• 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
 Total profitability model
 Total profitability model
 Definitions
 Appendix tables
 Back Cover














Title: Business analysis of foliage plant nurseries in Central Florida
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Permanent Link: http://ufdc.ufl.edu/UF00026151/00008
 Material Information
Title: Business analysis of foliage plant nurseries in Central Florida
Series Title: Economic information report
Alternate 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
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 867)
Copyright Date: 1989
Frequency: annual
regular
 Subjects
Subject: 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 )
 Notes
Additional Physical Form: Electronic reproduction of copy from George A. Smathers Libraries, University of Florida also available.
General Note: Description based on 1980: title from cover.
 Record Information
Bibliographic ID: UF00026151
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 - AAB7745
notis - ABU5744
alephbibnum - 000318895
oclc - 09222156
lccn - sn 91022498
 Related Items
Preceded by: Business analysis for foliage and potted flowering plant nurseries in Central Florida

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
        Page 15
        Page 16
    Income summary
        Page 17
        Page 18
        Page 19
        Page 20
    Total profitability model
        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

g67 ( Novemner 1989


Business Analysis of Foliage
Plant Nurseries in Central
Florida, 1988


Central Science
Libarey
JAN 10 1990
University of Florida

J. Robert ari
Ati H1lfi


Foadamd'Aumisr LiS. ."' / kIft-OFJq pII(ImI8OMWSrom-
UuiSIdt %" Phisr GaWnhstls, P4.


Oreaftf-867










ACNMOWLEDGEMENTS

This report was made possible by coopedtiag Gentral foliage nursery operators who male available their
laoduction.aaedMunting records o a eomfid ,iabaEsis for analysis and averaging. Assistance was provided
,,y-.-i--~l ndEla Oeseiotal rnt~ieu*ture Agents Bruce Barmby, Gerri Cashin, Cathy Neal,
a- t JetakSousedHl. Acknowledge at and appreciation of the help received, however, does not alter the
iiethat errors in the analyses or i the interpretation of the information presented herein are the sole
responsibility of the authors.


i.
i
''








Central 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 ...............
Monthly sales ..............
Land, Labor and Capital .........
Land: bed and bench space ......
Labor: full-time equivalent persons
Capital: owned and managed ....
Productivity Indicators .............
Land Use ...................
Labor Use ...................
Capital Use ..................
Capital turnover .............
Capital managed per person ....
Capital managed per acre ......
Distribution of managed capital ..
Costs of Production ...............
Costs by Expense Category .......
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 Benc
Cost Per Square Foot of Propagating ai
Cost Per Dollar's Worth of Production
Cost Per Dollar's Worth of Sales ...


. . . . . .... . . . .. . . ..o o .o o . . . .
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. . . . . . . . . . . . . . . . . . . . .
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.o . . . . .o.. . . . . . . . . . . . . ..
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.o . . . .. . . . . . . . . . . . . . . .
. . ... . . ..o.o o. ..oo o . . .o . o o o o o o .
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... ....... .............. ... ...... ......
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h Space ..................................
id Finishing Space .. .. ... .. .. .. ... .. .. ... .
. . . . . . . . . . . . . . . . . . . .
. . .. .o . . ..o. ..o. . . .. . .. .. . .


Page
Sv
v
vi








Central Florida Foliage


TABLE OF CONTENTS (Continued)


Income Summary ...
Total Gain ......
Cost Deductions and
Return on Capital


Net Nurs
......


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. . . . . .
ery Income .
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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 ...........


Page
17
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17
17
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S20
20
S21
S21
S21
* 21
* 21
S23
. 24
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S26







Central Florida Foliage


LIST OF FIGURES


Page


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 Model .......................




LIST OF TABLES


Table Page

1 Sales, bed and bench space, people and capital, 25 foliage nurseries in Central Florida, 1988 .... 3
2 Costs of production, 25 foliage nurseries in Central Florida, 1988 ........................ 12
3 Income summary, 25 foliage nurseries in Central Florida, 1988 ........................ 18






Central Florida Foliage


LIST OF APPENDIX DATA TABLES
Appendix Table Page

1 Size of business, 25 foliage nurseries in Central Florida, 1988 ......................... 26
2 Rates of production, 25 foliage nurseries in Central Florida, 1988 ....................... 27
3 Land use indicators, 25 foliage nurseries in Central Florida, 1988 ....................... 27
4 Labor use indicators, 25 foliage nurseries in Central Florida, 1988 ....................... 27
5 Capital use indicators, 25 foliage nurseries in Central Florida, 1988 ...................... 28
6 Costs by expense category, 25 foliage nurseries in Central Florida, 1988 ................... 29
7 Percent of total costs by expense category, 25 foliage nurseries in Central
Florida, 1988 .................. ..................... .................. 30
8 Costs per square foot of bed and bench space, 25 foliage nurseries in Central
Florida, 1988 ................. ... .... ................................ 31
9 Costs per square foot of propagating and finishing space, 25 foliage nurseries
in Central Florida, 1988 .................. ............................... 32
10 Costs per dollar's worth of production, 25 foliage nurseries in Central
Florida, 1988 .............................. ........................... 33
11 Cost per dollar's worth of sales (no adjustment for change in plant
inventory), 25 foliage nurseries in Central Florida, 1988 ............................ 34
12 Income summary, 25 foliage nurseries in Central Florida, 1988 ......................... 35
13 Statement of Financial Position, 25 foliage nurseries in Central Florida, 1988 ............... 35
14 Financial Ratios and other Profitability Indicators, 25 foliage nurseries in
Central Florida, 1988 . ................................................................. 36







Central Florida Foliage


BUSINESS ANALYSIS OF FOUAGE NURSERIES IN CENTRAL FLORIDA, 19881
J. Robert Strain and Alan Hodges2


INTRODUCTION
This publication presents information on sales,
costs, returns and production efficiency for 25
wholesale foliage plant nurseries in Central Florida
for 1988. 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.


PROCEDURE
The information presented in this report is 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. In fact,
the sample is possibly biased toward some of the
more efficient foliage plant nurseries in Central
Florida, rather than being typical of the industry.
Participating firms were located in the Florida


counties of Hardee, Lake, Marion, Manatee, Orange
and Seminole.

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. Nursery operators received an analysis for
their own operation, which contained similar
information as used in this report, shortly after
submitting data.

Not all nursery operators drew a 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 in valuing plant inventories, 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.


1. This document was published as Economic Information Report 267, Florida Cooperative Extension Service, Institute of Food and Agricultural
Sciences, University of Florida, Gainesville, November 1989.
2. J. Robert Strain is an Extension Economist and Alan Hodges is an Economic Analyst, IFAS, Food & Resource Economics Department,
Gainesville, FL 32611.







Central Florida Foliage


The tables and figures present simple average
values for all 25 nurseries, averages for the largest
third of firms (7), and for the smallest third of firms
(8). 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 $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
(8) for the particular measure, and the lower line
designated "lowest rates" is the average for the
lowest third (8).


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)
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 $534,446 for all nurseries, $1,312,547 for
the largest nurseries, and $74,752 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 change was positive for the average
of all nurseries ($32,985) and the largest firms
($117,599), and was negative for the smallest
nurseries (-$1,981), giving a total value of production
of $567,430, $1,430,146, and $72,772 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
February, and April. Sales for the first quarter
accounted for 47 percent of the year's total sales.
Sales for April, the highest month, were $68,255,
which was 126 percent greater than those for
December, the lowest month ($30,208).







Central Florida Foliage


Table 1--Sales, bed and bench space, people, and capital: 25 foliage nurseries in Central Florida, 1988


All 25 Largest Smallest
unit Nurseries Third (7) Third (8)
.......................................................................................................
Value of own plants sold . . . .... .. 534,446 1,312,547 74,752
Change in inventory value. . . . ... S 32,985 117,599 (1,981)

Total value of production. . . . ... $ 567,430 1,430,146 72,772

Total bed and bench space. . . . .... .sq.ft. 106,668 245,653 28,604

Full-time equivalent persons . . . .number 17.09 45.44 3.18

Total Owned Capital. . . . . ... 531,220 1,150,983 149,697
Total Leased Capital . . . . ... .. $ 23,054 62,143 5,022

Total Managed Capital. . . . . . $ 554,274 1,213,126 154,720



Figure 1

Sales and Value of Production

25 Central Fla. Foliage Nurseries, 1988


Dollars Cthousands)
r-


All Nurseries


M Sales


Largest Third Smallest Third


-Value of Productlon


1600

1400

1200

1000

800

600

400

200

0


m


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


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






Central Florida Foliage


Land, Labor and Capital
Land: bed and bench space. Total bed and bench
space averaged 106,668 square feet for all nurseries,
245,653 square feet for the largest nurseries, and
28,604 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 96,127 square feet for all
nurseries, 218,364 square feet for largest nurseries,
and 26,361 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 10,541 square feet for
all nurseries, 27,290 square feet for the largest firms,
and 2,243 square feet for the smallest nurseries.
Total nursery area, which includes drives, roads,
parking lots, office, packing house and the like,
averaged 4.1 acres for all nurseries, 7.9 acres for the
largest firms, and 1.0 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 17.1, for the largest it was 45.4, and
for the smallest nurseries it was 3.2 (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 and cash on hand. Capital
owned averaged $531,220 for all nurseries, $1.151
million for the largest firms, and $149,697 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 $554,274 for all
nurseries, $1.213 million for the largest nurseries,
and $154,720 for the smallest nurseries (Table 1 and
Figure 5).


Figure 2

Monthly Sales
25 Central Fla, Foliage Nurseries, 1988

Dollars (thousands)
200


150

Largest
100 .-....---------" All Nurseries
SSmaI lest




0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month







Central Florida Foliage


Labor: N
25 Central Fla.


Full-time Equiv.


Figure 4

umber of Persons
Foliage Nurseries, 1988


Persons C2080 nrs/yr)


All Nurseries Largest Third


Figure 3

Land: Bed and Bench Space
25 Central Fla. Foliage Nurseries, 1988


Square Feet (thousands)
300






50 ........ ............ ................................ ......................... .....
200

150 -

100

50

0
All Nurseries Largest Third Smallest Third


I .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..


Smallest Third


10"
0 '-







Central Florida Foliage


Figure 5
Capital Managed
25 Central Fla. Foliage Nurseries, 1988


Dollars (Thousands)


14UU

1200

1000


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


800 ............. .........


600 -

4100 -


All Nurseries Largest Third SmaI lest Third
All Nurseries Largest Third Smnal lest Third


M Capital Leased
l Capital Owned


Capital managed


Productivity Indicators

Land Use (Appendix Table 2)
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 $5.90 for all nurseries, $6.55 for
the largest firms, and $2.76 for the smallest.

Value of production per square foot of total bed
and bench space (includes stock plant space) was
$5.32 for all nurseries, $5.82 for the largest firms,
and $2.54 for the smallest (Figure 6). Firms with
the highest annual rates of production averaged
$9.13 per square foot, while those with the lowest
averaged $2.43 per square foot.

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 $138,780; for the


is owned plus leased.


largest nurseries, $182,110; and for the smallest
nurseries, $77,407.

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.







Central 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 273 percent. This means that annual plant sales
amounted to 2.7 times the average value of plant
inventory. Vacant bed and bench space averaged
12.0 percent of the total for all nurseries, 12.8
percent for the largest third, and 8.9 percent for the
smallest third (Appendix Table 4).

Labor Use (Appendix Table 3).
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 $33,208 per person for all nurseries,
$31,477 for the largest firms, and $22,851 for the
smallest (Figure 7). Highest rates of production per
person averaged $50,430 per person, and lowest rates
were $20,209.

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 6,243


square feet for all nurseries, 5,407 square feet for
the largest firms, and 8,982 square feet for the
smallest. Stated another way, the number of persons
per acre of bed and bench space averaged 6.98 for
all nurseries, 8.06 for the largest nurseries, and 4.85
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 Product ion/Sq. Ft.
25 Central Fla. Foliage Nurseries, 1988

Do lars/Sq.Ft.
10.00


8.00 ................. .............


6.00 -
H0 Highest Rates
Lowest Rates
4 .00 ......................................................


2.00 .........


0.00


Sm I lest


All Ntrser les Laroest







Central Florida Foliage


Figure 7

Labor Use: Value of Production/Person
25 Central Fla. Foliage Nurseries, 1988


Dollars/Employee Equivalent


30 ..........................

20 ..

10 -


0


Al I Nurseries ~T1aI lest


Largest


Capital Use (Appendix Table 4)

Capital Turnover. Annual turnover of owned
capital value is the percentage that results from
dividing the value of plants sold by the value of
capital owned. Capital turnover for all nurseries
averaged 100.6 percent, for the largest nurseries
114.0 percent, and for smallest 49.9 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 178 percent and lowest rates averaged
37 percent.

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 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 $32,438 for all
nurseries, $26,700 for the largest nurseries, and
$48,538 for the smallest nurseries (Figure 9).
Highest rates for capital managed per person
averaged $83,300, or 2.6 times that of all nurseries,
and lowest rates were $18,952 (Figure 9), or about
one half of the all-nursery average.

Capital Managed Per Acre. Capital managed per
acre of total nursery area averaged $135,562 per acre
for all nurseries, $154,476 for the largest firms, and
$164,574 for the smallest firms (Figure 10). Highest
rates of capital managed per acre were $252,272 and
lowest rates averaged $66,573 (Figure 10).

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 1988. Growing
plants represented the largest share of capital
managed, 35.3 percent.


............... :.; -1 [J Iji J> ...............


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


(Thousands)


Al I Nurseries


SmaI lest







Central Florida Foliage


Figure 8

Capital Turnover

25 Central Fla. Foliage Nurseries, 1988


Sales as a Percentage of Capital Owned


200%



150%


100% F----- ........-.


.. . . . . . .


. .


All Nurser es Largest Sm lest




Figure 9

Capital Managed Per Person

25 Central Fla. Foliage Nurseries, 1988


Do lars per Person CThousands)
100


0 -
80 .................................................................................................................


50 --.................. ... ..................-- -----...................
SHighest Rates

Lowest Rates
4 0 a....... ....t a l............ . ..-- - - - - - - ........................... .


20


0I I N Largest
AlI Nurser les Largest rm I lest


S Highest Rates

Lowest Rates


_ _







Central Florida Foliage


Figure 10

Capital Managed Per Acre

25 Central Fla, Foliage Nurseries, 1988


Dollars/Acre CThousandsD
300

.pn ...... O A ..........


4 Highest Rates

Lowest Rates


All Nurseries Largest Sml lest


Figure 11

Distribution of Managed Capital
25 Central Fla. Foliage Nurseries, 1988


Plants 37.2%


Land 10.99%



Machinery & Equip. 7.6%


accountss receivable 13.2%


lies & Cash 4.7%


Buildings & install 26.4%


Includes capital owned
plus capitaI I eased


. . . . .

......... .


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


.......................... I


...........







Central Florida Foliage


Next in importance was buildings and installations
(25.1 percent), accounts receivable (12.5 percent),
land (10.3 percent), and machinery and equipment
(7.2 percent). Other lesser areas of capital managed
were supplies (5.1 percent) and cash on hand (4.5
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 Central 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 $34,768
for all nurseries, $42,026 for the largest nurseries,
and $21,326 for the smallest nurseries. Wages,
salaries, and associated expenses for employees
averaged $219,077 for all nurseries, $626,473 for the
largest, and $21,893 for the smallest. Thus, total
expenses on wages and salaries averaged $254,077
for all nurseries, $668,499 for the largest, and
$43,219 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 $200,539, for
the largest nurseries $500,198, and for smallest
nurseries $27,815.

Other production costs. Other production costs
are facility repairs/maintenance and equipment
operating costs. For all nurseries they averaged
$26,966, for the largest nurseries $61,221, and for the
smallest $4,897.

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 $58,182 for all nurseries, $146,401
for the largest, and $10,616 for the smallest.

Total cash costs. Total cash costs, including all
items mentioned above, averaged $539,763 for all
nurseries, $1,376,320 for the largest, and $86,546 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 $95,504 for all nurseries, $203,895 for
the largest, and $25,894 for the smallest firms.

Total all costs. The sum of all cash costs and
non-cash allowances averaged $635,268 for all
nurseries, $1,580,214 for the largest, and $112,440 for
the smallest nurseries.

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 which 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.







Central Florida Foliage


Table 2--Costs of Production, 25 foliage plant nurseries in Central Florida, 1988.


AtL 25 Largest Smallest
Nurseries Third (7) Third (8)
..........................................................................................................


LABOR TOTAL . . . . . . .


. . . $254,077 40.0% $668,499 42.3% $43,219 38.4%


SUPPLIES TOTAL. . . . . . . . . ... $200,539 31.6% $500,198 31.7% $27,815 24.7%


OTHER PRODUCTION COSTS TOTAL . . . . ... $26,966 4.2X


ADMINISTRATIVE & OVERHEAD COSTS TOTAL .
TOTAL CASH COSTS . . . . . .
TOTAL NON-CASH COSTS . . . . .
TOTAL ALL COSTS . . . . . . .


$61,221 3.9% $4,897 4.4%


. . .. $58,182 9.2% $146,401 9.3% $10,616 9.4X
. . . $539,763 85.0% $1,376,320 87.1X $86,546 77.0%
. . . $95,504 15.0% $203,895 12.9% $25,894 23.0%
. . . $635,268 100% $1,580,214 100% $112,440 100%


I Figure 12 1


Distr ibuti
25 Central












Supplies
32%


on of Costs of Production
Fla. Foliage Nurseries, 1988


Labor
40%


Non-cash costs
15%


Other prod. costs
4%


Salaries and wages. Salaries and wages (includes
operator) as a percentage of total costs averaged
40.0 percent of total costs for all nurseries, 42.3
percent for the largest, and 38.4 percent for the
smallest nurseries (Table 2). The smallest container
nurseries had a significantly higher percentage of
costs in operator salaries (19.0 percent) than the
industry average (5.5 percent), but a lower
percentage in employees wages and salaries (19.5
percent vs. 34.5 percent). Employees wages and


Admin & overhead
9%


salaries were highest for the largest nurseries (39.6
percent). It is worth noting that the percentage of
total costs for labor is up from sharply from 36.1
percent for all nurseries in 1987.

Production supplies. Expenses for production
supplies averaged 31.6 percent of total costs for all
nurseries, and 31.7 percent for the largest nurseries.
The smallest nurseries had a substantially lower
percentage, 24.7 percent. The greatest share of






Central Florida Foliage


expenses for this category was "plants and seeds"
(11.1, 10.0, and 9.4 percent, respectivley). Expenses
for growing containers ranged from 5.6 to 4.1
percent, and expenses on shipping materials ranged
from 3.2 percent for the smallest nurseries to 6.6
percent for the largest.

Other production costs. Other production costs
averaged 4.2 percent for all nurseries, 3.9 percent for
the largest, and 4.4 percent for the smallest
nurseries.

Administrative and overhead. Overhead costs
averaged 9.2 percent of total costs for all nurseries,
9.3 percent for the largest, and 9.4 percent for the
smallest. Thus, counter to expectations, there is no
indication of economy of scale for overhead
expenses.

Total cash costs. Total cash costs as a percent of
all costs were 85.0 percent for the average of all
nurseries, 87.1 percent for the largest nurseries. The
smallest nurseries were substantially lower, at 77.0
percent.

Non-cash costs. Non-cash costs ("depreciation"
through "interest on capital") averaged 15.0 percent
of total costs for all nurseries, 12.9 percent for the
largest, and 23.0 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: 10.0 percent for
all nurseries, 8.7 percent for largest, and 16.0 percent
for the smallest. Depreciation on equipment,
buildings, and other property improvements was 5.0
percent for all nurseries, 4.2 percent for the largest
third, and 7.1 percent for the smallest third. These
data indicate some economy of larger scale in non-
cash costs.

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, and
ditches, etc. Costs per square foot of bed and bench
space averaged $5.96 for all nurseries, $6.43 for the
largest, and $3.93 for the smallest (Figure 13).
Highest rates of cost per square foot averaged
$12.33, and lowest rates averaged $3.23 (Figure 13).
Cash costs per square foot (excluding depreciation,
interest, etc.) averaged $5.06 for all nurseries, $5.60
for the largest, and $3.03 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. This is because all
nursery costs must be paid for by the plants grown
for sale, as opposed to plants grown for stock.
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 $6.61, largest nurseries $7.24, and
smallest firms $4.27 (Figure 14). Highest rates
averaged $11.89 per square foot and lowest rates
averaged $3.31 (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.







Central Florida Foliage


Figure 13

Costs/Square Foot of Bed & Bench

25 Central Fla. Foliage Nurseries,


Do llars/Sq Ft.


14.00

12.00

10.00

8.00

6 .00

4.00

2.00

0.00


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










All Nurser lesLargest SmallIest


Figure 14

Costs/Square Foot of Prop. & Fin. Space

25 Central Fla. Foliage Nurseries, 1988


Do l ars/Sq.Ft.


SHighest Rates

Lowest Rates

Non-cash costs

Cash Costs


....... 0 __ 0____ _9 ---------- - ...


A N.... serear....est Smallest

Al I Nurserleslaroest Smnal lest


-4 Highest Rates

SLowest Rates

Non-Cash Costs

Cash Costs


14.00

12.00

10.00

8.00

6.00

4.00

2.00

0.00


Space
'1988






Central 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 dollar
costs (Appendix Table 6) by the value of 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 $1.12, for the largest
nurseries it was $1.11, and for the smallest nurseries
$1.55 (Figure 15). Thus, average total costs for all
nurseries were 12 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 $.95 for the average of all nurseries,
$.96 for the largest third, and $1.19 for the smallest
third. Highest rates of costs per dollar value of
production averaged $1.48 and lowest rates were $.88
(Figure 15).

Cash Costs Per Dollar 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. None of the nursery averages covered cash costs
per dollar of sales in 1988. The average for all firms
was $1.01, for largest nurseries $1.05, and for
smallest firms $1.16 (Figure 16). Highest cost firms
averaged $1.28 per dollar of sales, and lowest cost
firms had cash costs of $.76 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.






Central Florida Foliage


Figure 15
Costs Per Do llar 's Worth of Production
25 Central Fla. Foliage Nurseries, 1988


Dollars/Dollar


...e.ve....
VG A N e....sC ...... ......t
........................ .......
...............................
...............................
. .............................

All Nurser i es Largest.


SHighest Rates
Lowest Rates
Non-Cash Costs
- Cash Costs


1.60
1.40
1.20


0.80
0.60
0.40
0.20
0.00


SmnI lest


Figure 16
Cash Costs Per Do II ar 's Worth of Sa I es
25 Central Fla. Foliage Nurseries, 1988

Dollars/Dollar
1.40

1.30 _
1.30 ---------------------------------- -----
1 .3 0 ........ "................ .... ................ .... ................ ... ................... ..........


1 10 ......................................... .................................................... Highest Rates

1.00Breake- Lowest Rates

0 .90 ..........................

0.80.................

0.70
Al I Nurseries Largest Sm I lest


.......................
........................
........................
m-+
........................
........................
........................


I ........................







Central Florida Foliage


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 16
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. Increases in inventories of
supplies averaged $4,829 for all nurseries, $12,576
for the largest firms, and $733 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 $9,147 for all nurseries, $27,700 for the
largest, and $923 for the smallest firms. Total gain
averaged $581,406 for all nurseries, $1,470,422 for
the largest nurseries, and $74,428 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 $536,753 for all nurseries,
$1,400,071 for the largest firms, and $73,151 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
$44,653 for all nurseries, $70,352 for the largest, and
$1,277 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
$9,885 for all nurseries, $28,326 for the largest
nurseries, and minus $20,049 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
comparison, one might look at 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 1.9 percent for all nurseries, 2.5 percent
for the largest nurseries, and minus 13.4 percent for
the smallest. Thus, for every dollar invested in these
foliage nurseries, there was an average return of 1.9
cents. The deficit of 12 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 33.4
percent and lowest rates were minus 34.8 percent
(Figure 18).

Statement of Financial Position
The statement of financial position (Appendix
Table 13) 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.







18

Table 3--Income Summary, 25 foliage plant nurseries in Central Florida, 1988.


Central Florida Foliage


ALL 25 Largest Smallest
unit Nurseries Third (7) Third (8)
.......................................................................................................
TOTAL GAIN . . . . . . .... 581,406 1,470,422 74,428

Total Deductions . . . . . . .. (536,753) (1,400,071) (73,151)

NET NURSERY INCOME . . . . . ... 44,653 70,352 1,277
Operator's salary or time value. . . ... 34,768 42,026 21,326

RETURN TO CAPITAL. . . . . . .. S 9,885 28,326 (20,049)
--Percent. . . . . . . . ... X 1.86 2.46 -13.39




Figure 17

Distribution of Total Gain

25 Central Fla. Foliage Nurseries, 1988


Dollars (Thousands)
1600

1400

1200 ..........................................................................

1000 -...............
P Return to Capital

Return to Operator
600 ...............

400 ........

200 .



-200
All NurserIes Largest Smm lest








Central Florida Foliage


Figure 19

Assets and LiabI cities

25 Central Fla. Foliage Nurseries, 1988


Dollars (Thousands]


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

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


."""" .""""'"""".""".


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















Largest Smallest
Largest SmalIlest


Current Assets
Long Term Assets
I Current Liabilities
-- Long Term LTabl I.
H Net Worth


1200


1000


800


600


400


200


0


A I I Nurs.


Figure 18

Return to Capital

25 Central Fla. Foliage Nurseries, 1988


Percentage Profit to Capital Owned
40%

30% -
30% ..................................................................................................................

20% .................................. .......... ...

10% ----------...............-----------
% Highest third
0%
SLowest third
-10%

-20% ------..........

-30% ...................-.

-40%
AlI Nurseries Largest Smal lest


1-






Central Florida Foliage


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 $25,146 for all nurseries,
$56,144 for the largest nurseries, and $3,603 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
84 percent, 109 percent, and 22 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 $69,353 for all nurseries, $198,621 for the
largest, and $4,182 for the smallest firms. As a
percentage of annual sales, these amounts
represented 13 percent, 17 percent, and 6 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
$223,774 for all nurseries, $525,441 for the largest
firms, and $48,742 for the smallest nurseries.

Current assets averaged $318,272 for all
nurseries, $525,441 for the largest, and $48,742 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
$440,360 for all nurseries, $859,441 for the largest,
and $163,994 for the smallest nurseries. Subtracting
accumulated depreciation left a current value of
$212,948 for all nurseries, $370,778 for the largest,
and $93,170 for the smallest nurseries. As a


percentage of the original investment, these current
values represented 48 percent for the average of all
nurseries, 64 percent for the largest nurseries, and
57 percent for the smallest.

Total assets. The sum of current and long term
assets gives average total assets of $531,220 for all
nurseries, $1,150,983 for the largest, and $149,697 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 $29,837 for all
nurseries, $75,022 for the largest, and $16,690 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 3.2 for all nurseries, 6.3 for the largest
firms, and 0.5 for the smallest nurseries. This is a
rather unsafe financial position for the smallest
nurseries.

Long term liabilities include notes payable and
mortgages. They averaged $132,618 for all nurseries,
$232,713 for the largest, and $57,941 for the smallest
nurseries. The ratio of current liabilities to long
term liabilities was 0.22 for all nurseries, 0.15 for
largest, and 0.29 for the smallest firms.

Total liabilities. The sum of current and long-
term liabilities gives average total liabilities of
$162,455 for all nurseries, $307,735 for the largest,
and 74,631 for the smallest firms. The ratio of total
assets to total liabilities were, 3.3, 3.9, and 2.0,
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 $368,766, for the largest it
was $843,248, and for the smallest $75,067.







Central Florida Foliage


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
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 (top box) will be discussed to illustrate the
operation of the model.

Margin Management
From total gain ($581,406) is subtracted total
deductions ($536,753) and the operator's salary
($34,768) to give return to capital ($9,885). This is
divided by total gain to yield an average net profit
margin of 1.7 percent.

Asset Management
Current assets ($318,272) plus long term assets
($212,948) make total assets of $531,220. This is
divided into total gain ($581,406) to give an asset
turnover rate of 1.09. Asset turnover multiplied by
net profit margin (1.7 percent) results in an average
return to capital of 1.86 percent.

Leverage Management
Current liabilities ($29,837) plus long term
liabilities ($132,618) gives average total liabilities of
$162,455. This is subtracted from total assets to
yield an average net worth of $368,766. Total
liabilities plus net worth ($531,220) divided by net
worth gives a leverage factor of 1.44. This is really
the ratio of total assets under one's control to net
worth. Leverage times rate of return to capital (1.86
percent) gives a return on net worth of 2.7 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 the profitability of
the nursery operation.

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








Central Florida Foliage


Figure 20 -- Total Profitability Model, 25 foliage nurseries in Central Florida, 1988.


---Margin Management-------------------------------- -----
total gain


---Asset Management-----------------------------------------
cash total gain

$25,146 current $581,406
$56,144 *** assets $1,470,422 **
$3,603 $74,428
I $318,272
+ **** $780,205 *** *
accts. rec. $56,528 *
/ *
$69,353 *
$198,621 ** *
$4,182 total asset

+ $531.220 *


plant inven. + *
**
$195,595 *
$437,468 ** Long-term
$46,980 assets
*
+ $212,948
supply inven $370,778 ***
$93,170
$28,179 *
$87,973 ***
$1,762


** $1,150,983 ***
$149,697


as
tur


= -Leverage Management-------------------------------------------------------------- x
Liability plus
= current tIab. total Liab. net worth


* RETURN ON
* NET WORTH

* 2.68%
*** 3.36%
* -26.71%






*


2== = = ========n= =DIlI1 =============3 ====2222= 2 =


Key

ALl Nurseries
Largest
Smallest
nargin

1.70%
1.93% **
-26.94% *
__ *
*
Rate of
return

x 1.86%
**** 2.46% ***
-13.39% *
*
*
*
sset *
over *
*
1.094 *
1.278 *** *
0.497 *
*
*
*
*
*
*
*
*
*
*







Central Florida Foliage


APPENDIX

Appendix Table of Contents Page

Definitions .......................................................... 26
Making your own calculations ............................................. 28
Appendix Tables ...................................................... 29



List of Appendix Data Tables

Appendix Table Page

1 Size of business, 25 foliage nurseries in Central Florida, 1988 ................ .... 29
2 Rates of production, 25 foliage nurseries in Central Florida, 1988 ................... 29
3 Land use indicators, 25 foliage nurseries in Central Florida, 1988 ................... 30
4 Labor use indicators, 25 foliage nurseries in Central Florida, 1988 ............... 30
5 Capital use indicators, 25 foliage nurseries in Central Florida, 1988 ................. 30
6 Costs by expense category, 25 foliage nurseries in Central Florida, 1988 .............. 31
7 Percentage of total costs by expense category, 25 foliage nurseries in Central
Florida, 1988 ................ ................................... 32
8 Costs per square foot of bed and bench space, 25 foliage nurseries in Central
Florida, 1988 ....................................................... 33
9 Costs per square foot of propagating and finishing space, 25 foliage nurseries
in Central Florida, 1988 .............................................. 34
10Costs per dollar's worth of production, 25 foliage nurseries in Central Florida, 1988 ...... 35
11Cost per dollar's worth of sales (no adjustment for change in plant
inventory), 25 foliage nurseries in Central Florida, 1988 ................. ..... 36
12Income summary, 25 foliage nurseries in Central Florida, 1988 ..................... 37
13Statement of Financial Position, 25 foliage nurseries in Central Florida, 1988 ........... 37
14Financial Ratios and other Profitability Indicators, 25 foliage nurseries in
Central Florida, 1988 ................ ............................. 38







Central 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, 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 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 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: 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
formulas 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/1E. The slash mark (/) stands for division. The
Table 1A stands for the A line of Appendix Table
1, and 1E stands for the E 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 Appendix
Table 6 by your total value of production figure on
line C of Appendix Table 1.

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







Central Florida Foliage


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


. 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 .............. Sum lines F,G, and H
Line J: Accumulated depreciation ..... From your records, not shown previously
(Skip line J if lines F, G, and H are depreciated values. Otherwise, enter accumulated depreciation.
Line K: Total long term assets ....... sum lines F,G,H,I, and J
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 003, priced at $20, from:

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








Central Florida Foliage


APPENDIX TABLES


Table 1--Size of Business: 25 foliage nurseries in Central Florida, 1988


ALL 25 Largest Smallest Your
unit Nurseries Third (7) Third (8) Nursery
...............................................................................................................


A Value of own plants sold . . . ... $. 534,446
B Change in inventory value. . . . .. S 32,985

C Total value of production. . . . ... 567,430

D Space for propagating & finishing. . . .sq.ft. 96,127
E Space for stock plants . . . . . .sq.ft. 10,541

F Total bed and bench space. . . . . .sq.ft. 106,668

G Total nursery area . . . . .... .sq.ft. 178,104
H acres 4.09


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


------------Capital Owned-------------
Growing plants . . . . . .
BLdgs, improvements . . . . .
Machinery & equipment . . . .
Land . . . . . . . . .
Supply inventory . . . . . .
Accounts receivable . . . . .
Cash/checkbook balance . . . .


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


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


U Total Leased Capital . . . . . .


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


. . $
.... S
.... $
. . $


. .. S
. .. $


17.09


195,595
137,539
39,859
35,551
28,179
69,353
25,146

531,220


1,718
0
21,336

23,054


195,595
139,256
39,859
56,887
28,179
69,353
25,146

554,274


1,312,547
117,599

1,430,146

218,364
27,290

245,653

342,085
7.85

45.44


437,468
242,537
91,070
37,171
87,973
198,621
56,144

1,150,983


5,000
0
57,143

62,143


437,468
247,537
91,070
94,314
87,973
198,621
56,144

1,213,126


74,752
(1,981)

72,772

26,361
2,243

28,604

40,952
0.94

3.18


46,980
57,209
17,191
18,770
1,762
4,182
3,603

149,697


272
0
4,750

5,022


46,980
57,481
17,191
23,520
1,762
4,182
3,603

154,720


~=----I----------I=======-I~DII-=====DII








Central Florida Foliage 27




Table 2--Rates of Prodution Indicators: 25 foliage nurseries in Central Florida, 1988


ALL 25 Largest Smallest Your
unit Nurseries Third (7) Third (8) Nursery
...............................................................................................................


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

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

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


S 5.01
S 5.32

$ 5.56
$ 5.90


130,713
138,780


Table 3--Labor Use Indicators: 25 foliage nurseries in Central FLorida, 1988


ALL 25 Largest Smallest Your
unit Nurseries Third (7) Third (8) Nursery
...............................................................................................................


Plant sales per person* . .. (Table 1A/11) S
Value of production per person* (Table 1C/11) S

Growing area per person*. . (Table 1F/11) sq.ft.
Persons per acre growing area (Table 1F/1H) number


31,278
33,208

6,243
4.18


28,888
31,477

5,407
5.79


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



Table 4--Space Use Indicators: 25 foliage nurseries in Central FLorida, 1988


ALL 25
unit Nurseries


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

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


273.2

12,761
12.0


Total nursery area. . . . . . .. .sq.ft. 178,104
(incl. roads, parking, office, etc.)


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

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

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


106,668
59.9

96,127
90.1

10,541
9.9


Largest
Third (7)


300.0

31,328
12.8

342,085


245,653
71.8

218,364
88.9

27,290
11.1


Smallest Your
Third (8) Nursery


159.1

2,556
8.9

40,952


28,604
69.8

26,361
92.2

2,243
7.8


5.34
5.82

6.01
6.55

167,136
182,110


2.61
2.54

2.84
2.76

79,513
77,407


23,473
22,851

8,982
3.39








Central Florida Foliage


Table 5--Capital Use Indicators: 25 foliage nurseries in Central Florida, 1988

ALL 25 Largest Smallest Your
unit Nurseries Third (7) Third (8) Nursery
...............................................................................................................


Owned capital turnover. . (Table 1A/10)
Managed capital turnover. .(Table 1A/1AC)

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

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

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

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


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

TOTAL. . . . . . . . ... ..


X 100.6
X 96.4

$ 31,089
$ 32,438


129,924
135,562


11,447
8,150
2,333
3,329


47,838
34,059
9,749
13,913


35.3
25.1
7.2
10.3
5.1
12.5
4.5

100.0


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


114.0
108.2

25,332
26,700

146,563
154,476


9,628
5,448
2,004
2,076


55,706
31,521
11,597
12,010


36.1
20.4
7.5
7.8
7.3
16.4
4.6

100.0


49.9
48.3

47,006
48,583

159,232
164,574


14,752
18,049
5,398
7,385


49,973
61,142
18,286
25,018


30.4
37.2
11.1
15.2
1.1
2.7
2.3

100.0








Central Florida Foliage 29










Table 6--Dotlar Cost by Expense Category: 25 foliage nurseries in Central Florida, 1988


AlL 25 Largest Smallest Your
unit Nurseries Third (7) Third (8) Nursery

Operator's salary .......... ..$ 34,768 42,026 21,326
Other wages ................ $ 219,309 626,473 21,893

LABOR TOTAL ................ $ 254,077 668,499 43,219


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 . . . .

Travb. . . . . . . . . .
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 . . . . . . .


70,331
33,986
14,417
20,361
7,162
9,398
35,295
9,589

200,539


$ 19,419
$ 7,546

S 26,966

$ 3,949
$ 10,183
S 5,665
S 7,333
S 4,169
S 2,969
$ 3,658
S 20,257

$ 58,182

S 539,763

S 10,636
S 21,122
S 0
$ 63,746

S 95,504

S 635,268


157,789
88,062
29,750
55,472
17,166
23,806
104,219
23,935

500,198

48,027
13,194

61,221

11,077
22,674
15,307
16,560
8,315
4,983
12,346
55,138

146,401

1,376,320

28,164
37,613
0
138,118

203,895

1,580,214


10,517
4,599
3,198
1,989
1,082
1,017
3,627
1,785

27,815

2,283
2,614

4,897

586
2,015
980
2,136
892
275
466
3,267

10,616

86,546

3,023
4,908
0
17,964

25,894

112,440








30 Central Florida Foliage










Table 7--Percent of Total Costs by Expense Category: 25 foliage nurseries in Central Florida, 1988


ALL 25 Largest Smallest Your
unit Nurseries Third (7) Third (8) Nursery
...............................................................................................................


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-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 . . . . . . .


X 5.5
X 34.5

X 40.0

X 11.1
X 5.3
X 2.3
X 3.2
% 1.1
X 1.5
X 5.6
% 1.5

X 31.6


3.1
1.2

4.2

0.6
1.6
0.9
1.2
0.7
0.5
0.6
3.2

9.2

85.0


% 1.7
X 3.3
% 0.0
% 10.0

X 15.0

% 100.0


==---- P II = = = I = II =D O I-I === -


2.7
39.6

42.3

10.0
5.6
1.9
3.5
1.1
1.5
6.6
1.5

31.7

3.0
0.8

3.9

0.7
1.4
1.0
1.0
0.5
0.3
0.8
3.5

9.3

87.1

1.8
2.4
0.0
8.7

12.9

100.0


19.0
19.5

38.4

9.4
4.1
2.8
1.8
1.0
0.9
3.2
1.6

24.7

2.0
2.3

4.4

0.5
1.8
0.9
1.9
0.8
0.2
0.4
2.9

9.4

77.0

2.7
4.4
0.0
16.0

23.0

100.0








Central Florida Foliage 31










Table 8--Costs Per Square Foot of Bed & Bench Space: 25 foliage nurseries in Central Florida, 1988


ALL 25 Largest Smallest
unit Nurseries Third (7) Third (8)
................................................................cents...32.617.1.......74......6..


Your
Nursery


Operator's salary . . . .
Other ages . . . . .


LABOR TOTAL . . . . . .

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


cents 32.6
cents 205.6

cents 238.2


cents
cents
cents
cents
cents
cents
cents
cents


SUPPLIES TOTAL. . . . . . . ... 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 . . . . . .

ADMINISTRATIVE & OVERHEAD COSTS TOTAL .

TOTAL CASH COSTS . . . . . .

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


65.9
31.9
13.5
19.1
6.7
8.8
33.1
9.0

188.0

18.2
7.1

25.3


.cents 3.7
. cents 9.5
. cents 5.3
. cents 6.9
. cents 3.9
. cents 2.8
. cents 3.4
. cents 19.0

. cents 54.5

. cents 506.0


. cents
. cents
. cents
. cents


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

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


10.0
19.8
0.0
59.8

89.5

595.6


17.1
255.0

272.1

64.2
35.8
12.1
22.6
7.0
9.7
42.4
9.7

203.6

19.6
5.4

24.9

4.5
9.2
6.2
6.7
3.4
2.0
5.0
22.4

59.6

560.3

11.5
15.3
0.0
56.2

83.0

643.3


74.6
76.5

151.1

36.8
16.1
11.2
7.0
3.8
3.6
12.7
6.2

97.2

8.0
9.1

17.1

2.1
7.0
3.4
7.5
3.1
1.0
1.6
11.4

37.1

302.6

10.6
17.2
0.0
62.8

90.5

393.1


=====~--===============Plt~==l==========


: : : : : :








32 Central Florida Foliage










Table 9--Costs Per Square Foot of Propagating & Finishing Space: 25 foliage nurseries in Central Florida, 1988


ALL 25 Largest Smallest Your
unit Nurseries Third (7) Third (8) Nursery
...............................................................................................................
Operator's salary ............. cents 36.2 19.2 80.9
Other wages ................ cents 228.1 286.9 83.1

LABOR TOTAL ................ cents 264.3 306.1 164.0

Plants & seeds. .............. cents 73.2 72.3 39.9
Containers. ................ cents 35.4 40.3 17.4
Heating fuel. ............... cents 15.0 13.6 12.1
Peat & soil ................ cents 21.2 25.4 7.5
Fertilizers & time. ............ cents 7.5 7.9 4.1
Pesticides & chemicals. .......... cents 9.8 10.9 3.9
Packaging & shipping supplies ....... cents 36.7 47.7 13.8
Other production supplies ......... cents 10.0 11.0 6.8

SUPPLIES TOTAL. .............. cents 208.6 229.1 105.5

Facility repairs. ............. cents 20.2 22.0 8.7
Equipment operation ............ cents 7.9 6.0 9.9

OTHER PRODUCTION COSTS TOTAL. ....... cents 28.1 28.0 18.6

Travel. ...................cents 4.1 5.1 2.2
Insurance ................. cents 10.6 10.4 7.6
Telephone ................. cents 5.9 7.0 3.7
Electricity ................ cents 7.6 7.6 8.1
Taxes & Licenses. ............. cents 4.3 3.8 3.4
Advertising ................ cents 3.1 2.3 1.0
Rent-land/buildings ............ cents 3.8 5.7 1.8
Other cash costs. .............. cents 21.1 25.3 12.4

ADMINISTRATIVE & OVERHEAD COSTS TOTAL . cents 60.5 67.0 40.3

TOTAL CASH COSTS. ............. cents 561.5 630.3 328.3

Depreciation-machinery/equipment. ..... cents 11.1 12.9 11.5
Depreciation-buildings/etc. ........ cents 22.0 17.2 18.6
Supply inventory decrease ......... cents 0.0 0.0 0.0
Interest on capital ............ cents 66.3 63.3 68.1

TOTAL NON-CASH COSTS. ........... cents 99.4 93.4 98.2

TOTAL ALL COSTS .............. cents 660.9 723.7 426.5

==== =~= ---- P=- PII- I-- PIPIP== ==2








Central Florida Foliage 33










Table 10--Cost Per Dollar's Worth of Production: 25 foliage nurseries in Central Florida, 1988


ALL 25 Largest Smallest Your
unit Nurseries Third (7) Third (8) Nursery
...............................................................................................................
Operator's salary ............. cents 6.1 2.9 29.3
Other wages ................ cents 38.6 43.8 30.1

LABOR TOTAL ................ cents 44.8 46.7 59.4

Plants & seeds. .............. cents 12.4 11.0 14.5
Containers. ................ cents 6.0 6.2 6.3
Heating fuel. ................ cents 2.5 2.1 4.4
Peat & soil ................ cents 3.6 3.9 2.7
Fertilizers & lime. ............ cents 1.3 1.2 1.5
Pesticides & chemicals. . . . . ... cents 1.7 1.7 1.4
Packaging & shipping supplies ....... cents 6.2 7.3 5.0
Other production supplies ......... cents 1.7 1.7 2.5

SUPPLIES TOTAL. .............. cents 35.3 35.0 38.2

Facility repairs. ............. cents 3.4 3.4 3.1
Equipment operation ............ cents 1.3 0.9 3.6

OTHER PRODUCTION COSTS TOTAL. .......... cents 4.8 4.3 6.7

Travel. .................. cents 0.7 0.8 0.8
Insurance ................. cents 1.8 1.6 2.8
Telephone ................. cents 1.0 1.1 1.3
Electricity ................ cents 1.3 1.2 2.9
Taxes & licenses. ............. cents 0.7 0.6 1.2
Advertising ................ cents 0.5 0.3 0.4
Rent-land/buildings ............ cents 0.6 0.9 0.6
Other cash costs. ............. cents 3.6 3.9 4.5

ADMINISTRATIVE & OVERHEAD COSTS TOTAL . cents 10.3 10.2 14.6

TOTAL CASH COSTS. ............. cents 95.1 96.2 118.9

Depreciation-machinery/equipment ...... cents 1.9 2.0 4.2
Depreciation-buildings/etc. ........ cents 3.7 2.6 6.7
Supply inventory decrease ......... cents 0.0 0.0 0.0
Interest on capital ............ cents 11.2 9.7 24.7

TOTAL NON-CASH COSTS. ........... cents 16.8 14.3 35.6

TOTAL ALL COSTS .............. cents 112.0 110.5 154.5

1== I= --- -- -"'=== == = =1 = 1 1








34 Central Florida Foliage










Table 11--Cost Per Dollar's Worth of Sales: 25 foliage nurseries in Central Florida, 1988


ALL 25 Largest Smallest Your
unit Nurseries Third (7) Third (8) Nursery
..............................................................................................6.5...3..2..28.5.


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


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


SUPPLIES TOTAL. . . . . . . ... 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


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


6.5
41.0

47.5

13.2
6.4
2.7
3.8
1.3
1.8
6.6
1.8

37.5

3.6
1.4

5.0

0.7
1.9
1.1
1.4
0.8
0.6
0.7
3.8

10.9

101.0

2.0
4.0
0.0
11.9

17.9

118.9


3.2
47.7

50.9

12.0
6.7
2.3
4.2
1.3
1.8
7.9
1.8

38.1

3.7
1.0

4.7

0.8
1.7
1.2
1.3
0.6
0.4
0.9
4.2

11.2

104.9

2.1
2.9
0.0
10.5

15.5

120.4


28.5
29.3

57.8

14.1
6.2
4.3
2.7
1.4
1.4
4.9
2.4

37.2

3.1
3.5

6.6

0.8
2.7
1.3
2.9
1.2
0.4
0.6
4.4

14.2

115.8

4.0
6.6
0.0
24.0

34.6

150.4


=;I-~~I====----=================~=~I~I=~








Central Florida Foliage 35






Table 12--Income Summary: 25 foliage nurseries in Central Florida, 1988


ALL 25 Largest Smallest
unit Nurseries Third (7) Third (8)
..................................................................................................


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

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

F Deduct cash costs except operator's salary $
G Deduct non-cash costs except interest on cap $

H Total Deductions . . . . . .... .

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

K RETURN TO CAPITAL. . . . . . ... $
L --Percent. . . . . . . ... ..


534,446
32,985
4,829
9,147

581,406

(504,995)
(31,758)

(536,753)

44,653
34,768

9,885
1.86


1,312,547
117,599
12,576
27,700

1,470,422

(1,334,294)
(65,777)

(1,400,071)

70,352
42,026

28,326
2.46


Your
Nursery


74,752
(1,981)
733
923

74,428

(65,220)
(7,930)

(73,151)

1,277
21,326

(20,049)
-13.39


Table 13--Statement of Financial Position: 25 foliage nurseries in Central Florida, 1988


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

E Total CURRENT Assets . . . . . .

---Long Term Assets---
F Machinery & Equipment . . . . . .
G Buildings & Fixtures . . . . . .
H Land . . . . . . . . . .

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

J Less Accumulated Depreciation . . . .

K Total LONG TERM Assets . . . . . .

L TOTAL ASSETS . . . . . . . .

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

0 Total LIABILITIES . . . . . . .

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

Q TOTAL LIABILITIES & NET WORTH . . . .


ALL 25
unit Nurseries


$ 25,146
$ 69,353
$ 195,595
$ 28,179

$ 318,272


$ 108,268
$ 296,542
$ 35,551

$ 440,360

$ (227,412)

$ 212,948

S 531,220


S 29,837
S 132,618

$ 162,455

$ 368,766

S 531,220


Largest Smallest Your
Third (7) Third (8) Nursery
----------------------------------------


56,144
198,621
437,468
87,973

780,205


256,144
566,126
37,171

859,441

(488,664)

370,778

1,150,983


75,022
232,713

307,735

843,248

1,150,983


3,603
4,182
46,980
1,762

56,528


40,800
104,424
18,770

163,994

(70,824)

93,170

149,697


16,690
57,941

74,631

75,067

149,697








36 Central Florida Foliage











Table 14--Financial Ratios and Other Profitability Indicators: 25 foliage nurseries in Central Florida, 1988


ALL 25 Largest Smallest Your
Nurseries Third (7) Third (8) Nursery
...............................................................................................................
Cash on Hand/Current Liabilities ......... 0.84 0.75 0.22

Accounts Recievable/Sales. ............ 0.13 0.15 0.06

Quick Ratio (Cash & Acct.Rec./Curr.Liab) ..... 3.17 3.40 0.47

Inventory Turnover ................ 2.73 3.00 1.59

Current Value/Orig. Cost of Long Term Assets . 0.48 0.43 0.57

Total Assets/Total Liabilities .......... 3.27 3.74 2.01

Current Liabilities/Long Term Liabilities...... 0.22 0.32 0.29

Net Profit Margin. ................ 1.7% 1.9% -26.9%

Asset Turnover Ratio ............... 0.91 0.78 2.01

Return to Capital. ................ 1.86% 2.46X -13.39%

Leverage Factor. ................. 1.44 1.36 1.99

Return on Net Worth. ............... 2.7X 3.4% -26.7%








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UNIVERSITY OF FLORIDA
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