Appendix
Table 6 by your square footage figure on line F of
Appendix Table 1.

Appendix Table 9--divide your data in Appendix
Table 6 by your square footage figure on line D of
Appendix Table 1.


Appendix Table 10--divide your data in
Table 6 by your total value of production
line C of Appendix Table 1.


Appendix
figure on


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






South Florida Foliage


For Appendix Tables 12 and 13, formulas are not shown, but the data are 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 .......
shown previously

Line D: Miscellaneous income .........
Line E: Total gain ..................
Line F: Deduct cash costs .............
Line G: Deduct non-cash costs ........
Line H: Total deductions .............
Line I: Net nursery income ............
Line J: Deduct operator's salary ........
Line K: Return to capital .............
Line L: Rate of return to capital ........


Appendix Table 1, line A
Appendix Table 1, line B
from your beginning and ending supply inventory data, not


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 Q


Instructions for Appendix Table 13 are as follows:

Line A: Cash on hand ............... Appendix Table 1 line P
Line B: Accounts receivable ........... Appendix Table 1 line O
Line C: Plant inventory .............. Appendix Table 1 line J
Line D: Supply inventory ............. Appendix Table 1 line N
Line E: Total current assets ........... sum lines A,B,C, and D
Line F: Machinery & equipment ........ Appendix Table 1 line L
Line G: Buildings and fixtures .......... Appendix Table 1 line K
Line H: Land ..................... Appendix Table 1 line M
Line I: Original cost of fixed assets ...... Summ lines F,G,H
Line J: Accumulated depreciation ....... From your records, not shown in earlier tables
(Skip line J if lines F, G, and H are depreciated values. If not, enter accumulated depreciation.
Line K: Total long term assets ......... subtract J from I
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.

The business analysis calculations can also be done yourself with IFAS's MS-DOS compatible computer
program FOLAGNBA. Order program number 002, priced at $20, from:

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







South Florida Foliage


APPENDIX TABLES



Table 1--Size of Business: 32 Foliage Nurseries in South Florida, 1988


All 32
unit Nurseries


A Value of own plants sold . . . .... S 1,290,181
B Change in inventory value. . . . ... 40,125

C Total value of production. . . . ... 1,330,306

D Space for propagating & finishing ... .sq.ft. 713,476
E Space for stock plants . . . . . .sq.ft. 19,032

F Total bed and bench space. . . . . .sq.ft. 732,509


G Total nursery area . . . . . . .sq.ft.
H acres

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


920,242
21.13

25.65


Largest Smallest Your
Third (11) Third (10) Nursery


3,153,585
69,677

3,223,262

1,792,169
22,491

1,814,660


2,179,820
50.04

60.59


145,699
12,642

158,341

82,746
4,029

86,776


143,721
3.30

4.08


------------Capital Owned-------------
Growing plant inventory . . .
B(dgs, improvements . . . .
Machinery & equipment . . .
Land . . . . . . . .
Supply inventory . . . . .
Accounts receivable . . . .
Cash/checkbook balance . . .


0 Total Owned Capital. . . . . ... S


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


U Total Leased Capital . . . . .... .S


.........- Capital Managed-.-----------
V Growing plants . . . . . . . .
W Bldgs, improvements . . . . . .
X Machinery & equipment . . . . . .
Y Land . . . . . . . . . .
Z Supply inventory . . . . . . .
AA Accounts receivable . . . . . .
AB Cash/checkbook balance . . . . . .

AC Total Capital Managed . . . . . .


818,389
223,119
64,449
176,754
15,004
202,085
35,502

1,535,302


15,817
5,328
89,178

110,322


S 818,389
S 238,936
$ 69,777
S 265,932
S 15,004
S 202,085
S 35,502

S 1,645,625


1,806,339
532,909
153,115
370,789
34,522
503,875
82,056

3,483,604


8,818
12,955
167,818

189,591


1,806,339
541,727
166,069
538,607
34,522
503,875
82,056

3,673,195


102,744
53,024
14,543
91,810
4,210
17,690
8,791

292,812


750
300
24,350

25,400


102,744
53,774
14,843
116,160
4,210
17,690
8,791

318,212







South Florida Foliage


Table 2--Rates of Prodution Indicators: 32 Foliage Nurseries in South Florida, 1988


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

Sales/sq.ft. prop. & fin. space. (Table 1A/1D)
Product./sq.ft prop & fin. space (Table 1C/1D)

Sales/acre total nursery area. (Table 1A/1H)
Production/acre. . . . ... (Table 1C/1H)


All 32
unit Nurseries


S 1.76
S 1.82

S 1.81
S 1.86

$ 61,071
S 62,971


Largest
Third (11)


1.74
1.78

1.76
1.80

63,019
64,411


Smallest Your
Third (10) Nursery


1.68
1.82

1.76
1.91

44,160
47,991


Table 3--Space Use Indicators: 32 Foliage Nurseries in South Florida, 1988


AlL 32 Largest
unit Nurseries Third (11)
.....................................................................................


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

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

Total nursery area. . . . (Table 1G) sq.ft.
(incl. roads, parking, office, etc.)

Total bed & bench space . . (Table 1F) sq.ft.
--percent of total nursery area (Table 1F/1G) X

Propagating & finishing space (Table 1D) sq.ft.
--percent of total growing space (Table 1D/1F) X

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


157.6

44,621
6.1

920,242


732,509
79.6

713,476
97.4

19,032
2.6


174.6

111,078
6.1

2,179,820


1,814,660
83.2

1,792,169
98.8

22,491
1.2


Smallest Your
Third (10) Nursery


141.8

5,661
6.5

143,721


86,776
60.4

82,746
95.4

4,029
4.6


Table 4--Labor Use Indicators: 32 Foliage Nurseries in South Florida, 1988


ALL 32 Largest Smallest Your
unit Nurseries Third (11) Third (10) Nursery


PLant sales per person* . . (Table 1A/11) S 50,307 52,047 35,695
Value of production per person* (Table 1C/11) S 51,872 53,197 38,793

Growing area per person*. . (Table 1F/11) sq.ft. 28,562 29,949 21,260
Persons per acre growing area (Table 11/1H) number 1.21 1.21 1.24


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







South Florida Foliage


Table 5--Capital Use Indicators: 32 Foliage Nurseries in South Florida, 1988


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

Capital owned/person* . . (Table 10/11)
Capital managed/person* . .(Table 1AC/11)

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


---Managed Capital Per Person In---
Growing plants . . .(Table
Bldgs, improvements . .(Table
Machinery & equipment . (Table
Land . . . . . .(Table

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


ALL 32
unit Nurseries


X 84.0
X 78.4

$ 59,865
S 64,167

$ 72,674
S 77,896


1V/11)
1W/11)
1X/11)
1Y/11)


1V/1H)
1W/iH)
1X/1H)
1Y/1H)


31,911
9,317
2,721
10,369


38,739
11,310
3,303
12,588


Largest
Third (11)


90.5
85.9

57,493
60,622

69,614
73,403


29,812
8,941
2,741
8,889


36,097
10,825
3,319
10,763


Smallest Your
Third (10) Nursery


49.8
45.8

71,737
77,960

88,748
96,446


25,172
13,174
3,636
28,459


31,140
16,298
4,499
35,207


---Distribution of Managed Capital---
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


1V/1AC)
1W/1AC)
1X/1AC)
1Y/1AC)
1Z/1AC)
1AA/1AC)
1AB/1AC)


TOTAL. . . . . . . . . .


X 49.7
X 14.5
X 4.2
X 16.2
X 0.9
X 12.3
X 2.2

X 100.0


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


49.2
14.7
4.5
14.7
0.9
13.7
2.2

100.0


32.3
16.9
4.7
36.5
1.3
5.6
2.8

100.0







South Florida Foliage







Table 6--Costs by Expense Category: 32 Foliage Nurseries in South Florida, 1988


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

LABOR TOTAL . . . . . . . .

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

SUPPLIES TOTAL . . . . . . .

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

OTHER PRODUCTION COSTS TOTAL . . . .


Travel . . .
Insurance . . .
Telephone . . .
Electricity . .
Taxes & licenses..
Advertising . .
Rent- and/bui dings
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 . . . . . . .


ALL 32
unit Nurseries

S 73,103
S 401,252

$ 474,355


296,640
57,052
11,158
38,924
32,355
33,483
29,991
27,816

527,418


S 45,704
S 15,392

S 61,096


16,285
22,468
12,610
8,061
11,080
11,764
10,758
49,214

142,240

1,205,109


S 22,069
S 44,379
S 0
S 184,236

S 250,684

S 1,455,793


Your
Nursery


Largest
Third (11)

156,391
992,715

1,149,106


Smallest
Third (10)

21,650
36,094

57,744

16,488
9,793
386
7,136
3,920
3,152
4,092
3,406

48,374

3,077
3,422

6,499

1,754
4,228
2,332
1,643
1,352
1,833
839
5,176

19,156

131,773


782,515
138,636
28,975
91,373
79,380
82,552
73,421
66,630

1,343,483

118,219
32,350

150,569

39,881
44,260
28,049
17,475
25,010
28,196
20,933
120,604

324,408

2,967,566

52,361
106,876
0
418,033

577,269

3,544,836


4,784
10,358
0
35,137

50,279

182,052







30 South Florida Foliage







Table 7--Percent of Total Costs by Expense Category: 32 Foliage Nurseries in South Florida, 1988


ALL 32
unit Nurseries


Largest Smallest
Third (11) Third (10)
.................................


Operator's salary . . . . .... % 5.0
Other wages . . . . . . .... X 27.6

LABOR TOTAL . . . . . . .... X 32.6

Plants & seeds. .............. X 20.4
Containers. . . . . . . . ... % 3.9
Heating fuel ................ X 0.8
Peat & soil ................ X 2.7
Fertilizers & ime . . . . . ... X 2.2
Pesticides & chemicals. . . . . ... % 2.3
Packaging & shipping supplies . . .. % 2.1
Other production supplies ........ X 1.9

SUPPLIES TOTAL. . . . . . . .. X 36.2


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

OTHER PRODUCTION COSTS TOTAL . . . .

Travel. ..................
Insurance . . . . . . . .
Telephone .. . .. . .. .. .. .
Electricity . . . . . . . .
Taxes & licenses. . . . . . . .
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 . . . . . . .


3.1
1.1

4.2


% 1.1
X 1.5
% 0.9
% 0.6
% 0.8
% 0.8
% 0.7
X 3.4

X 9.8

% 82.8

% 1.5
X 3.0
% 0.0
X 12.7

X 17.2

% 100.0


4.4
28.0

32.4

22.1
3.9
0.8
2.6
2.2
2.3
2.1
1.9

37.9

3.3
0.9

4.2

1.1
1.2
0.8
0.5
0.7
0.8
0.6
3.4

9.2

83.7

1.5
3.0
0.0
11.8

16.3

100.0


Your
Nursery


11.9
19.8

31.7

9.1
5.4
0.2
3.9
2.2
1.7
2.2
1.9

26.6

1.7
1.9

3.6

1.0
2.3
1.3
0.9
0.7
1.0
0.5
2.8

10.5

72.4

2.6
5.7
0.0
19.3

27.6

100.0







South Florida Foliage 31








Table 8--Costs Per Square Foot of Bed & Bench Space: 32 Foliage Nurseries in South Florida, 1988


ALL 32
unit Nurseries
.................................


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

LABOR TOTAL . . . . . . ... cents


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

SUPPLIES TOTAL . . . . .


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 & licenses..
Advertising . .
Rent-Land/buildings
Other cash costs..


cents
cents
cents
cents
cents
cents
cents
cents


ADMINISTRATIVE & OVERHEAD COSTS TOTAL . cents

TOTAL CASH COSTS. . . . . . ... cents


Largest
Third (11)


10.0
54.8

64.8

40.5
7.8
1.5
5.3
4.4
4.6
4.1
3.8

72.0

6.2
2.1

8.3

2.2
3.1
1.7
1.1
1.5
1.6
1.5
6.7

19.4

164.5


Depreciation-machinery/equipment. ... .cents 3.0
Depreciation-buildings/etc . . . . cents 6.1
Supply inventory decrease . . . ... cents 0.0
Interest on capital . . . . ... cents 25.2

TOTAL NON-CASH COSTS . . . . .. cents 34.2

TOTAL ALL COSTS . . . . . .... cents 198.7


8.6
54.7

63.3

43.1
7.6
1.6
5.0
4.4
4.5
4.0
3.7

74.0

6.5
1.8

8.3

2.2
2.4
1.5
1.0
1.4
1.6
1.2
6.6

17.9

163.5

2.9
5.9
0.0
23.0

31.8

195.3


Smallest
Third (10)


24.9
41.6

66.5

19.0
11.3
0.4
8.2
4.5
3.6
4.7
3.9

55.7

3.5
3.9

7.5

2.0
4.9
2.7
1.9
1.6
2.1
1.0
6.0

22.1

151.9

5.5
11.9
0.0
40.5

57.9

209.8


Your
Nursery







32 South Florida Foliage








Table 9--Costs Per Square Foot of Propagating & Finishing Space: 32 Foliage Nurseries in South Florida, 1988


ALL 32
unit Nurseries


Largest Smallest
Third (11) Third (10)
....................................


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

LABOR TOTAL . . . . .

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


. . . .cents
. . .. cents


cents

cents
cents
cents
cents
cents
cents
cents
cents


SUPPLIES TOTAL. . . . . . . ... cents


Facility repairs . . .
Equipment operation . . .


. . .. cents
. . . cents


OTHER PRODUCTION COSTS TOTAL. . . ... cents


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


cents
cents
cents
cents
cents
cents
cents
cents


ADMINISTRATIVE & OVERHEAD COSTS TOTAL . cents

TOTAL CASH COSTS. . . . . . ... cents


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


cents
cents
cents
cents


TOTAL NON-CASH COSTS . . . . ... cents

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


Your
Nursery


10.2
56.2

66.5

41.6
8.0
1.6
5.5
4.5
4.7
4.2
3.9

73.9


6.4
2.2

8.6

2.3
3.1
1.8
1.1
1.6
1.6
1.5
6.9

19.9

168.9

3.1
6.2
0.0
25.8

35.1

204.0


8.7
55.4

64.1

43.7
7.7
1.6
5.1
4.4
4.6
4.1
3.7

75.0

6.6
1.8

8.4

2.2
2.5
1.6
1.0
1.4
1.6
1.2
6.7

18.1

165.6

2.9
6.0
0.0
23.3

32.2

197.8


26.2
43.6

69.8

19.9
11.8
0.5
8.6
4.7
3.8
4.9
4.1

58.5

3.7
4.1

7.9

2.1
5.1
2.8
2.0
1.6
2.2
1.0
6.3

23.1

159.2

5.8
12.5
0.0
42.5

60.8

220.0







South Florida Foliage 33








Table 10--Cost Per Dollar's Worth of Production: 32 Foliage Nurseries in South Florida, 1988


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

LABOR TOTAL . . . . . .

Plants & seeds . . . . .
Containers. . . . . . .
Heating fuel . . . . .
Peat & soil . . . . . .
Fertilizers & ime . . . .
Pesticides & chemicals . . .
Packaging & shipping supplies .
Other production supplies . .


All 32
unit Nurseries
......... 5.5...


. . .. cents
. . cents


cents

cents
cents
cents
cents
cents
cents
cents
cents


SUPPLIES TOTAL. . . . . . . ... cents


Facility repairs . . .
Equipment operation . . .


OTHER PRODUCTION COSTS TOTAL. .


Travel . . .
Insurance . . .
Telephone . . .
Electricity . .
Taxes & Licenses..
Advertising . .
Rent-Land/bui dings
Other cash costs..


. cents 3.4
. cents 1.2

. cents 4.6


cents
cents
cents
cents
cents
cents
cents
cents


ADMINISTRATIVE & OVERHEAD COSTS TOTAL . cents

TOTAL CASH COSTS . . . . . ... cents


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


cents
cents
cents
cents


TOTAL NON-CASH COSTS . . . . ... cents

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


Your
Nursery


Smallest
Third (10)

13.7
22.8

36.5


5.5
30.2

35.7

22.3
4.3
0.8
2.9
2.4
2.5
2.3
2.1

39.6


Largest
Third (11)

4.9
30.8

35.7

24.3
4.3
0.9
2.8
2.5
2.6
2.3
2.1

41.7

3.7
1.0

4.7

1.2
1.4
0.9
0.5
0.8
0.9
0.6
3.7

10.1

92.1

1.6
3.3
0.0
13.0

17.9

110.0


10.4
6.2
0.2
4.5
2.5
2.0
2.6
2.2

30.6

1.9
2.2

4.1

1.1
2.7
1.5
1.0
0.9
1.2
0.5
3.3

12.1

83.2

3.0
6.5
0.0
22.2

31.8

115.0


1.2
1.7
0.9
0.6
0.8
0.9
0.8
3.7

10.7

90.6

1.7
3.3
0.0
13.8

18.8

109.4


. . .
. . .







34







Table 11--Cost Per Dollar's Worth of Sales: 32 Foliage Nurseries in South Florida, 1988


South Florida Foliage


ALL 32
unit Nurseries
.....................


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

LABOR TOTAL . . . . . . .... cents


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


cents
cents
cents
cents
cents
cents
cents
cents


SUPPLIES TOTAL. . . . . . . ... cents


5.7
31.1

36.8

23.0
4.4
0.9
3.0
2.5
2.6
2.3
2.2

40.9


Facility repairs. . . . . . ... cents 3.5
Equipment operation . . . . ... cents 1.2

OTHER PRODUCTION COSTS TOTAL . . ... cents 4.7


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


cents
cents
cents
cents
cents
cents
cents
cents


ADMINISTRATIVE & OVERHEAD COSTS TOTAL . cents


TOTAL CASH COSTS . . . . . .

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


. cents

.,cents
. cents
. cents
. cents


TOTAL NON-CASH COSTS . . . . ... cents

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


1.3
1.7
1.0
0.6
0.9
0.9
0.8
3.8

11.0

93.4

1.7
3.4
0.0
14.3

19.4

112.8


Largest
Third (11)


5.0
31.5

36.4

24.8
4.4
0.9
2.9
2.5
2.6
2.3
2.1

42.6

3.7
1.0

4.8

1.3
1.4
0.9
0.6
0.8
0.9
0.7
3.8

10.3

94.1

1.7
3.4
0.0
13.3

18.3

112.4


Smallest Your
Third (10) Nursery
--------------------------


14.9
24.8

39.6

11.3
6.7
0.3
4.9
2.7
2.2
2.8
2.3

33.2

2.1
2.3

4.5

1.2
2.9
1.6
1.1
0.9
1.3
0.6
3.6

13.1

90.4

3.3
7.1
0.0
24.1

34.5

125.0







South Florida Foliage 35




Table 12--Income Surmary: 32 Foliage Nurseries in South Florida, 1988


ALL 32
unit Nurseries


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

E TOTAL GAIN . . . . . . .... ..


1,290,181
40,125
897
14,601


1,345,803 3,252,945


F Deduct cash costs except operator's salary S (1,132,006)
G Deduct non-cash costs except interest on cap S (66,448)

H Total Deductions . . . . . .... (1,198,454)

I NET NURSERY INCOME . . . . . .. S 147,349
J Operator's salary or time value. ..... .S 73,103

K RETURN TO CAPITAL. . . . . .... S 74,246
L --Percent. ................. 4.84


Table 13--Statement of Financial Position: 32 Foliage Nurseries in South Florida, 1988


ALL 32
unit Nurseries


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

E Total CURRENT Assets . . . . . .


---Long Term Assets---
Machinery & Equipment.
Buildings & Fixtures .
Land . . . . .


I Sub-total (original cost) . . . . .

J Less Accumulated Depreciation. . . . .

K Total LONG TERM Assets . . . . . .

L TOTAL ASSETS . . . . . . . .

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

O Total LIABILITIES. . . . . . . .

P NET WORTH. . . . . . . . . .

Q TOTAL LIABILITIES & NET WORTH . . . .


S 35,502
S 202,085
S 818,389
S 15,004

S 1,070,980


S 214,885
S 430,107
S 176,754

S 821,746

S (357,423)

S 464,323

S 1,535,302


S 69,406
S 266,970

S 336,376

S 1,198,926

S 1,535,302


Largest
Third (11)

3,153,585
69,677
334
29,348


Your
Nursery


Smallest
Third (10)

145,699
12,642
1,565
2,523

162,429

(110,122)
(15,142)

(125,264)

37,165
21,650

15,515
5.30


(2,811,175)
(159,237)

(2,970,412)

282,533
156,391

126,142
3.62


Smallest
Third (10)


Your
Nursery


Largest
Third (11)


82,056
503,875
1,806,339
34,522

2,426,792


507,036
1,005,352
370,789

1,883,176

(826,364)

1,056,812

3,483,604


159,390
539,367

698,758

2,784,847

3,483,604


8,791
17,690
102,744
4,210

133,435


46,469
110,131
91,810

248,409

(89,032)

159,377

292,812


6,219
76,839

83,058

209,754

292,812


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







36 South Florida Foliage







Table 14--Financial Ratios and Other Profitability Indicators: 32 Foliage Nurseries in South Florida, 1988


ALL 32 Largest Smallest Your
Nurseries Third (11) Third (10) Nursery


Cash on Hand/Current Liabilities ......... 0.51 0.51 1.41

Accounts Recievable/Sales. ............ 0.16 0.16 0.12

Quick Ratio (Cash & Acct.Rec./Curr.Liab) ..... 3.42 3.68 4.26

Inventory Turnover ................ 1.58 1.75 1.42

Current VaLue/Orig. Cost of Long Term Assets . 0.57 0.56 0.64

Total Assets/Total Liabilities .......... 4.56 4.99 3.53

Current Liabilities/Long Term Liabilities. ..... 0.26 0.30 0.08

Net Profit Margin. ................ 5.5% 3.9% 9.6%

Asset Turnover Ratio ............... 0.88 0.93 0.55

Return to Capital. ................ 4.84% 3.62% 5.30%

Leverage Factor. ................. 1.28 1.25 1.40

Return on Net Worth. ............... 6.2% 4.5% 7.4%






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