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 Front Cover
 Title Page
 Abstract
 Acknowledgements
 Table of Contents
 List of Figures
 List of Tables
 Main
 Appendix


UF FLAG IFAS PALMM



Business analysis of foliage plant nurseries in Central Florida
ALL VOLUMES CITATION SEARCH THUMBNAILS PAGE IMAGE ZOOMABLE
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Permanent Link: http://ufdc.ufl.edu/UF00026151/00006
 Material Information
Title: Business analysis of foliage plant nurseries in Central Florida
Series Title: Economic information report
Portion of title: Foliage plant nurseries in Central Florida
Physical Description: v. : ; 28 cm.
Language: English
Creator: University of Florida -- Food and Resource Economics Dept
Florida Cooperative Extension Service
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
Frequency: annual
regular
 Subjects
Subjects / Keywords: Foliage plant industry -- Economic aspects -- Periodicals -- Florida   ( lcsh )
Nurseries (Horticulture) -- Economic aspects -- Periodicals -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
statistics   ( marcgt )
serial   ( sobekcm )
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General Note: Description based on 1980: title from cover.
Funding: This collection includes items related to Florida’s environments, ecosystems, and species. It includes the subcollections of Florida Cooperative Fish and Wildlife Research Unit project documents, the Sea Grant technical series, the Florida Geological Survey series, the Coastal Engineering Department series, the Howard T. Odum Center for Wetland technical reports, and other entities devoted to the study and preservation of Florida's natural resources.
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 Related Items
Preceded by: Business analysis for foliage and potted flowering plant nurseries in Central Florida

Table of Contents
    Front Cover
        Front cover
    Title Page
        Page i
        Page ii
    Abstract
        Page iii
    Acknowledgements
        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
    Appendix
        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
        Page 44
Full Text
\oQ


J. Robert Strain
Alan W. Hodges


Economic Information
Report 254


Business Analysis of Foliage Plant
Nurseries in Central
Florida, 1987


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


December 1988









WEmA s An=


MMt22ftek















ABSTRACT
Average sales, costs, returns, and efficiency indicators are presented for 21 wholesale
foliage plant nurseries in Central Florida, for the tax year of 1987. Plant sales averaged
$507,531. Value of plant inventory decreased during the year by $8,192. When adjustments were
made for changes in inventories and miscellaneous income, total gain for the year was
$503,536. Total costs of production, including cash expenses and non-cash allowances for
depreciation and interest, but excluding any returns to the operator averaged $428,158. Net
nursery income averaged $75,378. Capital investment including plant inventory, land, equipment,
buildings, supplies, and accounts receivable amounted to $517,224. Average return on capital
investment was 8.5 percent. Average returns (to owner-operator and capital) per square foot
of growing area were $.69. Comparable information is presented also for subsamples of the
largest and smallest nurseries.
KEY WORDS: Foliage nursery business analysis, income, costs, investment, efficiency
measures, Florida, Central.


ACKNOWLEDGEMENTS
This report was made possible by the cooperating Central 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 Bruce Barmby, Cathy Neal, and Jerald Southwell. 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.












ABSTRACT
Average sales, costs, returns, and efficiency indicators are presented for 21 wholesale
foliage plant nurseries in Central Florida, for the tax year of 1987. Plant sales averaged
$507,531. Value of plant inventory decreased during the year by $8,192. When adjustments were
made for changes in inventories and miscellaneous income, total gain for the year was
$503,536. Total costs of production, including cash expenses and non-cash allowances for
depreciation and interest, but excluding any returns to the operator averaged $428,158. Net
nursery income averaged $75,378. Capital investment including plant inventory, land, equipment,
buildings, supplies, and accounts receivable amounted to $517,224. Average return on capital
investment was 8.5 percent. Average returns (to owner-operator and capital) per square foot
of growing area were $.69. Comparable information is presented also for subsamples of the
largest and smallest nurseries.
KEY WORDS: Foliage nursery business analysis, income, costs, investment, efficiency
measures, Florida, Central.


ACKNOWLEDGEMENTS
This report was made possible by the cooperating Central 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 Bruce Barmby, Cathy Neal, and Jerald Southwell. 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.












TABLE OF CONTENTS
Page
ABSTRACT .................... .......... . . .... ii
ACKNOWLEDGEMENTS ............. ................... i
LIST OF FIGURES ................................... vii
LIST OF TABLES . . . ... .. .. . . ix
LIST OF APPENDIX TABLES . . . .... . . . ix

INTRODUCTION. . . . . .. . ....... 1
PROCEDU RE . . . . . . . . . 2
DATA AND RESULTS . . . . ... . ....... 3
Size of Business . . . .. . . . 3
Sales and Total Value of Production . . .... . . .. 3
A annual sales . . . .. . . . 3
M monthly sales . . . . . . . 5
Land, Labor and Capital ...... ... ........... ... 6
Land: bed and bench space .... .............. ..... 6
Labor: full-time equivalent persons .. .. . . . .. 6
Capital: owned and managed ........ ..... . .... 7
Productivity Indicators .. .. .. ........ .... . . .. 8
Land Use ..... ................... . 8
Labor Use . .. .. . ....... . . .... 9
Capital Use ... . . . . ... 11
Capital turnover . . . . . . .... 11
Capital managed per person . ............. . 12
Capital managed per acre .... . . . . 12
Distribution of managed capital . . . . . 12
Costs of Production ....... . ... . ...... 14
Costs by Expense Category* ............. .... ... 14
Costs as a Percent of the Total Cost* .......... . .... 15
Cost Efficiency ... . .. . .. ...... ... 18
Cost Per Square Foot of Bed and Bench Space. .. .. . .. 19
Cost Per Square Foot of Propagating and Finishing Space . .... 20
Cost Per Dollar's Worth of Production ... .. ... . .. 21
Cost Per Dollar's Worth of Sales ... ..... ... . 22
Income Summary. . . ... . . . 222
Total Gain ..... ................. ............... 23
Cost Deductions and Net Nursery Income .. .. .. . .. .23
Return on Capital . .... .... . .. .. . . 25
Statement of Financial Position ........... .. . . . .25
Assets ...... ...... ................... 25
Cash on hand ...... ...................... 25
Accounts receivable ............ .... ......... 25
Inventory values . . . . . .... 25
Total current assets .... . . ...... 25
Long term assets ....... ......... ......... 25
Total assets . . . . . . 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











TABLE OF CONTENTS (Continued)
Page

Liabilities... ................. ............. 27
Current liabilities .................. ...... 27
Long term liabilities .................. ..... 27
Total liabilities... ................ ........ 27
Net Worth .................... ........... 27
Total Profitability M odel .. ... .. ... .. .. .. .. .. .. ...... 27
Margin Management ..................... ....... 29
Asset M management .. . . .. .. . . ... 29
Leverage Management ................... ......... 29
CONCLUDING COMMENTS ............................. 30

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










LIST OF FIGURES


Sales and Total Value of Production . . . . .. . ..


Page

4


M monthly Sales . . . . . . . . 5

Land: Bed and Bench Space ............................ 6

Labor: Number of Persons ................... ........... 6

Capital Owned and Managed ................... .. .... 7

Land Use: Value of Production Per Square Foot . . . . 8

Labor Use: Value of Production Per Person . . . .... 10

Capital Turnover . . . .. .. ... . .... 11

Capital M managed Per Person . . . . . . .. 12

Capital Managed Per Acre ....................... ..... .. ... 12

Distribution of Managed Capital ..... . . . . 13

Distribution of Costs of Production . . . . . .. 16

Costs Per Square Foot of Bed and Bench Space . . . . .. 18

Costs Per Square Foot of Propagating and Finishing Space . . .. 19

Costs Per Dollar's Worth of Production. . . . . .... 20

Cash Costs Per Dollar's Worth of Sales . . .. . . 21

Distribution of Total Gain ... . . . . . 23

Return to Capital . .. .. . . . . . 24

Assets and Liabilities .. ........ ......................... 26

Total Profitability M odel . ... .. . . ... 28


Fieui

1


re





































































viii


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11


i
'
:











LIST OF TABLES
Table Pae

1 Sales, growing area, people and capital, 25 foliage nurseries in Central
Florida, 1987 . . . . . . . . 4

2 Costs of production, 25 foliage nurseries in Central Florida, 1987 . ... 14

3 Income summary, 25 foliage nurseries in Central Florida, 1987 . . .. 22




LIST OF APPENDIX DATA TABLES

Appendix Table Page

1 Size of business, 25 foliage nurseries in Central Florida, 1987 . . .. 35

2 Rates of production, 25 foliage nurseries in Central Florida, 1987 . ... 35

3 Land use indicators, 25 foliage nurseries in Central Florida, 1987 . ... 35

4 Labor use indicators, 25 foliage nurseries in Central Florida, 1987 . ... 36

5 Capital use indicators, 25 foliage nurseries in Central Florida, 1987 . ... 36

6 Costs by expense category, 25 foliage nurseries in Central Florida, 1987 . .. 37

7 Percent of total costs by expense category, 25 foliage nurseries in Central
Florida, 1987 . . . ... . .. . . 38

8 Costs per square foot of bed and bench space, 25 foliage nurseries in Central
Florida, 1987 . . . . . . . . .. ... 39

9 Costs per square foot of propagating and finishing space, 25 foliage nurseries
in Central Florida, 1987 . . . . . . 40

10 Costs per dollar's worth of production, 25 foliage nurseries in Central
Florida, 1987 . . . . . . . . 41

11 Cost per dollar's worth of sales (no adjustment for change in plant
inventory), 25 foliage nurseries in Central Florida, 1987. . . ... 42

12 Income summary, 25 foliage nurseries in Central Florida, 1987 . .... .. 43

13 Statement of Financial Position, 25 foliage nurseries in Central
Florida, 1987. ........ ................ 43





ix

























BUSINESS ANALYSIS OF FOLIAGE NURSERIES IN CENTRAL FLORIDA, 1987


J. Robert Strain and Alan Hodges



INTRODUCTION


This publication contains information on sales, costs, returns and production efficiency
for 25 wholesale foliage plant nurseries in Central Florida for 1987. Other publications in the
Florida Nursery Business Analysis series include reports on South 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.


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 Central Florida,
rather than being typical of the foliage plant industry.
Data were collected for the 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 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 replacement cost, particularly for older firms.
The tables and figures present average values for all 25 nurseries, for the average of
the largest 8 firms, and for the smallest 8 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 analyzing their own operations may find this information especially
valuable for indicating the general area of their business needing additional study and analysis.
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 Businessi
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 $507,531 for all nurseries, $1,150,255 for the
largest nurseries, and $80,113 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, 25 foliage nurseries in
Central Florida, 1987.
unit All Largest Smallest
Nurseries Third (8) Third (8)

Value of own plants sold . . ... $ 507,531 1,150,255 80,113
Change in Inventory Value. . ... $ (8,192) (10,080) 213
Total value of production. . ... S 499,339 1,140,174 80,326
Total bed & bench space. . . .... sq.ft. 109,447 190,783 29,470
Number of persons employed . . number 14.48 32.27 3.08
Owned Capital. . . . S 517,224 1,119,361 138,534
Leased/rented capital items ........ 99,216 377,341 0
Managed Capital. . . . ... $ 616,440 1,417,486 138,534

See Appendix Table 1 for more detail.








Figure 1

Sales and Total Value of Production
25 Central Fla. Foliage Nurseries, 1987


Dollars (Thousands)




800 -......

200 .
.... ::1.. ..
0 0 0 ............ .......................... '' n \






r200e rie Sales valre ue oT 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 negative for the average of all nurseries and the largest firms, and was
positive for the smallest nurseries, giving a total value of production of $499,339, $1,140,174,
and $80,326 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, April, and May. Sales for these four months accounted for 50
percent of the year's total sales. Sales for April, the highest month, were $68,352, which was
113 percent greater than those for December, the lowest month ($32,105).





Figure 2
Monthly Sales
25 Central Fla. Foliage Nurseries, 1987

Dollars (Thousands)
200


150

Largest Third
100 ...- ...... .................. All N nurseries
0 Smallest Third
5 0 .............


0- i i I 1 -- -
JanFebMarAprMayJun Jul AugSepOctNovDec
Month









Land. Labor and Capital
Land: bed and bench space. Total bed and bench space averaged 109,447 square feet for
all nurseries, 190,783 square feet fo the largest nurseries, and 29,470 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 96,184 square feet for all nurseries,
165,743 square feet for largest nurseries, and 25,522 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 13,263 square feet for all nurseries, 25,040 square feet for the
largest firms, and 3,949 square feet for the smallest nurseries. Total nursery area, which
includes drives, roads, parking lots, office, packing house and the like, averaged 3.9 acres for
all nurseries, 5.9 acres for the largest firms, and 1.1 acres for the smallest.
Figure 3
Land: Bed and Bench Spaoe
26 Central Fla. Folbge Nurseres, 1987
0 Square Feet (Thousands)





50

All Nurerie Largat Third nrmieet 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 14.5, for the largest it was 32.3, and for the smallest
nurseries it was 3.1 (Table 1 and Figure 4).


Figure 4
Labor: Number of Persons
26 Central Fla. Foliage Nurseres. 1987
I-time Equlv. 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
$517,224 for all nurseries, $1.119 million for the largest firms, and $138,534 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 $616,440 for all nurseries, $1.417 million for the largest nurseries, and $138,534 for
the smallest nurseries (Table I and Figure 5).





Figure 5

Capital Managed
25 Central Fla. Foliage Nurseries, 1987


1600

1400

1200

1000

800

600

400

200

0


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 $5.19 for
all nurseries, $6.88 for the largest firms, and $3.15 for the smallest. Value of production per
square foot of total bed and bench space (includes stock plant space) was $4.56 for all
nurseries, $5.98 for the largest firms, and $2.73 for the smallest (Figure 6). So, the largest
nurseries had a 31 percent greater rate of production per square foot than the average of all
nurseries. Firms with the highest annual rates of production averaged $8.85 per square foot,
while those with the lowest averaged $1.31 per square foot.


Figure 6

Land Use: Value of Production/Sq. Ft.
25 Central Fla. Foliage Nurseries, 1987


1000Dollars/SqFt


8.00


6.00n
8 .0 0 .. ..... .......... ... .....


6 .0 0 ... ....- ...... ....... ..... .. ... ...........
Highest Rates
-4- Lowest Rates
4 .0 0 ....... .............


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

0.00
All Nurseries Largest Third Smallest 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 $129,627, for the largest nurseries, $193,055, and for the smallest nurseries,
$73,605. 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 be the result of 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 slower 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 indicatorf efficiency in
the use of space. This averaged $1.72 for all nurseries, $2.08 for the largest nurseries, and
$1.60 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.
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 270 percent. This means that annual plant sales
amounted to 2.7 times the average value of plant inventory. Vacant bed and bench space
averaged 8.0 percent of the total for all nurseries, 9.0 percent for the largest third, and 5.4
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 $34,475 per person for all
nurseries, $35,336 for the largest firms, and $26,039 for the smallest (Figure 7).
Highest rates of production per person averaged $50,752 per person, and lowest rates
were $21,984. This represented a range about the industry average between 47 percent above
and 36 percent 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 7,556 square feet for all nurseries, 5,913
square feet for the largest firms, and 9,553 square feet for the smallest. Stated another way,


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

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









the number of persons per acre of bed and bench space averaged 5.76 for all nurseries, 7.37
for the largest nurseries, and 4.56 for the smallest nurseries. Thus, the largest foliage
nurseries employed 28 percent more labor per unit acre than the average of all nurseries.


Figure 7
Labor Use: Value of Production/Person
25 Central Fla. Foliage Nurseries, 1987


oDollars/Employee Equivalent (Thousands)
60

6 0 ... .... ..... .... ......... .... ...... ... H ig hest R ate s
Lowest Rates
40



20
S10



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 employee viewed alone might
seem to indicate true efficiency, but when viewed together with other indicators, it might
instead show less than optimum number of persons 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 per
person can also 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 98.2 percent, for the largest nurseries 102.8 percent, and for smallest
57.8 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
163 percent. Lowest rates averaged 34 percent.

Figure 8

Capital Turnover
25 Central Fla. Foliage Nurseries, 1987


Sales as a Percentage of Capital Owned
200%



150%
1 5 0 % . ..... ........ .. .............. .. ... .. .. ..... .. ... ... .... ..... ... .. ... ......... .... .. ... ... .. ...... ...... .


--I- Highest Rates
1 0 0 % .. .. ... .. ... ... ........ .... .
T- Lowest Rates


50% .. ....


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, 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, 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.


I -











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 $42,560 for all nurseries, $43,931 for the largest nurseries, and $44,908 for the
smallest nurseries (Figure 9). Highest rates for capital managed per person averaged $84,719,
or about twice that of all nurseries. Lowest rates were $21,253 (Figure 9), or about one half
of the all-nursery average.


Capital Managed Per Acre. Capital managed per acre of total nursery area averaged
$160,026 per acre for all nurseries and $126,943 for the smallest firms (Figure 10). Average
investment per acre for the largest nurseries ($240,010) was about 50 percent higher than that
for the average of all nurseries. Highest rates of capital managed per acre were even higher
at $424,299. Lowest rates averaged $48,756 (Figure 10).


Figure 9
Capital Managed Per Person
26 Central Fla. Folage Nurseries, 1987
Dollars per Person (Thousands)

s o .. ............. ..... ...... ..... ... ................. .............. .... ... .

0 ................................. ............................ ---High t- ...
10t.1 Rolm
40


All Nnrll LLo I Third SWlll Third


Figure 10
Capital Managed Per Acre
25 Central Fla. Foliage Nurseries. 1987
Dollars/Acre (Thousands)








All \ \nl I\ \ Thid Bn\ILtaht Third
AlIl gtll -rlo Thlor l S n1a Thlrd


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, 30.5
percent. Next in importance was buildings (25.8 percent) and land (18.1 percent). Other lesser
areas of capital managed were accounts receivable (11.9 percent), machinery and equipment
(6.8 percent), and supplies and cash (6.9 percent).








Figure 11
Distribution of Managed Capital
25 Central Fla. Foliage Nurseries, 1987



Land ,
18.1%


Machinery &
6,8%


Equip,


Buildings & install
25.8%


/ Accounts receivable
11.9%

Supplies & Cash
6.9%


Includes capital owned
plus capital leased










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 by expense category, 25 foliage nurseres In Central FLorida, 1987.

ALL Nurseries Largest Third (8) Smallest Third (8)


Labor Total . .... 188,183 36.1% $430,973 37.2% $29,725 30.0%
Supplies Total . .. $170,300 32.6% $383,688 33.2%X 25,954 26.2%
Other Production Costs Total. $14,884 2.9% $26,392 2.3% $4,484 4.5%
Administrative & Overhead Costs 557,917 11.1% $134,232 11.6% 510,141 10.2%
Total Cash Costs ..... ..$431,283 82.7% $975,286 84.3% $70,304 71.0%
Total Non-Cash Costs . 90,482 17.3% $181,831 15.7% $28,731 29.0%
Total All Costs . ... $521,766 100.OX $1,157,117 100.OX $99,035 100.0%

See Appendix Tables 6 and 7 for more detail.




Costs by Expense Catenorv6
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 Central Florida foliage nursery, either as a
buyer, seller, or lender.
Salaries and waaes. 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 $31,541 for all nurseries, $54,746 for the largest nurseries, and
$15,480 for the smallest nurseries. Wages, salaries, and associated expenses for employees
averaged $156,642 for all nurseries, $376,227 for the largest, and $14,245 for the smallest.
Thus, total expenses on wages and salaries averaged $188,183 for all nurseries, $430,973 for
the largest, and $29,725 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 $170,300, for the largest nurseries $383,688, and for smallest nurseries $25,954.
Other production costs. Other production costs are facility repairs/maintenance and
equipment operating costs. For all nurseries they averaged $14,884, for the largest nurseries
$26,392, and for the smallest $4,484.
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
$57,917 for all nurseries, $134,232 for the largest, and $10,141 for the smallest.
Total cash costs. Total cash costs, including all items mentioned above, averaged $431,283
for all nurseries, $975,286 for the largest, and $70,304 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
$90,482 for all nurseries, $181,831 for the largest, and $28,731 for the smallest firms.
Total all costs. The sum of all cash costs and non-cash allowances averaged $521,766 for
all nurseries, $1,157,117 for the largest, and $90,035 for the smallest nurseries.



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.












Figure 12


Distribution of Costs of Production

25 Central Fla. Foliage Nurseries, 1987


Labor

36%


Supplies

33%








Other pro

39


d, costs
o


Admin,


Non-cash costs

17%




& overhead

11%


. . . .
. . .
. . .
. . .
. . .
...............
. . . .
. . . .
- 1 1 . . .
.. ......... .. .
...........
................
.... .. ........
... ...... .. .
............ .
. . . I
. . I . .
.........r
. . . . . . . .
.. .... ...
....................
........... .......
. . . . .
..........










Salaries and wages. Salaries and wages (includes operator) as a percentage of total costs
were quite uniform across the industry, averaging, 36.1 percent of total costs for all nurseries,
37.3 percent for the largest, and 30.0 percent for the smallest nurseries (Table 2).
The smallest container nurseries reported a significantly higher percentage of costs in operator
salaries (15.6 percent) than the industry average (6.1 percent), but a lower percentage in
employees wages and salaries (14.4 percent vs. 30.0 percent). Employees wages and salaries
were highest for the largest nurseries (32.5 percent).
Production supplies. Expenses for production supplies fluctuated considerably among
nurseries. Average costs for all nurseries were 32.6 percent of total costs, for the largest
nurseries 33.2 percent, and for the smallest nurseries 26.2 percent. The greatest share of
expenses for this category was "plants and seeds" (11.3 percent to 14.8 percent). Expenses for
growing containers were 3.9 to 5.1 percent. Expenses on shipping materials showed the largest
proportional variation, being 2.7 percent for the smallest nurseries, 4.9 percent for all
nurseries, and 5.7 percent for the largest.
Other production costs. Other production costs averaged 2.9 percent for all nurseries, 2.3
percent for the largest, and 4.5 percent for the smallest nurseries.
Administrative and overhead. Overhead costs averaged 11.1 percent of total costs for all
nurseries, 11.6 percent for the largest, and 10.2 percent for the smallest. Thus, counter to
expectations, there is no indication of economy of scale for overhead or other production
expenses.
Total cash costs. Total cash costs as a percent of all costs for container nurseries were
very close for the average of all nurseries and the largest nurseries (82.7 percent and 84.3
percent). The smallest container nurseries were about 12 points lower, at 71.0 percent.
Non-cash costs. Non-cash costs ("depreciation" through "interest on capital") averaged
17.3 percent of total costs for all nurseries, 15.7 percent for the largest, and 29.0 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: 11.9 percent for all nurseries, 11.6 percent for largest, and 16.8
percent for the smallest. Depreciation on equipment, buildings, and other property
improvements was 5.5 percent for all nurseries, 4.1 percent for the largest third, and 12.2
percent for the smallest third. These data indicate some economy of larger scale in non-cash
costs.









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
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 $4.77 for all nurseries, $6.07 for the
largest, and $3.36 for the smallest (Figure 13). Highest rates of cost per square foot averaged
$9.15, and lowest rates averaged $1.93 (Figure 13). This gave a broad range of $7.22 per
square foot.
Cash costs per square foot (excluding depreciation, interest, etc.) averaged $3.94 for all
nurseries, $5.11 for the largest, and $2.39 for the smallest nurseries.



Figure 13
Costs/Square Foot of Bed & Bench Space
25 Central Fla. Foliage Nurseries, 1987


10 Dollars/Sq.Ft,
S[- -103- Highest Rates

8.00 LOwest Rates
8 .0 0 ............. I. ............... ...... ..................... ........... ....... .. ................... ....... L o w e s t R a te s


0 .o ..... .. ........ ............................... ..................... .,, ^ ,, ^ .......................... ........ ...................................
6.00




2.00 -
4 .0 0 ...................................... "" " .. ..........





0.00 -
. ...






All Nurseries Lergest Third Smallest Third




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









Cost 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 $5.42, largest nurseries $6.98,
and smallest firms $3.88 (Figure 14). Highest rates averaged $10.08 per square foot. Lowest
rates averaged $2.56 (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
25 Central Fla. Foliage Nurseries, 1987

Dollars/Sq.Ft.
12.00

10.00 n Highest Rates
I Lowest Rates
8.00 ....
8 .0 0 . ......... ..... ...... .. .. .. ....... .. ... . . . ...... ...................... .. .... . .. ........ ..




2.00

0.00 ___
All Nurseries Largest Third Smallest Third




9 See Appendix Table 9 on page 40 for complete data.









Costs Per Dollar's Worth of Productionl0
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 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 $1.04, for the largest nurseries it was $1.01, and for the
smallest nurseries $1.23 (Figure 15). Thus, average total costs for all nurseries were 4 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 $1.51. Lowest rates were
$.83 (Figure 15).



Figure 15
Costs Per Dollar's Worth of Production
25 Central Fla. Foliage Nurseries, 1987

Dollars/Dollar
1.50 ...........r... Highest Rates
Lowest Rates
: Non-cash costs
Breakeven Cost
1.00 Cash Costs



0.50



0.00
All Nurseries Largest Third Smallest Third



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









Cash Costs Per Dollar of Sales 1
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 $.85 for
all nurseries and largest nurseries, and $.88 for the smallest (Figure 16). Highest cost firms
averaged $1.04 per dollar of sales, and lowest cost firms had cash costs of $.69 per dollar of
sales (Figure 16).


Figure 16
Cash Costs Per Dollar's Worth of Sales
25 Central Fla. Foliage Nurseries, 1987

Dollars/Dollar
1.20
r -- -n-- - -
1.00 -
Breakeven Cost
0.80- .- .... -- Highest Rates
--0.60-- ..... Lowest Rates
0.60

0.40 .

0.20

0.00
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 price premium for


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











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 Summary12
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. Figure 16 shows the components of income
summarized, and Table 3 arrays the data used for the figure.

Table 3--Income Summary, 25 foliage nurseries in Central Florida, 1987.

unit All Largest Smallest
Nurseries Third (8) Third (8)

TOTAL GAIN . . . .... 503,536 1,151,603 81,056
Total Cost Deductions. . . .... (428,158) (968,048) (66,930)
NET NURSERY INCOME ............. $ 75,378 183,555 14,126
Operator's salary or time value. ...... $ (31,541) (54,746) (15,480)
RETURN TO CAPITAL. . . ... $ 43,837 238,301 (1,354)
X 8.48 11.51 -0.98
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 $1,112 for all nurseries, $4,667 for the largest firms, and $113
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 $3,085 for all nurseries, $6,761 for the largest, and $618 for the
smallest firms. Total gain averaged $503,536 for all nurseries, $1,151,603 for the largest
nurseries, and $81,056 for the smallest.


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











Figure 17
Distribution of Total Gain
25 Central Fla. Foliage Nurseries, 1987

Dollars (Thousands)
2000

1 5 0 0 -. . . ... . . . .... . . . . . . . ... ; ; ; ; .. . .. . . . .. .. . . .. .. .. . . . .

1000 ^^^^^^^^^^ .- .......... . .. .1 Return to Capital
I Return to Operator
500 --- Expenses





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 $428,158 for
all nurseries, $968,048 for the largest firms, and $66,930 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
$75,378 for all nurseries, $183,555 for the largest, and $14,126 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 $43,837 for all nurseries, $128,809 for the largest nurseries, and minus $1,354
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.
Average value of capital invested for each of the three years was given in Table 1. Figure 18
shows that average rate of return on capital was 8.5 percent for all nurseries, 11.5 percent
for the largest nurseries, and minus 1.0 percent for smallest. Thus, for every dollar invested
in these foliage nurseries, there was an average return of 8.5 cents. The deficit of 5 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 39.5 percent. Lowest rate were minus 20.0
percent (Figure 18).



Figure 18
Return to Capital
25 Central Fla. Foliage Nurseries, 1987


Percentage Profit to Capital Owned


-30%


All Nurseries Largest Smallest












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 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 $21,041 for all nurseries, $41,368 for the largest nurseries,
and $2,335 for the smallest firms. The main function of cash on hand is to pay for current
liabilities. As a percentage of total cash costs, these current liabilities represented 4.9 percent,
4.2 percent, and 3.3 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 $73,156 for all
nurseries, $199,217 for the largest, and $4,380 for the smallest firms. As a percentage of
annual sales, these amounts represented 14.4 percent, 17.3 percent, and 5.5 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 $209,799 for all nurseries, $457,132 for
the largest firms, and $50,239 for the smallest nurseries.
Total current assets averaged $303,996 for all nurseries, $697,716 for the largest, and
$56,953 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 $374,243 for all nurseries, $654,210 for the
largest, and $146,192 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
25 Central Fla. Foliage Nurseries, 1987


Dollars (Thousands) M current
1200
1200 Long Te
.1000..... -... ...... ..... r I-- Current
1111 l Long Te
800 .................................. ........ .............. .................. . ...... Net W ol

600

400 -




0 ...................................
2 OOo :::::

o
r


All Nurs,


Largest


Smallest











current value of $213,229 for all nurseries, $421,645 for the largest, and $81,581 for the
smallest nurseries. As a percentage of the original investment, these current values
represented 57.0 percent for the average of all nurseries, 64.5 percent for the largest
nurseries, and 55.8 percent for the smallest. Thus, the largest nurseries had the least depleted
long term assets.
Total assets. The sum of current and long term assets gives average total assets of
$517,224 for all nurseries, $1,119,361 for the largest, and $138,534 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 $19,313 for all nurseries, $38,107 for the largest, and $2,425
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 4.8 for all nurseries, 6.3
for the largest firms, and 2.8 for the smallest nurseries.
Long term liabilities include notes payable and mortgages. They averaged $154,676 for all
nurseries, $247,825 for the largest, and $63,941 for the smallest nurseries. The ratio of current
liabilities to long term liabilities was .13 for all nurseries, .15 for largest, and .04 for the
smallest firms.
Total liabilities. The sum of current and long-term liabilities gives average total
liabilities of $173,989 for all nurseries, $285,932 for the largest, and 66,365 for the smallest
firms. The ratio of total assets to total liabilities were, 3.0, 3.9, and 2.1, 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 was $343,235, for the largest it was $833,429, and for the
smallest $72,169.














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 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 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 ($503,536) is subtracted total deductions ($428,158) and the operator's
salary ($31,541) to give return to capital ($43,837). This is divided by total gain to yield an
average net profit margin of 8.7 percent.



Asset Management
Current assets ($303,996) plus long term assets ($213,229) make total assets of $517,224.
This is divided into total gain ($503,536) to give an asset turnover rate of 1.03. Asset turnover
multiplied by net profit margin (8.7 percent) results in an average return to capital of 8.5
percent.



Leverage Management
Current liabilities ($19,313) plus long term liabilities ($154,676) gives average total
liabilities of $173,989. This is subtracted from total assets to yield average net worth of
$343,235. Total liabilities plus net worth ($517,224) divided by net worth gives a leverage
factor of 1.51. This is really the ratio of total assets under one's control to net worth.
Leverage times rate of return to capital (8.5 percent) gives a return on net worth of 12.8
percent.































































Figure 20.--Total profitability model,
1987


25 foliage nurseries in Central Florida,











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.






















... .* ..
V :: -,











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



List of Appendix Data Tables


Appendix Table

1 Size of business, 25 foliage nurseries in Central Florida, 1987 . . .

2 Rates of production, 25 foliage nurseries in Central Florida, 1987 . .

3 Land use indicators, 25 foliage nurseries in Central Florida, 1987 . . .

4 Labor use indicators, 25 foliage nurseries in Central Florida, 1987 . .

5 Capital use indicators, 25 foliage nurseries in Central Florida, 1987 . .

6 Costs by expense category, 25 foliage nurseries in Central Florida,
1987 . . . . . . . . .

7 Percent of total costs by expense category, 25 foliage nurseries in Central
Florida, 1987 . . . . . . . .

8 Costs per square foot of bed and bench space, 25 foliage nurseries in Central
Florida, 1987 . . . . . . . .

9 Costs per square foot of propagating and finishing space, 25 foliage nurseries
in Central Florida, 1987 . . . . . . .

10 Costs per dollar's worth of production, 25 foliage nurseries in Central
Florida, 1987 . . . . . . . .

11 Cost per dollar's worth of sales (no adjustment for change in plant
inventory), 25 foliage nurseries in Central Florida, 1987 . . .

12 Income summary, 25 foliage nurseries in Central Florida, 1987 . . .

13 Statement of Financial Position, 25 foliage nurseries in Central
Florida, 1987 . . . . . . . .


Page

S35

S35

S35

S36

S36


37


S38


S39


S40


S 41


. 42

. 43


S43


I












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/lE. 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
Figure 20. Instructions for Appendix Table 12

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 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 .


for you to complete the profitability model in
are as follows:

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










Instructions for Appendix Table 13 are as follows:


*1


*1

*1
*1
*1


]
]
]


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 002, 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
calculation method described above, but once the
automatically for you.


the same data requested for the manual
data is entered, all calculations will be done


Line A: Cash on hands . . .. Appendix Table 1 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 I 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
.ine N: Long term liabilities . ... from your records, not shown in
earlier tables
-ine O: Total liabilities . ... .sum line M and N
ine P: Net worth . . . line L minus line O
Line Q: Total liabilities and net worth. sum lines O and P










Appendix Table 1--Size of business, 25 foliage nurseries in Central FLorida, 1987.
==== = ===-S S === S= = ===SSS=S ===SSS SSSSS==B =5==SB=======
unit ALL Largest Smallest Your
Nurseries Third (8) Third (8) Nursery


A Value of own plants sold . . .. $
B Total value of production. . .. .


C Space for propagating & finishing. . ... sq.ft. 96,184
D Space for stock plants . . ... sq.ft. 13,263

E Total bed & bench space. . . sq.ft. 109,447


F Total nursery area . . .
G

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 . .


507,531 1,150,255 80,113
499,339 1,140,174 80,326


. sq.ft. 167,798
acres 3.85

. number 14.48


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 . . .


188,043
89,399
40,997
82,834
21,756
73,156
21,041

517,224


188,043
158,999
42,097
111,350
21,756
73,156
21,041

616,440


165,743
25,040

190,783


25,522
3,949

29,470


257,263 47,537
5.91 1.09


32.27


397,298
115,279
97,059
209,308
59,834
199,217
41,368

1,119,361


397,298
332,779
100,496
286,495
59,834
199,217
41,368

1,417,486


3.08


47,040
47,600
15,491
18,489
3,199
4,380
2,335

138,534


47,040
47,600
15,491
18,489
3,199
4,380
2,335

138,534


Appendix Table 2--Rates of production, 25 foliage nurseries in Central Florida, 1987.

unit All Largest Smallest Your
Nurseries Third (8) Third (8) Nursery

Plant sales/sq.ft. bed & bench space(Table 1A/1E) cents 463.7 602.9 271.8
Value of production/sq.ft. . .(Table 1B/1E) cents 456.2 597.6 272.6

Sales/sq.ft. prop. & finish, space .(Table 1A/1C) cents 527.7 694.0 313.9
Value of production/sq.ft. .... .(Table 1B/1C) cents 519.2 687.9 314.7

Sales/acre total nursery area. .(Table 1A/1G) S 131,754 194,762 73,411
Value of production/acre ..... .(Table 1B/1G) $ 129,627 193,055 73,605




Appendix Table 3--Labor Use Indicators, 25 foliage nurseries in Central Florida, 1987.
unit ALL Largest Smallest Your
Nurseries Third (8) Third (8) Nursery
------------'------------------------------------------


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


S 35,040
$ 34,475


35,649 25,970
35,336 26,039


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


=Full-time equivalent person (2080 hours/year).
C Full-time equivalent person (2080 hours/year).


7,556
6,641
11,585


5,913
5,137
7,973


9,553
8,273
15,410















Appendix Table 4--Land Use Indicators, 25 foliage nurseries in Central Florida, 1987.

unit ALL Largest Smallest Your
Nurseries Third (8) Third (8) 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/1F) 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) %


269.9

8,753
8.0

167,798


109,447
65.2

96,184
87.9

13,263
12.1


289.5 170.3

17,135 1,598
9.0 5.4

257,263 47,537


190,783
74.2


29,470
62.0


165,743 25,522
86.9 86.6

25,040 3,949
13.1 13.4


Appendix Table 5--Capital Use Indicators, 25 foliage nurseries in Central Florida, 1987.

unit ALL Largest Smallest Your
Nurseries Third (8) Third (8) 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 IX/1G)

---Managed Capital Per Person* In---
Growing plants . . ... (Table 10/1H)
Bldgs, fences, wells. ... (Table 1R/1H)
Machinery & equipment ....... (Table 1S/1H)
Land. . . . ... (Table 1T/1H)
Accounts receivable . ... (Table 1V/1H)
---------Managed Capital Per Acre In-------
Growing plants. . .... (Table 1Q/1G)
Bidgs, fences, wells. . .. (Table 1R/1G)
Machinery & equipment ...... (Table 1S/1G)
Land. . . . ... (Table 1T/1G)
Accounts receivable . ... (Table 1V/1G)


-------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


X 98.1
X 82.3

S 35,710
S 42,560


102.8 57.8
81.1 57.8

34,691 44,908
43,931 44,908


134,270 189,531 126,943
160,026 240,010 126,943


12,983
10,977
2,906
7,688
1,502


48,815
41,276
10,928
28,906
5,648

30.5
25.8
6.8
18.1
3.5
11.9
3.4

100.0


10/lX)
1Rh X)
15/ix)
iT/iX)
1U/lx)
1V/1X)
1W/1X)


TOTAL. . . . . . .


12,313
10,313
3,115
8,879
1,854


67,271
56,347
17,016
48,510
10,131

28.0
23.5
7.1
20.2
4.2
14.1
2.9

100.0


15,249
15,430
5,022
5,994
1,037


43,104
43,618
14,195
16,942
2,931

34.0
34.4
11.2
13.3
2.3
3.2
1.7

100.0


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











Appendix Table 6--Costs by expense category, 25 foliage nurseries in Central Florida, 1987.
=BSS====S==E==S=SS===S===BS====a===S=SS==SSS=SS=SB==S==== :::SS5SS :SSSS ::=B=SS========
unit ALL Largest Smallest Your
Nurseries Third (8) Third (8) Nursery


Operator's salary ............... S 31,541 54,746 15,480
Other wages .................. S 156,642 376,227 14,245

LABOR TOTAL .................. S 188,183 430,973 29,725

Plants & seeds. ................. $ 76,976 167,087 11,219
Containers. ................... S 25,590 58,590 3,817
Heating fuel.................. $ 10,642 21,353 3,329
Peat & soil .................. S 11,537 24,423 1,861
Fertilizers & lime . . . ... S 6,555 14,934 912
Pesticides & chemicals. . . ... 6,683 14,380 1,090
Shipping supplies . . . .. 25,598 66,153 2,713
Other production supplies . . .. S 6,718 16,769 1,012

SUPPLIES TOTAL. ................ $ 170,300 383,688 25,954

Facility repairs. ................ 9,019 17,660 3,208
Equipment operation .............. S 5,864 8,732 1,276

OTHER PRODUCTION COSTS TOTAL. .......... S 14,884 26,392 4,484

Travel. .................... 2,027 4,896 38
Insurance . . . .... $. 10,060 18,452 2,354
Telephone ................... $ 4,217 8,276 1,448
Electricity .................. $ 6,075 11,203 1,567
Taxes & liscenses . . .... .. 3,244 5,272 1,922
Advertising .................. $ 2,195 4,707 154
Rent-Land/buildings .............. $ 18,930 57,958 0
Other cash costs. . . . ... S 11,169 23,469 2,658

ADMINISTRATIVE & OVERHEAD COSTS TOTAL ..... $ 57,917 134,232 10,141

TOTAL CASH COSTS. .............. S 431,283 975,286 70,304

Depreciation-machinery/equipment. ....... S 11,104 25,909 3,857
Depreciation-buildings/etc. .......... $ 17,312 21,599 8,249
Supply inventory decrease . . .. $ 0 0 0
Interest on capital . . .... .$ 62,067 134,323 16,624

TOTAL NON-CASH COSTS. ............. $ 90,482 181,831 28,731
TOTAL ALL COSTS..............==.. =====521,766 1,157,117 99,035
TOTAL ALL COSTS ................ $ 521,766 1,157,117 99,035


i
















Appendix Table 7--Percent of total costs by expense category, 25 foliage nurseries in
Central Florida, 1987.
unit ALL Largest Smallest Your
Nurseries Third (8) Third (8) Nursery
...............................................................--------------------------........................................----------

Operator's salary ............... X 6.0 4.7 15.6
Other wages ................. X 30.0 32.5 14.4

LABOR TOTAL .................. X 36.1 37.2 30.0

Plants & seeds. ................ X 14.8 14.4 11.3
Containers. .................. % 4.9 5.1 3.9
Heating fuel. ................. % 2.0 1.8 3.4
Peat & soil ... .... ..... ... .. 2.2 2.1 1.9
Fertilizers & lime.. ............... X 1.3 1.3 0.9
Pesticides & chemicals. ............ X 1.3 1.2 1.1
Shipping supplies .............. % 4.9 5.7 2.7
Other production supplies ......... X 1.3 1.4 1.0

SUPPLIES TOTAL. ................. X 32.6 33.2 26.2

Facility repairs. ............... X 1.7 1.5 3.2
Equipment operation .............. 1.1 0.8 1.3

OTHER PRODUCTION COSTS TOTAL .......... X 2.9 2.3 4.5

Travel. .. .... ... ..... ... X 0.4 0.4 0.0
Insurance .... ... ..... ... .. X 1.9 1.6 2.4
Telephone ................... X 0.8 0.7 1.5
Electricity . . . .. . 1.2 1.0 1.6
Taxes & Liscenses ............... X 0.6 0.5 1.9
Advertising ................. % 0.4 0.4 0.2
Rent-land/buildings .............. X 3.6 5.0 0.0
Other cash costs. ............... X 2.1 2.0 2.7

ADMINISTRATIVE & OVERHEAD COSTS TOTAL ..... X 11.1 11.6 10.2

TOTAL CASH COSTS. ............... X 82.7 84.3 71.0

Depreciation-machinery/equipment. ....... X 2.1 2.2 3.9
Depreciation-buildings/etc. .......... X 3.3 1.9 8.3
Supply inventory decrease ........... X 0.0 0.0 0.0
Interest on capital .............. X 11.9 11.6 16.8

TOTAL NON-CASH COSTS. ............. 17.3 15.7 29.0

TOTAL ALL COSTS .............. .. % 100.0 100.0 100.0
-====== ============ = ===========













Appendix Table 8--Costs per square foot of bed and bench space, 25 foliage nurseries in
Central Florida, 1987.

unit ALL Largest Smallest Your
Nurseries Third (8) Third (8) Nursery


Operator's salary .............. .cents 28.8 28.7 52.5
Other wages .................. cents 143.1 197.2 48.3

LABOR TOTAL ................. cents 171.9 225.9 100.9

Plants & seeds. ............... .cents 70.3 87.6 38.1
Containers. ................. .cents 23.4 30.7 13.0
Heating fuel...................cents 9.7 11.2 11.3
Peat & soil ................. .cents 10.5 12.8 6.3
Fertilizers & Lime.. .............. .cents 6.0 7.8 3.1
Pesticides & chemicals. .............cents 6.1 7.5 3.7
Shipping supplies ............... cents 23.4 34.7 9.2
Other production supplies ...........cents 6.1 8.8 3.4
.. ....... ........... .........--
SUPPLIES TOTAL. ............... .cents 155.6 201.1 88.1

Facility repairs. .............. .cents 8.2 9.3 10.9
Equipment operation ..............cents 5.4 4.6 4.3

OTHER PRODUCTION COSTS TOTAL. ...........cents 13.6 13.8 15.2

Travel. .................. .cents 1.9 2.6 0.1
Insurance ................... cents 9.2 9.7 8.0
Telephone ................... cents 3.9 4.3 4.9
Electricity .................. cents 5.6 5.9 5.3
Taxes & Liscenses ............... .cents 3.0 2.8 6.5
Advertising .................. cents 2.0 2.5 0.5
Rent-Land/buildings ..............cents 17.3 30.4 0.0
Other cash costs. .............. .cents 10.2 12.3 9.0

ADMINISTRATIVE & OVERHEAD COSTS TOTAL ..... cents 52.9 70.4 34.4

TOTAL CASH COSTS. .............. .cents 394.1 511.2 238.6

Depreciation-machinery/equipment. ........ cents 10.1 13.6 13.1
Depreciation-buildings/etc. .......... cents 15.8 11.3 28.0
Supply inventory decrease .......... .cents 0.0 0.0 0.0
Interest on capital ..............cents 56.7 70.4 56.4

TOTAL NON-CASH COSTS. ...............cents 82.7 95.3 97.5

TOTAL ALL COSTS ................ cents 476.7 606.5 336.0
---- = -- -- -- -- -- -- -- -- ----- -- --- ------ --














Appendix Table 9--Costs per square foot of propagating and finishing space, 25 foliage nurseries
in Central Florida, 1987.


unit ALL Largest
Nurseries Third (8)
-------------------~---~33.0-


Operator's salary . . .... .cents 32.8
Other wages . . . .... .cents 162.9

LABOR TOTAL . . . .... .cents 195.6

Plants & seeds. . . . .. .cents 80.0
Containers . . . ... .cents 26.6
Heating fuel . . . ..cents 11.1
Peat & soil . . . .. cents 12.0
Fertilizers & ime . . . .cents 6.8
Pesticides & chemicals. . . .cents 6.9
Shipping supplies . . . .cents 26.6
Other production supplies . . .cents 7.0

SUPPLIES TOTAL. . . . .. .cents 177.1

Facility repairs . . . ..cents 9.4
Equipment operation . . .cents 6.1

OTHER PRODUCTION COSTS TOTAL. . . .cents 15.5

Travel ..................... cents 2.1
Insurance . . . .... cents 10.5
Telephone ................... cents 4.4
Electricity .................. cents 6.3
Taxes & Liscenses . . .... .cents 3.4
Advertising .................. cents 2.3
Rent-Land/buiLdings . . . .cents 19.7
Other cash costs. . . . .cents 11.6

ADMINISTRATIVE & OVERHEAD COSTS TOTAL . .cents 60.2

TOTAL CASH COSTS. . . . .cents 448.4

Depreciation-machinery/equipment . ..cents 11.5
Depreciation-buildings/etc . .. ..cents 18.0
Supply inventory decrease . . ..cents 0.0
Interest on capital . . . .cents 64.5

TOTAL NON-CASH COSTS . . .. .cents 94.1

TOTAL ALL COSTS . . .... .cents 542.5


33.0
227.0

260.0

100.8
35.3
12.9
14.7
9.0
8.7
39.9
10.1

231.5

10.7
5.3

15.9

3.0
11.1
5.0
6.8
3.2
2.8
35.0
14.2

81.0

588.4

15.6
13.0
0.0
81.0

109.7

698.1


Smallest Your
Third (8) Nursery


60.7
55.8

116.5

44.0
15.0
13.0
7.3
3.6
4.3
10.6
4.0

101.7

12.6
5.0

17.6

0.2
9.2
5.7
6.1
7.5
0.6
0.0
10.4

39.7

275.5

15.1
32.3
0.0
65.1

112.6

388.0


DIDI=I'Pfl=IIDIIIIrtrlPttllOl=I=D='-


~----


DII==5=--IS===tLI===DILL==C==SE===I-====














Appendix Table 10--Costs per dollar's worth of production, 25 foliage nurseries in
Central Florida, 1987.
===B=== =====SSS==S=SSS= = ===SSSS=B=E=====S=S==SSS ==S == ===============e=
unit All Largest Smallest Your
Nurseries Third (8) Third (8) 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 . .


.cents
.cents

.cents


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

. . .cents


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


OTHER PRODUCTION COSTS TOTAL.


.cents
.cents


. . .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 . . . .

TOTAL NON-CASH COSTS . . .

TOTAL ALL COSTS . . . .


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

.cents

.cents

.cents
.cents
.cents
.cents

.cents

.cents


6.3
31.4

37.7

15.4
5.1
2.1
2.3
1.3
1.3
5.1
1.3

34.1

1.8
1.2

3.0

0.4
2.0
0.8
1.2
0.6
0.4
3.8
2.2

11.6

86.4

2.2
3.5
0.0
12.4

18.1

104.5


4.8
33.0

37.8

14.7
5.1
1.9
2.1
1.3
1.3
5.8
1.5

33.7

1.5
0.8

2.3

0.4
1.6
0.7
1.0
0.5
0.4
5.1
2.1

11.8

85.5

2.3
1.9
0.0
11.8

15.9

101.5


19.3
17.7

37.0

14.0
4.8
4.1
2.3
1.1
1.4
3.4
1.3

32.3

4.0
1.6

5.6

0.0
2.9
1.8
2.0
2.4
0.2
0.0
3.3

12.6

87.5

4.8
10.3
0.0
20.7

35.8

123.3


===-2========5===r====EIl=========--=I==
















Appendix Table 11--Costs per dollar of sales, 25 foliage nurseries in Central Florida, 1987.
== = ===5 = z = ES === =E=S==l=S ====P=P IIs =====mmSSS =====S==I= = = = = m ========="=z============-
unit ALL Largest Smallest Your
Nurseries Third (8) Third (8) Nursery
......................................................................................................--------------------------------------------

Operator's salary ............... cents 6.2 4.8 19.3
Other wages .................. cents 30.9 32.7 17.8

LABOR TOTAL ..................cents 37.1 37.5 37.1 ___

Plants & seeds. ................. .cents 15.2 14.5 14.0
Containers. ................. .cents 5.0 5.1 4.8
Heating fuel...................cents 2.1 1.9 4.2
Peat & soil .................. cents 2.3 2.1 2.3
Fertilizers & lime. ............. ..cents 1.3 1.3 1.1
Pesticides & chemicals. .............cents 1.3 1.3 1.4
Shipping supplies ............... cents 5.0 5.8 3.4
Other production supplies ........... cents 1.3 1.5 1.3

SUPPLIES TOTAL. ............... .cents 33.6 33.4 32.4

Facility repairs. .............. .cents 1.8 1.5 4.0
Equipment operation .............. cents 1.2 0.8 1.6

OTHER PRODUCTION COSTS TOTAL. .......... .cents 2.9 2.3 5.6

Travel. .....................cents 0.4 0.4 0.0
Insurance .................. .cents 2.0 1.6 2.9
Telephone ................... cents 0.8 0.7 1.8
Electricity .................. cents 1.2 1.0 2.0
Taxes & liscenses .............. .cents 0.6 0.5 2.4
Advertising ..................cents 0.4 0.4 0.2
Rent-Land/buildings ..............cents 3.7 5.0 0.0
Other cash costs. .............. .cents 2.2 2.0 3.3

ADMINISTRATIVE & OVERHEAD COSTS TOTAL .... .cents 11.4 11.7 12.7

TOTAL CASH COSTS. .............. .cents 85.0 84.8 87.8

Depreciation-machinery/equipment. ..... ..cents 2.2 2.3 4.8
Depreciation-buildings/etc. .......... cents 3.4 1.9 10.3
Supply inventory decrease .......... .cents 0.0 0.0 0.0
Interest on capital .............. cents 12.2 11.7 20.8

TOTAL NON-CASH COSTS. ...............cents 17.8 15.8 35.9

TOTAL ALL COSTS ................ cents 102.8 100.6 123.6
===============================E==========0= ====t========================











Appendix Table 12--Income summary, 25 foliage nurseries in Central Florida, 1987.


unit ALL Largest Smallest Your
Nurseries Third (8) Third (8) Nursery

A Value of own plants sold ......... .. $ 507,531 1,150,255 80,113
B Change in plant inventory value. ....... $ (8,192) (10,080) 213
C Increase in supply inventory ......... $ 1,112 4,667 113
D Miscellaneous cash income. .......... S 3,085 6,761 618

E TOTAL GAIN .................. S 503,536 1,151,603 81,056

F Deduct cash costs except operator's salary (399,742) (920,540) (54,824)
G Deduct non-cash costs except interest. (28,415) (47,508) (12,107)

H Total Deductions ............... S (428,158) (968,048) (66,930)
2II==5*5I= CE=SCSCWWCE =IWEE=
I NET NURSERY INCOME .............. S 75,378 183,555 14,126
J Operator's salary or time value. ....... S (31,541) (54,746) (15,480)

K RETURN TO CAPITAL. .............. $ 43,837 128,809 (1,354)
L Rate of Return to Capital . . ... 8.48 11.51 -0.98



Appendix Table 13--Statement of financial position, 25 foliage nurseries in Central Florida, 1987.


unit ALL Largest Smallest Your
Nurseries Third (8) Third (8) Nursery
.......................................................................................................

CURRENT ASSETS- - - - - - - - - -.
A Cash/checkbook balance ............ S 21,041 41,368 2,335
B Accounts receivable. ............. $ 73,156 199,217 4,380
C Plant inventory value. ............ S 188,043 397,298 47,040
D Supply inventory value . . .. 21,756 59,834 3,199

E Total CURRENT Assets ............. S 303,996 697,716 56,953

LONG TERM ASSETS- - - - - - - ............
F Machinery & Equipment. ............ $ 96,627 210,266 36,164
G Buildings & Fixtures . . .... $ 194,783 234,637 91,539
H Land ................... .. S 82,834 209,308 18,489

I Sub-total (original cost). .......... S 374,243 654,210 146,192

J Less Accumulated Depreciation. ........ $ (161,015) (232,565) 64,611

K Total LONG TERM Assets ............ S 213,229 421,645 81,581 __

L TOTAL ASSETS. .................. $ 517,224 1,119,361 138,534


M Current Liabilities. . . S 19,313 38,107 2,425
N Long Term Liabilities. . . 154,676 247,825 63,941

0 TOTAL LIABILITIES ................ $ 173,989 285,932 66,365

P NET WORTH. ..................... 343,235 833,429 72,169

0 TOTAL LIABILITIES AND NET WORTH. ............. $ 517,224 1,119,361 138,534

D=-~I III05III~-=~===SI~lltP O=C