<%BANNER%>
HIDE
 Historic note
 Front Cover
 Title Page
 Abstract
 Acknowledgements
 Table of Contents
 Introduction
 Procedures
 Results
 Reference
 Appendix


















BUSINESS ANALYSIS OF ORNAMENTAL PLANT NURSERIES
IN FLORIDA, 1995

Alan W. Hodges, Loretta N. Satterthwaite and John J. Haydu
University of Florida, Institute of Food & Agricultural Sciences
Food & Resource Economics Department, Gainesville, FL
and Central Florida Research and Education Center, Apopka, FL
July 1997


ABSTRACT

Information is presented on sales, production, costs, assets and liabilities, and efficiency indicators for
50 wholesale ornamental plant nurseries in Florida for the year of 1995. Nursery products
represented among the sampled firms included container and field-grown woody ornamentals,
tropical foliage and flowering plants. The average firm had annual sales of nursery plants of $1.54
million (MM), total income of $1.91MM, production area of 34 acres, employment of 33 fulltime
equivalent (FTE) persons, total costs of $1.74MM, and net firm income of $163 thousand (M). Total
assets, including plant inventory, land, equipment, buildings, supplies, cash on hand, and accounts
receivable, averaged $2.60MM, while total liabilities were $1.02MM. Value produced per square foot
of growing area averaged $1.18 and total costs per square foot were $1.17. Value produced per full-
time equivalent (FTE) of labor was $53M and growing space managed per FTE averaged 1.04 acres.
Capital managed per FTE and per acre of growing space averaged $85M and $82M, respectively.
Inventory turnover was 0.94. Costs as a share of value produced were 4.5% for management, 33.8%
for labor, 32.0% for materials, 4.9% for equipment/facilities, 16.0% for overhead, 3.8% for
depreciation, and 4.4% for interest. Net profit margin averaged 12.6%, rate of return on capital
investment was 9.3%, and rate of return on net worth was 10.3%. Compared to previous results for
1990, firms in the Nursery Business Analysis program in 1995 were significantly larger, with
production area and employment increased by 71% and 72%, respectively, while sales and net firm
income increased by 45% and 52%, respectively, in constant-dollar terms. However, rate of return on
net worth decreased by 22 percent. Similar information is presented for each sector of the industry
and for large, small and highly profitable firms.

KEY WORDS: ornamental plants, wholesale nurseries, business analysis, sales, costs, returns,
efficiency, woody ornamentals, foliage, flowering plants, Florida.


ACKNOWLEDGMENTS

This report was made possible by the owners and managers of cooperating ornamental nursery firms
who made available their records on a confidential basis for analysis and averaging. Assistance was
provided by University of Florida Extension Ornamental Horticulture Agents Mike Demaree, Diane
Dilger, Liz Felter, DeArmand Hull, Cathy Neal, Roger Newton and Andy Rose.







TABLE OF CONTENTS--Continued
Page
Value Produced Per W orker ............................. .......... 11
Growing Area Managed Per Worker ................................... 12
Capital Managed Per Worker ....................................... 12
Capital Managed Per Acre ........................................ 12
Cost Efficiency ...................................................... 12
Cost Per Square Foot ................. ........................... 12
Costs as a Share of Value Produced ................................... 13
Management ................ ............................. 13
Employee Labor ............................................ 12
Materials .................................................. 13
Facilities and Equipm ent ................. .................... 13
Administrative Overhead ......................... ........... 13
Interest ................................................. 14
Depreciation ............................................. 14
Profitability ................ ................... ...................... 14
Net Margin ................ .................................... 14
Rate of Return on Capital ..................................... ...... 14
Rate of Return on Net Worth ......................................... 15
Financial Risk ................. ...................................... 15
Quick ratio ............. ........................................ 15
Leverage .................................... .................. 15
Summary of Key Factors Affecting Profitability ................................. 16

REFERENCES ................. ........ ......................... ........... 16

APPENDICES ............... ............................................ 16
A: Appendix Tables ................................................... 17
B: University of Florida Nursery Business Analysis Worksheet ...................... 23







PROCEDURES


Information Collected and Reported

Information for this report was collected from 50 wholesale ornamental nursery firms in Florida for the
1995 fiscal year. Information gathered included monthly sales, other income, expenses itemized in 25
categories, assets and liabilities, inventory values, value of leased property, production area, and
labor hours or number of fulltime persons employed. Information was gathered from company
financial statements or income tax forms, and other production records. In most cases, these data
were for the calendar year period of January to December, 1995, but in a few instances up to six
months data were for 1994 or 1996. Data were taken from company financial statements or tax
returns and other production records, and transcribed to standardized worksheets (see Appendix B)
and entered into computer spreadsheets for analysis. Reported results represent weighted averages
for firms in each group, so larger firms had greater influence on the results by virtue of their greater
values for sales, expenses, etc. Trends in operating results between the 1995 and 1990 were
calculated as a percentage change by taking difference between 1995 and 1990 values, then dividing
by the 1990 value. Changes in monetary values were adjusted for inflation using the Consumer Price
Index (US Dept. Labor), which showed a 16.6% increase between 1990 and 1995.

Industry Groups Analyzed

Records were separately compiled and analyzed for four different groups of crops and production
system types in the wholesale ornamental plant nursery industry: containerized woody ornamentals,
flowering plants, and tropical foliage plants in Central and South Florida. Production systems for
woody ornamentals are characterized by open growing areas, while producers of tropical foliage and
flowering plant products typically have weatherized greenhouses or shadehouses. Within each
industry group, data were also analyzed by subgroups of large firms, small firms, and highly profitable
firms where possible. Large firms were defined as having annual sales of $1 million or greater, while
small firms had sales of less than $250 thousand. Highly profitable firms were defined as having
returns to capital of at least 15 percent. The number of firms sampled in each industry group, and
large, small and highly profitable firms are shown in Table 1. Of these 50 firms providing information
for 1995, 25 had also previously participated in the program for 1990.

Table 1. Number of Florida ornamental plant nursery firms sampled for the Nursery Business
Analysis program, 1995.




Business analysis of ornamental plant nurseries in Florida
ALL VOLUMES CITATION SEARCH THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00026342/00003
 Material Information
Title: Business analysis of ornamental plant nurseries in Florida
Series Title: Economic information report
Physical Description: v. : ill. ; 28 cm.
Language: English
Creator: University of Florida -- Food and Resource Economics Dept
Publisher: The Dept.
Place of Publication: Gainesville Fla
Creation Date: 1995
Publication Date: 1992-
 Subjects
Subjects / Keywords: Ornamental plant industry -- Economic aspects -- Florida   ( lcsh )
Nurseries (Horticulture) -- Economic aspects -- Florida   ( lcsh )
Floriculture -- Economic aspects -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
serial   ( sobekcm )
 Notes
Statement of Responsibility: Food & Resource Economics Department, Agricultural Experiment Stations and Cooperative Extension Service, Institute of Food & Agricultural Sciences, University of Florida.
Dates or Sequential Designation: 1990-
Numbering Peculiarities: Report for 1990- covers fiscal year 1990/1991- .
General Note: Title from cover.
 Record Information
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: aleph - 001803062
notis - AJM6863
System ID: UF00026342:00003

Table of Contents
    Historic note
        Historic note
    Front Cover
        Front Cover
    Title Page
        Title Page
    Abstract
        Page i
    Acknowledgements
        Page i
    Table of Contents
        Page ii
        Page iii
        Page iv
    Introduction
        Page 1
    Procedures
        Page 2
        Page 3
    Results
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
    Reference
        Page 16
    Appendix
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
Full Text





HISTORIC NOTE


The publications in this collection do
not reflect current scientific knowledge
or recommendations. These texts
represent the historic publishing
record of the Institute for Food and
Agricultural Sciences and should be
used only to trace the historic work of
the Institute and its staff. Current IFAS
research may be found on the
Electronic Data Information Source
(EDIS)

site maintained by the Florida
Cooperative Extension Service.






Copyright 2005, Board of Trustees, University
of Florida




'V/Alan W. Hodges
Loretta Satterthwaite
John J. Haydu


Economic Information
Report 97-3


Business Analysis of Ornamental Plant
Nurseries In Florida, 1995


* UNIVERSITY OF
FLORIDA
Institute of Food and Agricultural Sciences
Food and Resource Economics Department
Florida Agricultural Experiment Stations
Cooperative Extension Service
Gainesville, FL 32611


July 1997













Business Analysis of Ornamental
Plant Nurseries In Florida, 1995

Alan W. Hodges, Loretta Satterthwaite and John J. Haydu

Economic Information Report El 97-3












Food & Resource Economics Department
Agricultural Experiment Stations and
Cooperative Extension Service

Institute of Food & Agricultural Sciences
University of Florida, Gainesville 32611


July 1997







BUSINESS ANALYSIS OF ORNAMENTAL PLANT NURSERIES
IN FLORIDA, 1995

Alan W. Hodges, Loretta N. Satterthwaite and John J. Haydu
University of Florida, Institute of Food & Agricultural Sciences
Food & Resource Economics Department, Gainesville, FL
and Central Florida Research and Education Center, Apopka, FL
July 1997


ABSTRACT

Information is presented on sales, production, costs, assets and liabilities, and efficiency indicators for
50 wholesale ornamental plant nurseries in Florida for the year of 1995. Nursery products
represented among the sampled firms included container and field-grown woody ornamentals,
tropical foliage and flowering plants. The average firm had annual sales of nursery plants of $1.54
million (MM), total income of $1.91MM, production area of 34 acres, employment of 33 fulltime
equivalent (FTE) persons, total costs of $1.74MM, and net firm income of $163 thousand (M). Total
assets, including plant inventory, land, equipment, buildings, supplies, cash on hand, and accounts
receivable, averaged $2.60MM, while total liabilities were $1.02MM. Value produced per square foot
of growing area averaged $1.18 and total costs per square foot were $1.17. Value produced per full-
time equivalent (FTE) of labor was $53M and growing space managed per FTE averaged 1.04 acres.
Capital managed per FTE and per acre of growing space averaged $85M and $82M, respectively.
Inventory turnover was 0.94. Costs as a share of value produced were 4.5% for management, 33.8%
for labor, 32.0% for materials, 4.9% for equipment/facilities, 16.0% for overhead, 3.8% for
depreciation, and 4.4% for interest. Net profit margin averaged 12.6%, rate of return on capital
investment was 9.3%, and rate of return on net worth was 10.3%. Compared to previous results for
1990, firms in the Nursery Business Analysis program in 1995 were significantly larger, with
production area and employment increased by 71% and 72%, respectively, while sales and net firm
income increased by 45% and 52%, respectively, in constant-dollar terms. However, rate of return on
net worth decreased by 22 percent. Similar information is presented for each sector of the industry
and for large, small and highly profitable firms.

KEY WORDS: ornamental plants, wholesale nurseries, business analysis, sales, costs, returns,
efficiency, woody ornamentals, foliage, flowering plants, Florida.


ACKNOWLEDGMENTS

This report was made possible by the owners and managers of cooperating ornamental nursery firms
who made available their records on a confidential basis for analysis and averaging. Assistance was
provided by University of Florida Extension Ornamental Horticulture Agents Mike Demaree, Diane
Dilger, Liz Felter, DeArmand Hull, Cathy Neal, Roger Newton and Andy Rose.







BUSINESS ANALYSIS OF ORNAMENTAL PLANT NURSERIES
IN FLORIDA, 1995

Alan W. Hodges, Loretta N. Satterthwaite and John J. Haydu
University of Florida, Institute of Food & Agricultural Sciences
Food & Resource Economics Department, Gainesville, FL
and Central Florida Research and Education Center, Apopka, FL
July 1997


ABSTRACT

Information is presented on sales, production, costs, assets and liabilities, and efficiency indicators for
50 wholesale ornamental plant nurseries in Florida for the year of 1995. Nursery products
represented among the sampled firms included container and field-grown woody ornamentals,
tropical foliage and flowering plants. The average firm had annual sales of nursery plants of $1.54
million (MM), total income of $1.91MM, production area of 34 acres, employment of 33 fulltime
equivalent (FTE) persons, total costs of $1.74MM, and net firm income of $163 thousand (M). Total
assets, including plant inventory, land, equipment, buildings, supplies, cash on hand, and accounts
receivable, averaged $2.60MM, while total liabilities were $1.02MM. Value produced per square foot
of growing area averaged $1.18 and total costs per square foot were $1.17. Value produced per full-
time equivalent (FTE) of labor was $53M and growing space managed per FTE averaged 1.04 acres.
Capital managed per FTE and per acre of growing space averaged $85M and $82M, respectively.
Inventory turnover was 0.94. Costs as a share of value produced were 4.5% for management, 33.8%
for labor, 32.0% for materials, 4.9% for equipment/facilities, 16.0% for overhead, 3.8% for
depreciation, and 4.4% for interest. Net profit margin averaged 12.6%, rate of return on capital
investment was 9.3%, and rate of return on net worth was 10.3%. Compared to previous results for
1990, firms in the Nursery Business Analysis program in 1995 were significantly larger, with
production area and employment increased by 71% and 72%, respectively, while sales and net firm
income increased by 45% and 52%, respectively, in constant-dollar terms. However, rate of return on
net worth decreased by 22 percent. Similar information is presented for each sector of the industry
and for large, small and highly profitable firms.

KEY WORDS: ornamental plants, wholesale nurseries, business analysis, sales, costs, returns,
efficiency, woody ornamentals, foliage, flowering plants, Florida.


ACKNOWLEDGMENTS

This report was made possible by the owners and managers of cooperating ornamental nursery firms
who made available their records on a confidential basis for analysis and averaging. Assistance was
provided by University of Florida Extension Ornamental Horticulture Agents Mike Demaree, Diane
Dilger, Liz Felter, DeArmand Hull, Cathy Neal, Roger Newton and Andy Rose.






TABLE OF CONTENTS
Page
A B S T R A C T .................................................................. i

ACKNOW LEDGEM ENTS ..................................................... i

INTRODUCTION .............................................................. 1
The Florida Nursery Industry ................................................ 1
The University of Florida Nursery Business Analysis Program ...................... 1

PROCEDURES .............................................................. 2
Information Collected and Reported .......................................... 2
Industry Groups Analyzed .................................................. 2
Accounting Conventions ................................................... 3

RESULTS ................................................................... 4
Income and Value Produced ................................................ 4
Annual Sales ...................................................... 4
M monthly Sales ...................................... ............... 4
Plant Inventory Change and Total Value Produced ......................... 5
Total Income ...................................... ................ 5
Assets, Liabilities and Net W orth ............................................. 5
Assets ................. ........................................ 6
C current Assets .............................................. 6
Long Term Assets ............................................ 5
L ia b ilitie s . . . . . . . . . . . . . .. 6
Current Liabilities ............................................. 6
Long Term Liabilities .......................................... 6
Net Worth ................................................. ..... 6
Productive Resources .................................................... 7
Land ...................................... ...................... 7
Labor ............... .......................................... 7
Capital Managed ...................................... ............. 7
Expenses ........................................................... 8
Management's Compensation ........................................ 8
Employee W ages and Benefits ....................................... 8
M materials .................................... ................... 9
Facilities and Equipment ............................................ 9
Administrative Overhead ............................................ 9
Interest ......................................................... 9
Depreciation ...................................................... 9
Total costs ....................................................... 9
Net Returns ............................................................. 9
Net Firm Income ...................................... ............. 9
Return on Capital ................................................ 10
Return on Net Worth ............................................... 10
Physical Productivity, Efficiency and Resource Use Intensity Indicators .............. 10
Value Produced Per Square Foot ..................................... 10
Plant Inventory Turnover ............................................ 11
Asset Turnover ................................................... 11






TABLE OF CONTENTS--Continued
Page
Value Produced Per Worker ......................................... 11
Growing Area Managed Per W orker ................................... 12
Capital Managed Per Worker ........................................ 12
Capital Managed Per Acre ........................................... 12
Cost Efficiency ...................................... ................... 12
Cost Per Square Foot .............................................. 12
Costs as a Share of Value Produced ................................... 13
Management ............................................... 13
Employee Labor ................. .......................... 12
Materials ................................................. 13
Facilities and Equipment ...................................... 13
Adm inistrative Overhead ...................................... 13
Interest .................................................. 14
Depreciation ............................................... 14
Profitability ...................................... ....................... 14
Net Margin ...................................... ................. 14
Rate of Return on Capital ........................................... 14
Rate of Return on Net Worth ........................................ 15
Financial Risk .......................................................... 15
Q uick ratio ....................................................... 15
Leverage ..................................... ................... 15
Summary of Key Factors Affecting Profitability ................................ 16

R EFERENCES .............................................................. 16

APPENDICES ...................................... .......................... 16
A: Appendix Tables ...................................................... 17
B: University of Florida Nursery Business Analysis Worksheet ...................... 23
























iii






LIST OF FIGURES
Figure Page
1 Monthly sales as a percentage of total annual sales for Florida ornamental plant
nurseries, 1995 ................................................... 5


LIST OF TABLES
Table Page
1 Number of Florida ornamental plant nursery firms sampled for the Nursery
Business Analysis Program, 1995 ...................................... 2
2 Income and value produced, Florida ornamental plant nurseries, 1995 ................ 4
3 Assets, liabilities and net worth for Florida ornamental plant nurseries, 1995 ........... 6
4 Productive resources of Florida ornamental plant nurseries, 1995 ................... 7
5 Expenses for Florida ornamental plant nurseries, 1995 ............................ 8
6 Net Returns for Florida ornamental plant nurseries, 1995 ......................... 10
7 Physical productivity, efficiency and resource use intensity indicators for Florida
ornam ental plant nurseries, 1995 ...................................... 11
8 Cost efficiency indicators for Florida ornamental plant nurseries, 1995 ............... 13
9 Profitability indicators for Florida ornamental plant nurseries, 1995 .................. 14
10 Financial ratios for Florida ornamental plant nurseries, 1995 ....................... 15


LIST OF APPENDIX TABLES
Appendix Table Page
1 Results for large, small and highly profitable Florida ornamental plant nurseries, 1995 ... 17
2 Results for large, small and highly profitable container woody ornamental nurseries
in Florida, 1995 ................................................. 18
3 Results for all and large Central Florida foliage nurseries, 1995 .................... 19
4 Results for all and large South Florida foliage nurseries, 1995 ...................... 20
5 Percentage changes in results for Florida ornamental plant nurseries, 1990 to 1995 ..... 21
6 Itemized listing of expenses for Florida ornamental plant nurseries, 1995 ............ 22







BUSINESS ANALYSIS OF ORNAMENTAL PLANT NURSERIES
IN FLORIDA, 1995
Alan W. Hodges', Loretta N. Satterthwaite2 and John J. Haydu


INTRODUCTION

The Florida Nursery Industry

The state of Florida is the second largest producer of ornamental plants in the U.S., with an industry
value of $1.0 billion in 1992 (Census Bureau, 1993) and over 5000 registered wholesale growers
(DPI, 1995). Ornamental crops produced in Florida include woody ornamentals (landscape trees and
shrubs), tropical foliage, and flowering plant products. Florida dominates U.S. production of tropical
foliage crops with over 90 percent of sales. Growth of the industry in Florida mirrored that in the
nation as a whole, with sales of ornamental plant products rapidly increasing in the 1970s and early
1980s, then experiencing slower but steady growth in the latter 1980s and 1990s. During this period
of maturation and increasing competition, the ornamental horticulture industry experienced problems
common to other parts of U.S. agriculture, including over-production, depressed prices, reduced
profitability and an increased rate of business failure (Hodges, Haydu and van Blokland, 1996). For
example, rates of return on equity for floricultural and environmental horticulture firms in the United
States declined from 6.9 percent in 1987 to 2.3 percent in 1991 (Johnson and Johnson, 1993).


The University of Florida Nursery Business Analysis Program

Information in this report was collected as part of the University of Florida's ongoing Nursery
Business Analysis Program. Since the 1960's, this program has gathered confidential production and
accounting records from wholesale nurseries in Florida. This report updates the previous official
report for 1990 (Hodges, 1992). Information generated by the Nursery Business Analysis is intended
for:
1. Nursery managers to use physical and economic measures for evaluating the efficiency of
individual nurseries and for making more informed management decisions;
2. Allied trades professionals to estimate input requirements and revenue potential for wholesale
ornamental nurseries;
3. Industry investors as a guideline for typical returns on investments;
4. Extension educators to use for conducting educational programs with nursery managers;
5. Researchers to support research in the ornamental horticulture industry by providing
information to assess economic impacts of new technologies and management practices.

Nursery firms that participated in the Nursery Business Analysis Program did so on a strictly voluntary
basis. Therefore, this is not a statistically representative sample of firms. However, it is believed to
represent firms with above-average management quality, by virtue of their willingness to participate in
quality improvement programs such as the Nursery Business Analysis. Managers who participated in
this program received a report with information similar to that presented in this paper.


1. Economic Analyst, University of Florida, Food & Resource Economics Department, PO Box 110240,
Gainesville FL 32611, tel 352-392-1881 ext. 312, fax 352-392-9898, email awh@gnv.ifas.ufl.edu.

2. Statistician and Extension Economist, respectively, University of Florida, Central Florida Research and
Education Center, Apopka, FL. tel 407-884-2034






PROCEDURES


Information Collected and Reported

Information for this report was collected from 50 wholesale ornamental nursery firms in Florida for the
1995 fiscal year. Information gathered included monthly sales, other income, expenses itemized in 25
categories, assets and liabilities, inventory values, value of leased property, production area, and
labor hours or number of fulltime persons employed. Information was gathered from company
financial statements or income tax forms, and other production records. In most cases, these data
were for the calendar year period of January to December, 1995, but in a few instances up to six
months data were for 1994 or 1996. Data were taken from company financial statements or tax
returns and other production records, and transcribed to standardized worksheets (see Appendix B)
and entered into computer spreadsheets for analysis. Reported results represent weighted averages
for firms in each group, so larger firms had greater influence on the results by virtue of their greater
values for sales, expenses, etc. Trends in operating results between the 1995 and 1990 were
calculated as a percentage change by taking difference between 1995 and 1990 values, then dividing
by the 1990 value. Changes in monetary values were adjusted for inflation using the Consumer Price
Index (US Dept. Labor), which showed a 16.6% increase between 1990 and 1995.

Industry Groups Analyzed

Records were separately compiled and analyzed for four different groups of crops and production
system types in the wholesale ornamental plant nursery industry: containerized woody ornamentals,
flowering plants, and tropical foliage plants in Central and South Florida. Production systems for
woody ornamentals are characterized by open growing areas, while producers of tropical foliage and
flowering plant products typically have weatherized greenhouses or shadehouses. Within each
industry group, data were also analyzed by subgroups of large firms, small firms, and highly profitable
firms where possible. Large firms were defined as having annual sales of $1 million or greater, while
small firms had sales of less than $250 thousand. Highly profitable firms were defined as having
returns to capital of at least 15 percent. The number of firms sampled in each industry group, and
large, small and highly profitable firms are shown in Table 1. Of these 50 firms providing information
for 1995, 25 had also previously participated in the program for 1990.

Table 1. Number of Florida ornamental plant nursery firms sampled for the Nursery Business
Analysis Droaram, 1995.







In order to assure confidentiality for participating firms, results are reported separately only for those
industry groups for which 3 or more firms participated. Therefore, it was not possible to report results
specifically for field grown woody ornamentals, or for large, small or highly profitable firms in some
other industry groups.

Accounting Conventions

A number of accounting conventions were adopted for the Nursery Business Analysis program in
order to standardize the collection of information from different firms and to make possible consistent
comparisons among different groups and across years.

Sales of resold or "brokered" plants from other firms were deducted from total sales to give nursery-
produced sales. Net returns from brokered sales were included in miscellaneous income. For some
firms with a large proportion of brokerage sales, a portion of fixed costs and overhead expenses were
charged as nursery production expenses. For firms with diversified operations which contributed
records for two or more industry sectors, overhead costs and asset values allocated to each
enterprise in proportion to product sales.

Plant inventories were accounted for on an accrual basis, where changes in inventory values were
added to sales to calculate total value of production and total income. Inventories were also included
among owned capital investments. Plant inventories were normally valued at wholesale market value,
based on average actual prices realized, and appropriately discounted for unfinished products. For
example, if a crop is normally grown for 8 months and is aged 6 months at the year's end, it would be
valued at 75 percent of its normal wholesale value. In the absence of detailed inventory records, plant
inventories were evaluated at 50 to 75 percent of finished wholesale value for all plants in production.

All assets and liabilities were evaluated to represent a mid-year position by averaging the beginning
and ending values for the period. Investments in buildings, site improvements, machinery and
equipment were taken at book value, i.e. original cost less accumulated depreciation. Leased capital
assets in land, buildings, and equipment were estimated at current market value. Investments in land
were generally valued at the original purchase price, which did not reflect the current appreciated
value of landholdings for many older firms. In cases where assets were personally owned by
corporate officers and leased exclusively to the company, these assets were taken at book value
rather than market value, and debts to corporate officers were not included among company liabilities
when there was no intention to repay these debts. In some cases, lease payments for land were
taken as compensation for management.







RESULTS


Basic information on income, productive resources, assets and liabilities, expenses, and net returns
are presented for each industry group in Tables 2 through 6. Analytical measures of productivity,
efficiency, profitability, financial solvency and liquidity are given in Tables 7 through 10. Complete
results for large, small, and highly profitable firms and the container woody ornamental, Central and
South Florida foliage industry groups, are given in Appendix Tables 1 through 4. Changes in all
results for the Florida Nursery Business Analysis between 1990 and 1995 are given in Appendix
Table 5.

Income and Value Produced

Annual Sales

Nursery plant sales averaged $1.54 million (MM) for all firms and ranged from $688 thousand (M) for
Central Florida foliage nurseries to $2.70MM for South Florida foliage firms, as shown in Table 2.
Large firms had average sales of $3.96MM (Appendix Table 1). These sales values represent only
plants produced by the participating nursery firms; sales of plants purchased for immediate resale or
"brokered" were deducted from total sales to give the net value of nursery-produced plant sales.
Average sales per firm in 1995 were 45 percent higher than in 1990 for all nurseries, and were 81%
higher for container nurseries in inflation-adjusted terms (Appendix Table 5). This large change in
sales between 1990 and 1995 may be attributed to growth in the industry and a changing sample of
firms.
Table 2. Income and value produced, Florida ornamental plant nurseries, 1995.
Container Central South
Flowering Florida Florida
Income Measure All Firms Woody Plants Florida Florida
Ornam. Foliage Foliage
Thousands Dollars
Nursery plant sales 1,535 1,144 2,624 688 2,696
Change in plant inventory value 219 276 16 (18) 362
Value produced 1.754 1.420 2.640 670 3.058
Miscellaneous income 152 155 644 9 128
Total income 1,906 1,575 3,284 679 3,186


Monthly Sales

The distribution of monthly sales as a percentage of total sales is shown in Figure 1. All industry
groups generally followed similar trends: peak sales during the spring months (Mar.-May), followed
by declining summertime sales, then a smaller second peak in November. Flowering plant nurseries
had dramatically more seasonal sales with nearly 50% of annual sales during the spring months and
less than 5% monthly during the summer. Presumably this pattern was related to the market for
holiday crops. Central Florida foliage firms had strong sales in January, which were nearly as great as
March and May. Sales were least seasonal for South Florida foliage nurseries with all months
comprising less than 10% of annual sales. December was the month of lowest sales for all groups
except flowering plants, representing only 6% to 7% of annual sales.







Percent of Annual Sales


30% All Firms

25%- Woody
Container
20%
Flower
15% S

10%s\ Centra Il
10% >- .-----S 1 Foliage

5% .__ South
Foliage
0%
Jan FebMarAprMayJun Jul Aug SepOctNovDec
Figure 1. Monthly sales as a percentage of annual sales for Florida ornamental plant nurseries, 1995.


Plant Inventory Change and Total Value Produced

Changes in plant inventory values over the year (Jan. 1--Dec. 31) averaged $219M for all firms, which
represented 14% of annual sales (Table 2). Inventory change was positive for all industry groups
except Central foliage which declined slightly. Total value produced is a measure of productive effort
by a nursery, calculated as the sum of own plant sales and change in plant inventory value. It
averaged $1.49MM for all firms, which was an increase of 53% from that in 1990 in inflation-adjusted
terms. Value produced ranged from $670M for Central foliage to $3.06MM for South Florida foliage
(Table 2). Large firms had an average value produced of $4.56MM (Appendix Table 1).

Total Income

Total income was the sum of plant sales, changes in plant inventory values, and miscellaneous
income from brokerage services, interest on accounts, rents, and other charges. It averaged
$1.91MM for all firms, which represented a 65% increase from 1990 in inflation-adjusted terms. Total
income ranged from $679M for Central foliage firms to $3.28MM for flowering plant firms (Table 2),
and averaged $5.01MM for large firms (Appendix Table 1).


Assets, Liabilities and Net Worth

Assets and liabilities were taken to represent the mid-year financial position of firms, calculated as an
average of beginning and ending balance sheet figures. These results are summarized in Table 3.

Assets

Total assets averaged $2.60MM for all firms, which was a 107% increase from 1990 (inflation-
adjusted). Assets ranged from $630M for Central foliage firms to $3.91MM for South foliage firms






(Table 3), and averaged $6.84MM for large firms.


Current Assets consisted of cash on hand, accounts receivable, and plant and supply inventories.
Current assets averaged $1.96MM for all firms and ranged from $520M for Central foliage firms to
$2.57MM for South foliage nurseries (Table 3).

Long-term Assets included owned investments in buildings, machinery and land, all taken at book
value. Long-term assets averaged $638M for all firms, and ranged from $31 for field nurseries to
$1.34MM for South foliage nurseries (Table 3).

Table 3. Assets, liabilities and net worth of Florida ornamental plant nurseries, 1995.
Scontainer Flowering Central South
Item All Firms Woody Plants Foliage
rn. Plants Foliage Foliage
Ornam.
Thousands Dollars
Assets
Plant inventory 1,628 2,165 718 331 2,035
Supply inventory 54 40 57 31 100
Cash & acc. receivable 279 239 407 158 430
Total current assets 1.961 2.444 1.182 520 2.565
Land 221 286 30 26 378
Machinery & equipment 129 80 124 22 317
Buildings & installations 288 208 348 62 646
Total long-term assets 638 574 502 110 1.341
Total assets 2.600 3.018 1.685 630 3.906

Liabilities & Net Worth
Current liabilities 265 173 107 60 646
Long-term liabilities 759 894 216 96 1,315
Total liabilities 1.024 1.067 323 156 1.961
Net worth 1,576 1,951 1,362 474 1,945


Liabilities

Total liabilities averaged $1.02MM for all firms, which was an increase of 221% from 1990. Liabilities
ranged from $156M for Central foliage firms to $1.96MM for South foliage nurseries (Table 3), and
averaged $2.74MM for large firms.

Current Liabilities, including accounts payable and other liabilities payable within one year,
averaged $264M for all firms and ranged from $60M for Central foliage to $646M for South foliage
firms (Table 3).

Long-term Liabilities, including notes payable and mortgages, averaged $759M for all firms and
ranged from $96M for Central foliage to $1.31MM for South foliage nurseries (Table 3).

Net Worth






Net worth or equity is the difference between total assets and total liabilities and represents the value
of the owners' share of assets. It averaged $1.58 MM for all firms, which represented a 69% increase
from 1990. Net worth ranged from $474M for Central foliage firms to $1.94MM for South foliage firms
(Table 3), and averaged $4.10MM for large firms (Appendix Table 1).


Productive Resources Used

Productive resources of land, labor and capital used by Florida ornamental nurseries are summarized
in Table 4. Land and capital used represent averages of beginning and ending values for the year.

Land

Space available for growing plants was measured in acreage of net usable growing area, taken as an
average of the amounts in use at the beginning and end of the year. Net usable growing area
included only space within growing beds and fields; aisles, driveways and other service areas were
excluded. Growing space averaged 34.12 acres for all firms, which was a 71% increase since 1990
(Appendix Table 5). Growing area varied from 3.59 acres for Central Florida foliage nurseries to 54
acres for container nurseries (Table 4), and averaged 90.4 acres for all large firms (Appendix Table
1). Growing space increased by 522% for container firms.

Table 4. Productive resources of Florida ornamental plant nurseries, 1995.
Container Central South
Resource All Firms Woody Flowering Florida Florida
Plants
Ornam. Foliage Foliage
Production Area (acres) 34.12 54.07 15.27 3.59 24.81
Employees (FTE persons) 32.92 26.22 53.29 12.31 57.60
Capital Managed (Including leased assets) in Thousands Dollars
Land 384 478 239 90 542
Equipment 142 85 124 66 321
Buildings 323 221 413 156 649
Inventories 1,682 2,205 776 362 2,135
Cash and accounts receivable 279 239 407 158 430
Total capital managed 2,810 3,227 1,959 832 4,077


Labor

Physical labor resources used were measured in terms of fulltime equivalent (FTE) persons, including
production, administrative, sales, and management personnel. In most cases, this was calculated by
dividing total labor hours by 2,080 hours per worker-year (52 weeks at 40 hours per week). The
number of full-time equivalent persons averaged 32.9 for all firms, which represented a 72% increase
from 1990. The number of FTE's ranged from 12.3 for Central foliage nurseries to 57.6 for South
Florida foliage firms (Table 4) and averaged 85.0 for all large firms (Appendix Table 1).

Capital Managed

All forms of both owned and leased assets in land, buildings, equipment and working capital
represented capital resources for nursery operations. Owned capital in buildings, improvements and






equipment were assessed at book value, while leased assets were taken at market value. Total
capital managed averaged $2.81MM for all firms, which was a 106% increase from 1990. Capital
managed ranged from $831M for Central Florida foliage firms to $4.08MM for South foliage nurseries
(Table 4) and averaged $7.3MM for all large firms.

The proportions of total capital managed in land, buildings, equipment, inventories, cash, and
accounts receivable varied considerably among industry groups. Growing plants represented the
largest share of capital managed for all industry groups, ranging from 37% for flowering plant firms to
over 68% for woody container nurseries. Land was second in importance as a share of total capital
managed for woody container (20%) and South foliage nurseries (21%). Buildings and installations
were the second largest category for Central foliage (20%), and flowering plant firms (18%).
Machinery and equipment represented less than 10% of total capital managed, except for flower firms
(15%). Cash and accounts receivable ranged from 7% (woody container) to 18% (Central foliage) of
managed capital.


Expenses

Operating expenses were grouped into the following categories: management's compensation,
employees' wages and benefits, materials, facility and equipment, administrative overhead,
depreciation, and interest. Costs for each industry group are summarized in Table 5 and a listing of
expenses for all 25 itemized expense categories is given in Appendix Table 6. Expenses for income
taxes were not considered in this analysis.

Table 5. Expenses for Florida ornamental plant nurseries, 1995.
Container Central South
Flowering Florida Florida
Expense Category All Firms Woody Plants Florida Florida
Ornam. Foliage Foliage
Thousands Dollars
Management's compensation 79 105 71 51 61
Employees' wages and benefits 593 462 969 212 1,053
Materials 561 376 1,158 261 977
Facility and equipment 87 78 189 37 117
Overhead 280 204 235 94 593
Depreciation 67 55 75 18 139
Interest 78 85 39 9 147
Total expenses 1,743 1,367 2,734 681 3,088


Management's Compensation represented salaries and benefits paid to owners and top
management. These expenses averaged $79M for all firms, which was a 25 percent increase from
1990. Management's compensation ranged from $51M for Central Florida foliage nurseries to $104M
for container firms (Table 5) and averaged $156M for large firms (Appendix Table 1).

Employees' Wages and Benefits was the largest expense category in the ornamental plant
industry. In addition to wages and salaries, this category included payroll taxes (social security),
workman's insurance, health insurance, bonuses, and other benefits paid. Expenses averaged
$593M for all firms, which was a 82 percent increase from 1990. Expenses ranged from $206M for
field firms to $1.05MM for South foliage firms (Table 5) and averaged $1.58MM for large firms.







Materials included expenses for plants and seeds, containers, peat and soil, fertilizer and lime,
pesticides and chemicals, packaging materials, heating fuel, and other production supplies such as
tags, and small tools. All of these items would normally be considered "direct" expenses or "cost of
goods sold". Expenses for materials averaged $560M for all firms, which was increased 40 percent
from 1990. Expenses ranged from $172M for field nurseries to $1.16MM for flowering plant firms
(Table 5) and averaged $1.46MM for large firms. Shrinkage in supply inventories was also included in
this category, but was an insignificant amount in all cases.

Facility and Equipment included repairs and maintenance for nursery facilities and equipment
operating costs such as fuel. Expenses averaged $87M for all firms, up 66 percent from 1990.
Expenses ranged from $18M for field nurseries to $188M for flower nurseries (Table 5) and averaged
$221 for large firms.

Administrative and Overhead included travel and entertainment, property insurance, telephone,
electric power, advertising, property taxes and business licenses, rent and other cash expenses such
as professional services, trade association memberships, office expenses and miscellaneous.
Expenses averaged $280M for all firms, and ranged from $58M for field nurseries to $593M for South
foliage firms (Table 5) and averaged $750M for large firms. These expenses increased by 132
percent since 1990.

Interest for borrowed capital in the form of mortgages, promissory notes, and charge accounts
averaged $78M for all firms. This represented an increase of 227 percent from 1990, more than any
other expense category. Interest expenses ranged from less than $1M for field firms to $147M for
South foliage firms (Table 5) and averaged $213M for large firms.

Depreciation is a non-cash costs that is not paid directly but is nonetheless a real costs of business
over the long term. Depreciation allowances taken on buildings and equipment represent the
decreasing value of these assets. Depreciation expenses were usually taken from company income
tax returns, computed according to the ACRS method (3, 5, or 7 years) for equipment, and straight-
line or double declining balance methods (10 to 20 years) for buildings and improvements. Expenses
averaged $66M for all firms, which was up 44 percent from 1990. Depreciation ranged from $10M for
field firms to $139M for South foliage firms (Table 5) and averaged $164M for large firms.

Total Costs for all expenses categories averaged $1.74MM for all firms, a 69 percent increase from
1990. Total costs were $681M for Central foliage firms, $1.37MM for container growers, $541M for
field nurseries, $2.73MM for flowerering plant producers, $3.08MM for South Florida foliage nurseries
(Table 5) and averaged $4.55MM for large firms.


Net Returns

Net returns to nursery producers were evaluated with three measures that represent different aspects
of profitability in relation to different groups of costs, as summarized in Table 6. Net returns as a
percentage of total income or capital owned are presented in the section "Profitability" and in Table 9.

Net Firm Income

This measure was calculated as the difference between total income and total costs except
management and interest costs, and excluding income taxes. Net income averaged $320M for all
firms, a 52 percent increase from 1990. Net income was $659M for Central Florida foliage nurseries,






$398M for woody ornamental container growers, $659M for flowering plant firms, and $306M for
South foliage nurseries (Table 6). Net income averaged $835M for large firms and $742M for highly
profitable firms (Appendix Table 1).

Table 6. Net returns for Florida ornamental plant nurseries, 1995.
Container Central South
Measure All Firms Woody Flowering Florida Florida
Plants
Ornam. s Foliage Foliage
Thousands Dollars
Net firm income 320 398 659 58 306
Return to capital 241 293 588 7 245
Return on net worth 163 208 550 (2) 97


Return on Capital

This measure represented profits after management expenses were deducted from net firm income
(above) to give the net returns attributable to the capital investment. Return to capital averaged
$241M for all firms, a 63 percent increase from 1990. It ranged from $7M for Central foliage firms to
$588M for flowering plant firms (Table 6) and averaged $679M for large firms (Appendix Table 1).

Return on Net Worth

This is the most comprehensive measure of net returns attributable to the owner's equity. It was
calculated as total income minus total costs, which is equivalent to return to capital less interest
expenses. Return on net worth averaged $163M for all firms, which was a 32 percent increase from
1990. It ranged from negative $2M for Central foliage firms to $549M for flowering plant nurseries
(Table 6). It averaged $466M for large firms and $619M for highly profitable firms (Appendix Table 1).


Productivity, Efficiency and Resource-Use Intensity Indicators

The basic data presented in Tables 2 through 6 were analyzed with a number of indicators of
productivity, efficiency, resource-use intensity, profitability, and financial risk. These indicators
express relationships in the level of use of the three major productive resources--nursery growing
space, labor, and capital--as ratios together with key monetary values. These ratios provide a
measure of the relative importance of each resource towards achieving profitable operations in
different types of production systems. Results are summarized by industry group in Tables 7, 8 and 9;
detailed results for subgroups of large, small, and highly profitable firms are given in Appendix Tables
1 through 4.

Value Produced Per Square Foot

The productivity of nursery space was measured by value of production (annual sales plus inventory
change) per square foot of growing space. For all firms, it averaged $1.18 per square foot or $51M
per acre, which represented a 1 percent decrease from 1990. This measure varied widely among
industry groups. Central foliage and flowering plant nurseries had significantly higher space
productivities because of their highly intensive production systems, while woody container firms had
much lower values (Table 7). In all industry groups, larger firms and highly profitable firms had
above-average nursery space productivity, while small firms had below-average values, indicating the





importance of this indicator for profitable nursery operations. Nursery space productivity is affected by
nursery layout and space utilization efficiency (vacancy), plant growth rates and survival, and
inventory turnover (see below).

Table 7. Physical productivity, efficiency and resource use intensity indicators for Florida ornamental
plant nurseries, 1995.
Container g Central South
Measure All Firms Woody Plants Florida Florida
Ornam. Foliage Foliage
Value produced per sq. foot growing area $1.18 $0.60 $3.97 $4.29 $2.83
Growing area per person (acres/ FTE) 1.04 2.06 0.29 0.29 0.43
Plant inventory turnover 0.94 0.53 3.65 2.08 1.32
Asset turnover 0.59 0.38 1.56 1.09 0.69
Thousands Dollars
Capital managed per acre 82 60 128 232 164
Capital managed per FTE 85 123 37 68 71
Value produced per FTE 53 54 50 54 53


Plant Inventory Turnover

This is an indicator of productivity that expresses the rate at which inventory is replaced on an
ongoing basis, calculated by dividing annual sales by average inventory value. This measure
accounts for the inherent value of different nursery crops. It can be interpreted as the number of
"crops" per year. Inventory turnover averaged 0.94 for all firms, which means there was an average
of 0.94 crops per year or a crop cycle of 1.06 years. This value fell by 35 percent from 1990.
Inventory turnover generally followed a pattern among industry groups similar to that for value
produced per square foot: high values for flowering plant and foliage nurseries, lower values for
woody ornamental firms (Table 7). Highly profitable Central Florida foliage firms had above-average
inventory turnover, but highly profitable firms in other groups did not. Large firms tended to have
lower inventory turnover. Low inventory turnover is common for new and rapidly expanding firms
because of large inventories of immature plants. The inventory turnover measure must be applied
carefully or it can be misleading.

Asset Turnover

This indicator is analogous to inventory turnover except that it expresses the ratio of annual sales to
total assets. Asset turnover averaged 0.59 for all firms, or in other words, annual sales were 59% of
total owned assets (Table 7). This figure was down by 30 percent from 1990 for all groups. Flowering
plant growers and Central Florida foliage nurseries had higher asset turnover rates, while woody
ornamental container nurseries had lower turnover rates. In general, high asset turnover is desirable,
indicating greater sales per dollar of investment. Low asset turnover rates may result from low labor
or space productivity or excessive capital investment.

Value Produced Per Worker

Labor productivity was measured in terms of value produced per fulltime equivalent (FTE) worker, or
per 2080 labor hours per year. Over all firms, labor productivity averaged $53M per FTE, which was
down by 11 percent from 1990. Labor productivity varied among industry groups relatively less than






other resource productivity measures, ranging from $50M per FTE for flowering plant growers to
$54M for container and Central foliage nurseries (Table 7). Small firms had below average labor
productivity. Highly profitable firms did not necessarily have above-average labor productivity.
Variations in labor productivity may result from differences in investment for labor-saving equipment,
labor management practices, and practices affecting crop turnover.

Growing Area Managed Per Worker

The intensity of labor use was evaluated in terms of production area (acres) per FTE person. For all
firms, growing space per FTE averaged 1.04 acres (Table 7) or 0.96 FTE persons per acre. This
value was unchanged since 1990. Woody ornamental nursery firms had a much higher ratio of
growing space to labor, averaging 2.1 acres per FTE, while Central foliage and flowering plant firms
had about 0.29 acres per FTE. Highly profitable container and foliage nursery firms had a lower ratio
of growing space to employees (Appendix Tables 2-4).

Capital Managed Per Worker

The intensity of capital use in relation to labor was measured as the ratio of managed capital (owned
plus leased) to number of persons employed. This measure averaged $85M per FTE for all firms,
which was a 20 percent increase from 1990. It ranged from $36M for flowering plant firms to $181M
for field firms (Table 7). The substantially higher capital-labor intensity for field nurseries was due to
their greater mechanization and investment in land and plant inventory. There was no clear pattern in
capital managed per FTE in relation to firm size or profitability.

Capital Managed Per Acre

The intensity of capital use in relation to nursery space was measured as the ratio of capital managed
to growing area (acres). Capital managed per acre of growing area averaged $82M for all firms, an
increase of 20 percent since 1990. This measure ranged from $60M for woody ornamental container
firms to $231M for Central Florida foliage firms (Table 7). Small firms had above-average capital
managed per acre for container and foliage nurseries (Appendix Tables 2-4). Highly profitable firms
had slightly below-average capital managed per acre for container nurseries, but it was above-
average for Central Florida foliage firms.


Cost Efficiency

Costs per square foot of growing area and costs per unit revenue were used as measures of cost
efficiency, as summarized in Table 8.

Cost Per Square Foot

The cost per unit of growing space is a useful measure for estimating individual plant growing costs or
comparing cost efficiencies of different production systems. Total costs per square foot of growing
area averaged $1.17 for all firms, which was a 1 percent decrease from 1990. Costs per square foot
varied from $0.16 for field nurseries to $4.36 for Central Florida foliage (Table 8). These results
paralleled those for value of production per square foot and inventory turnover. Highly profitable firms
had lower costs per square foot, except for Central Florida foliage firms. Small firms had above-
average costs per square foot in all groups.







Table 8. Cost efficiency Indicators for Florida ornamental plant nurseries, 1995.
Container Central South
Flowering Florida Florida
Measure All Firms Woody Plants Florida Florida
Ornam. Foliage Foliage
Total cost per square foot of $1.17 $0.58 $4.11 $4.36 $2.86
growing area
Costs Per Dollar Value Produced
Management 4.5% 7.4% 2.7% 7.5% 2.0%
Employee labor 33.8% 32.6% 36.7% 31.6% 34.4%
Materials 32.0% 26.5% 43.8% 38.9% 31.9%
Facility and equipment 4.9% 5.5% 7.2% 5.5% 3.8%
Administrative overhead 16.0% 14.4% 8.9% 14.1% 19.4%
Depreciation 3.8% 3.9% 2.8% 2.7% 4.6%
Interest 4.4% 6.0% 1.5% 1.4% 4.8%
Total 99.4% 96.3% 103.6% 101.6% 101.0%


Cost As a Share of Value Produced

Analysis of expenses in relation to the value of production has proven to be one of the most reliable
measures of cost efficiency in many industries. Costs per dollar value produced are discussed for
each cost category below. Changes in costs between 1990 and 1995 represent percentage changes
from the 1990 levels. For example, if costs as a share of value produced were 10% (.10) in 1990 and
15% (.15) in 1995, this change would be a 50 percent increase [(0.15 0.10) / 0.10 = 0.50].

Management cost per dollar value produced averaged 4.5% for all firms which was a decrease of 18
percent since 1990. It ranged from 2.7% for flowering plant firms to 7.5% for Central foliage firms
(Table 8) and averaged 3.4% for large firms, 15.2% for small firms, and 4.2% for highly profitable
firms (Appendix Table 1). Because of economies of scale, differences in management cost efficiency
among industry groups are partly due to differences in average size of firms.

Employee Wages and Benefits averaged 33.8% of value produced for all firms and increased 19
percent since 1990. It ranged from 31.6% for Central foliage nurseries to 36.7% for flowering plant
growers (Table 8). Large firms had labor costs slightly above-average at 34.7%, while small firms had
costs well below average at 23.4% (Appendix Table 1). Labor costs were strongly related to
profitability: in each industry group highly profitable firms had below-average labor costs, and across
all firms the most profitable ones had labor costs of 30.4% of value produced.

Materials costs represented 32.0% of value produced for all firms, which was a decrease of 8
percent from 1990. Costs ranged from 26.5% for woody container firms to 43.8% for flower growers
(Table 8). Highly profitable firms and small firms had below-average supply costs of 24.3% and
27.3%, respectively (Appendix Table 1).

Facilities and Equipment costs averaged 4.9% of value produced for all firms, an increase of 8
percent from 1990. These costs ranged from 3.8% for South Florida foliage nurseries to 7.2% for
flowering plant nurseries, which were highest because of greater equipment costs (Table 8). Highly
profitable firms had slightly below-average costs of 4.4%.






Administrative and Overhead costs averaged 16.0% of value produced for all firms, a 51 percent
increase from 1990. These costs ranged from 8.9% for flowering plant firms to 19.4% for South
foliage firms (Table 8). Within each industry group, overhead costs were below average for the
smallest firms. Highly profitable firms also had substantially below-average overhead costs of 9.0%
(Appendix Table 1).

Interest for borrowed capital averaged 4.4% of value produced for all firms. This represented a
114% increase from 1990, the highest of any cost category. Costs ranged from 1.4% for Central
Florida foliage firms to 4.8% for South foliage firms (Table 8). Large firms had interest costs of 4.7%
and highly profitable nurseries has costs averaging 3.7% of value produced (Appendix Table 1).

Depreciation costs averaged 3.8% of value produced for all firms, which was a 6 percent decrease
from 1990. Cost ranged from 2.7% for Central Florida foliage nurseries to 4.6% for South Florida
foliage firms (Table 8), and were 3.5% of value produced for highly profitable firms (Appendix Table
1).
Profitability

Profitability measures express net returns as a proportion of their business indicators, such as total
income, assets or net worth. These measures are summarized in Table 9.

Table 9. Profitability indicators for Florida ornamental plant nurseries, 1995.
Container Central South
Measure All Firms Woody Flowering Florida Florida
Ornam. Foliage Foliage
Net Margin 12.6% 18.6% 17.9% 1.1% 7.7%
Rate of Return to Capital 9.3% 9.7% 34.9% 1.2% 6.3%
Rate of Return on Net Worth 10.3% 10.7% 40.4% -0.4% 5.0%


Net Margin

Net margin is the ratio between net nursery income and total income (Tables 6 and 2, respectively),
or in other words, the share of total income that is net income. Net margin averaged 12.6% for all
firms, a 1 percent decrease from 1990. Net margin ranged from 1.1% for Central foliage to 18.6% for
woody container nurseries (Table 9). Highly profitable firms had net margins averaging 36.3%. Over
all groups, both large and small firms had slightly above-average net margins of 13.5% and 16.6%,
respectively (Appendix Table 1). Small Central Florida foliage firms had a negative net margin.

Rate of Return on Capital

This measure is a common indicator for evaluating alternative investments and is calculated by
dividing return to capital by the value of total assets (Tables 6 and 3, respectively). Rate of return on
capital averaged 9.3% percent for all firms, a decrease of 21 percent from 1990. It ranged from 1.2%
for Central foliage to 34.9% for flowering plant growers (Table 9). Highly profitable firms, i.e. those
having at least 15% rate of return on capital, had an average rate of return on capital of 28.0%. Large
firms had average rates of return of 9.9% and small firms had returns of 10.7%, but firm size was not
consistently related to this measure of profitability.






Rate of Return on Net Worth


This is the most comprehensive measure of profitability and is calculated by dividing return on net
worth by net worth (Tables 6 and 3). This measure takes into account the financial risk embodied in
the leverage factor (see below) and is comparable to annualized yields on stocks, bonds, or savings
deposits. Return on net worth averaged 10.3% for all firms, a 22 percent decrease from 1990.
Returns ranged from minus 0.4% for Central foliage to 40.4% for flower firms (Table 9). Highly
profitable firms averaged 36.9% rate of return on net worth. Both large and small firms had returns
on net worth slightly above average (Appendix Table 1).


Financial Risk

Financial solvency and liquidity were summarized with two financial ratios, the quick ratio and the
leverage ratio, as shown in Table 10.

Table 10. Financial ratios for Florida ornamental plant nurseries, 1995.
Container Central South
Ratio All Firms Woody Flower Florida Florida
Ornam. Foliage Foliage
Quick Ratio 1.05 1.38 3.81 2.65 0.67
Leverage Ratio 1.65 1.55 1.24 1.33 2.01


Quick Ratio

The quick ratio is a measure of a firm's ability to meet short-term debts. It is calculated by dividing
cash and accounts receivable by current liabilities (Table 3). Cash and accounts receivable are the
most liquid of current assets, which are usually available on short notice, but inventories are not
included in this measure because they may not be immediately salable. A value for this ratio below
1.0 would indicate an illiquid position. The quick ratio averaged 1.05 for all firms, which was a 57
percent decrease from 1990. It ranged from 0.67 for South foliage to 3.81 for flower firms (TablelO).
Highly profitable firms had quick ratios averaging 1.30, and large firms averaged 0.96 (Appendix
Table 1).

Leverage

This measure expresses the ratio between total assets and net worth (Table 3), and is an indicator of
long-term solvency. Higher values indicate greater risk, with potential for greater returns and greater
losses. The leverage ratio averaged 1.65 for all firms, a 23 percent increase from 1990. It ranged
from 1.22 for field nurseries to 2.01 for South Florida foliage firms (Table 10). There was no
consistent trend in leverage with respect to firm size or profitability. Generally, leverage factors below
2.0 are considered to represent a very safe financial position. The impact of financial leverage on
profitability can be understood as a multiplier: leverage multiplied by the rate of return to capital
assets equals the rate of return on net worth. Since leverage is always greater than or equal to one,
return on net worth is always greater than rate of return on capital assets, either positively or
negatively.





Summary of Key Factors Affecting Profitability


The most profitable firms in each industry may be characterized by outstanding performance on a
number of the productivity and efficiency indicators. Highly profitable firms generally had a high value
produced per square foot and low costs per dollar value produced for labor, materials and overhead
expenses. Highly profitable container woody ornamental nurseries had a low value for capital
managed per acre and per FTE employee. Highly profitable Central Florida foliage firms had above
average turnover measures, and were low on capital managed per FTE, but high in capital managed
per acre. Highly profitable South Florida foliage firms were above average on both capital managed
per acre and per FTE employee.


REFERENCES

Census Bureau. 1993. Census of Agriculture, 1992, Vol. 1, Geographic Area Series, Part 9, Florida
State and County Data, AC92-A-9. U.S. Department of Commerce, Economics and Statistics
Administration, Washington, DC.

Department of Plant Industry (DPI). 1995. Certified Nursery Directory. Florida Department of
Agriculture and Consumer Services, Gainesville, FL.

Hodges, A.W. 1992. Business Analysis of Ornamental Plant Nurseries in Florida, 1990. Economic
Information Report ER92-1r. University of Florida Food & Resource Economics Department,
Gainesville.

Hodges, A.W., J.J. Haydu and P.J. van Blokland. 1996. Adaptation to Competition and Structural
Change in Florida's Ornamental Plant Nursery Industry, 1989 to 1994. Pp 309-316 In: Proceeding of
the Xlllth International Symposium on Horticultural Economics, ed. R. Brumfield, Aug 4-9, 1996,
Rutgers University. Published by the International Society for Horticultural Science, Belgium.

Johnson, D.C and T.M. Johnson. 1993. Financial Performance of US Floriculture and Environmental
Horticulture Farm Businesses, 1987-91. Statistical Bulletin Number 862, USDA Economic Research
Service, Washington, DC, 135 p.


APPENDICES

A: Appendix Tables

B: Florida Nursery Business Analysis Worksheet












16






Appendix Table 1. Results for participating large, small, and highly profitable Florida ornamental
plant nurseries, 1995. See Table 1 for industry group composition of large, small and highly profitable


firms.


Measure Units Large Firms Small Firms Highly Profitable
Firms
Number of Firms Number 16 14 11
Physical Production Area Acres 90 44 2.33 54.21
Resources Employees FTEs 84.86 3.80 3076
Income Own Plant Sales Thous. $ 3,955 111 1,118
Change Plant Inventory Value Thous $ 604 34 443
Value Produced Thous. $ 4.559 145 1,561
Total Income Thous. $ 5,013 152 1,860
Assets Plant Inventory Thous. $ 4,465 112 1.802
Supply Inventory Thous. $ 151 2 28
Cash & Accounts Receivable Thous. $ 725 28 222
Land Thous. $ 454 67 187
Machinery/Equipment Thous. $ 323 11 54
Buildings & Installations Thous $ 725 15 119
Total Assets Thous. $ 6,843 237 2,413
Liabilities & Current Liabilities Thous. $ 751 13 171
Net Worth Long-Term Liabilities Thous. $ 1,984 68 563
Total Liabilities Thous $ 2,735 81 734
Net Worth Thous. $ 4,108 156 1,679
Other Capital Land Leased Thous. $ 377 13 188
Managed Equipment Leased Thous $ 25 0 7
Buildings Leased Thous $ 70 1 17
Total Capital Managed Thous. $ 7,315 251 2.624
Expenses Management Thous $ 156 22 66
Employee Wages & Benefits Thous $ 1,580 34 475
Materials Thous. $ 1,463 40 380
Facility/Equipment Thous. $ 221 7 69
Overhead Thous $ 750 20 141
Depreciation Thous $ 164 5 54
Interest Thous. $ 213 5 57
Total Costs Thous $ 4.547 132 1,242
Net Returns Net Nursery Income Thous. $ 835 47 742
Return to Capital Thous $ 679 25 676
Return on Net Worth Thous. $ 466 20 619
Physical Capital Managed Per FTE Thous, $ 86 66 85
Productivity & Capital Managed Per Acre Thous. $ 81 108 48
EIniciator Value Produced per FTE Thous. $ 54 38 51
Area Per FTE Acres 1.07 0.61 1 76
Value Produced Per Square Foot $ 1.16 1.43 066
Inventory Turnover ratio 0.89 0.99 0.62
Asset Turnover ratio 0.58 0.47 0.46
Total Cost per Square Foot $ 1.15 1.30 0.53
Cost Per $ Management % 3.4% 15.2% 4.2%
Value Labor % 34.7% 23 4% 30.4%
Produced Materials % 32.1% 27.3% 24.3%

Facility/Equipment % 4.9% 4.8% 4.4%
Overhead % 16.4% 13.6% 9.0%
Depreciation % 3.6% 3.3% 3.5%
Interest % 4.7% 3.5% 3.7%
Cash Cost/Sales % 109.6% 113.9% 105.9%
Profitability Net Margin % 13.5% 16.6% 36.3%
Rate of Return to Capital % 9.9% 10.7% 28 0%
Rate of Return on Net Worth % 11.3% 12.9% 36.9%
Financial Quick Ratio ratio 0.96 2.14 1.30
Ratios Leverage Ratio ratio 1.67 1.52 1.44






Appendix Table 2. Results for all, large, small and highly profitable container woody ornamental
nurseries in Florida, 1995.
Highly Profitable
Measure Units All Firms Large Firms Small Firms Firms

Number of Firms Number 21 6 8 5
Physical Production Area Acres 54.07 162.42 2.83 87.32
Resources Employees FTEs 26.22 71.55 4.19 4705
Income Own Plant Sales Thous $ 1,144 3,093 116 1,679
Change Plant Inventory Value Thous. $ 276 954 17 812
Value Produced Thous. $ 1,420 4,047 133 2,491
Total Income Thous. $ 1,575 4,567 140 2.623
Assets Plant Inventory Thous. $ 2,165 7.019 87 3,206
Supply Inventory Thous. $ 40 119 2 46
Cash & Accounts Receivable Thous. $ 239 728 6 331
Land Thous. $ .286 739 69 353
Machinery/Equipment Thous. $ 80 173 16 71
Buildings & Installations Thous. $ 208 671 6 143
Total Assets Thous. $ 3.018 9,450 185 4,151
Liabilities & Current Liabilities Thous. $ 173 484 19 237
Net Worth Long-Term Liabilities Thous. $ 894 2,782 40 898
Total Liabilities Thous. $ 1,067 3,265 58 1,135
Net Worth Thous. $ 1,951 6,184 127 3,016
Other Capital Land Leased Thous. $ 192 497 0 297
Managed Equipment Leased Thous. $ 5 12 0 15
Buildings Leased Thous. $ 13 9 0 5
Total Capital Managed Thous. $ 3,227 9,968 185 4,467
Expenses Management Thous. $ 105 263 24 85
Employee Wages & Benefits Thous $ 462 1,304 33 734
Materials Thous. $ 376 1,020 32 520
Facility/Equipment Thous. $ 78 211 8 96
Overhead Thous $ 204 593 19 235
Depreciation Thous $ 55 156 4 101
Interest Thous. $ 85 270 3 99
Total Costs Thous. $ 1,367 3,818 124 1,870
Net Returns Net Nursery Income Thous. $ 398 1,282 44 937
Return to Capital Thous. $ 293 1,019 19 852
Return on Net Worth Thous. $ 208 749 16 754
Physical Capital Managed Per FTE Thous. $ 123 139 44 95
Productivity & Capital Managed Per Acre Thous. $ 60 61 66 51
nfficoency Value Produced per FTE Thous. $ 54 57 32 53
Area Per FTE Acres 206 2.27 0.67 1.86
Value Produced Per Square Foot $ 0.60 0.57 1.08 0 66
Inventory Turnover ratio 0.53 0.44 1.34 0.52
Asset Turnover ratio 0.38 0.33 0.63 040
Total Cost per Square Foot $ 0.58 0.54 1.00 049
Cost Per $ Management % 7.4% 6.5% 18.4% 34%
Value Labor % 32.6% 32.2% 25.0% 29 5%
Produced Materials % 26.5% 25.2% 24.2% 20.9%
Facility/Equipment % 5.5% 5.2% 5.8% 3.9%
Overhead % 14.4% 14.6% 14.3% 94%
Depreciation % 3.9% 3.9% 3.3% 4.1%
Interest % 6.0% 6.7% 2.4% 4.0%
Cash Cost/Sales % 112.0% 114.7% 103.9% 105.5%
Profitability Net Margin_ % 18.6% 22.3% 13.9% 32.5%
Rate of Return to Capital % 9.7% 10.8% 10.5% 20.5%
Rate of Return on Net Worth % 10.7% 12.1% 12.8% 25.0%
Financial Quick Ratio rato 1.38 1.51 0.33 1.40
Ratios Leverage Ratio ratio 1.55 1.53 1.46 1.38








Appendix Table 3. Results for all and large Central Florida foliage nurseries, 1995.
Measure Units All Firms Large Firms
Number of Firms _Number 11 3
Physical Production Area Acres 3.59 4.05
Resources Employees FTEs 12.31 27.44
Income Own Plant Sales Thous. $ 688 1,502
Change Plant Inventory Value Thous. $ (18) (42)
Value Produced Thous. $ 670 1,460
Total Income Thous. $ 679 1,481
Assets Plant Inventory Thous. $ 331 735
Supply Inventory Thous $ 31 87
Cash & Accounts Receivable Thous. $ 158 368
Land Thous. $ 26 12
Machinery/Equipment Thous. $ 22 35
Buildings & Installations Thous. $ 62 106
Total Assets Thous. $ 630 1,343
Liabilities & Current Liabilities Thous. $ 60 134
Net Worth Long-Term Liabilities Thous. $ 96 87
Total Liabilities Thous. $ 156 222
Net Worth Thous. $ 474 1.121
Other Capital Land Leased Thous. S 64 79
Managed Equipment Leased Thous. $ 43 108
Buildings Leased Thous. $ 94 213
Total Capital Managed Thous. $ 832 1,744
Expenses Management Thous. $ 51 60
Employee Wages & Benefits Thous. $ 212 513
Materials Thous. $ 261 590
Facility/Equipment Thous. $ 37 88
Overhead Thous. 94 226
Depreciation Thous $ 18 43
Interest Thous. $ 9 13
Total Costs Thous. $ 681 1,532
Net Returns Net Nursery Income Thous. $ 58 23
Return to Capital Thous. $ 7 (37)
Return on Net Worth Thous. $ (2) (50)
Physical Capital Managed Per FTE Thous. $ 68 64
Productivity & Capital Managed Per Acre Thous. $ 232 431
Efficiency Value Produced per FTE Thous. $ 54 53
Indicators
Area Per FTE Acres 0.29 0.15
Value Produced Per Square Foot $ 4.29 8.28
Inventory Turnover ratio 2.08 2.04
Asset Turnover ratio 1.09 1.12
Total Cost per Square Foot $ 4.36 8.68
Cost Per $ Management % 7.5% 4.1%
Value Labor % 31.6% 35.1%
Produced Materials % 38.9% 404%
Facility/Equipment % 5.5% 6.0%
Overhead % 14.1% 15.4%
Depreciation % 2.7% 3.0%
Interest % 1.4% 0.9%
Cash Cost/Sales % 97.7% 101.1%
Profitability Net Margin % 1.1% -2.5%
Rate of Return to Capital % 1.2% -2.8%
Rate of Return on Net Worth % -0.4% -4.5%
Financial Quick Ratio ratio 2.65 2.74
Ratios Leverage Ratio ratio 1.33 1.20








Appendix Table 4. Results for all and large South Florida foliage nurseries, 1995.
Measure Units All Firms Large Firms
Number of Firms _Number 13 4
Physical Production Area Acres 24.81 63.94
Resources Employees FTEs 57.60 15692
Income Own Plant Sales Thous $ 2,696 7,399
Change Plant Inventory Value Thous $ 362 896
Value Produced Thous. $ 3,058 8,294
Total Income Thous. $ 3.186 8,663
Assets Plant Inventory Thous. $ 2,035 5,491
Supply Inventory Thous $ 100 302
Cash & Accounts Receivable Thous. $ 430 1,125
Land Thous. $ 378 688
Machinery/Equipment Thous. $ 317 886
Buildings & Installations Thous. $ 646 1,537
Total Assets Thous. $ 3.906 10,029
Liabilities & Current Liabilities Thous. $ 646 2,034
Net Worth Long-Term Liabilities Thous. $ 1.315 3,464
Total Liabilities Thous. $ 1,961 5,498
Net Worth Thous. $ 1,945 4.531
Other Capital Land Leased Thous. $ 165 432
Managed Equipment Leased Thous. $ 4 0
Buildings Leased Thous $ 3 4
Total Capital Managed Thous. $ 4,077 10,465
Expenses Management Thous $ 61 100
Employee Wages & Benefits Thous $ 1,053 2.974
Materials Thous. $ 977 2.718
Facility/Equipment Thous. $ 117 322
Overhead Thous. $ 593 1,714
Depreciation Thous. 139 334
interest Thous. $ 147 411
Total Costs Thous. $ 3088 8,574
Net Returns Net Nursery Income Thous. 306 600
Return to Capital Thous. $ 245 500
Retum on Net Worth Thous $ 98 89
Physical Capital Managed Per FTE Thous $ 71 67
Productivity & Capital Managed Per Acre Thous. $ 164 164
Efficency
Indicators Value Produced per FTE Thous. $ 53 53
Area Per FTE Acres 0.43 0.41
Value Produced Per Square Foot $ 2.83 2.98
Inventory Turnover ratio 1.32 1.35
Asset Turnover ratio 0.69 0.74
Total Cost per Square Foot $ 2.86 3.08
Cost Per $ Management % 2.0% 1.2%
Value Labor % 34.4% 35.9%
Produced Materials % 31.9% 32.8%

Facility/Equipment % 3.8% 3.9%
Overhead % 19.4% 20.7%
Depreciation % 4.6% 4.0%
Interest % 4.8% 5.0%
Cash Cost/Sales % 109.1% 110.3%
Profitability Net Margin % 7.7% 5.8%
Rate of Return to Capital % 6.3% 5.0%
Rate of Return on Net Worth % 5.0% 2.0%
Financial Quick Ratio ratio 0.67 0.55
Ratios Leverage Ratio ratio 2.01 2.21







Appendix Table 5. Percentage changes in results for Florida ornamental plant nurseries, 1990 to
1995. Changes were calculated as the difference between 1995 and 1990 values, divided by the
1990 value, and monetary values were adjusted for inflation according to changes in the Consumer
Price Index for 1990-95.
Container Flowering Central Florida South Florida
Measure Units All Fis Woody Omam. Plants Foliage Foliage
Physical Production Area Acres 71% 522% 244% 50% -35%
Resources Employees FTEs 72% 70% 98% -7% 74%
Income Own Plant Sales Thous, $ 45% 81% 60% 12% 17%
Change Plant Inventory Value Thous $ 140% 268% -84% -298% 102%
Value Produced Thous $ 53% 101% 51% 7% 23%
Total Income Thous. $ 65% 121% 88% 7% 27%
Assets Plant Inventory Thous. $ 126% 249% 110% 66% 66%
Supply Inventory Thous. $ 159% 106% 207% 2% 327%
Cash & Accounts Receivable Thous. $ 91% 180% 109% 54% 32%
Land Thous. $ 13% 90% -76% -56% -6%
Machinery/Equipment Thous. $ 109% 69% 60% 4% 126%
Buildings & Installations Thous. $ 169% 416% 131% -32% 139%
Total Assets Thous. $ 107% 213% 86% 25% 63%
Liabilities & Current Liabilities Thous. $ 339% 247% -18% 193% 456%
Net Worth Long-Term Liabilities Thous. $ 193% 350% -7% -44% 193%
Total Liabilities Thous. $ 221% 330% -11% -19% 247%
Net Worth Thous. $ 69% 173% 151% 52% 6%
Other Capital Land Leased Thous. $ 78% 75% 780% 997% 18%
Managed Equipment Leased Thous $ 275% 349% -93% na -39%
Buildings Leased Thous $ 130% -57% 40% na 609%
Total Capital Managed Thous. $ 106% 193% 100% 63% 61%
Expenses Management Thous. $ 25% 87% 29% -5% -34%0
Employee Wages & Benefits Thous. $ 82% 95% 132% -8% 72%
Materials Thous $ 40% 100% 67% 14% 0%
Facility/Equipment Thous. $ 66% 101% 97% 44% 22%
Overhead Thous. $ 132% 175% 87% 79% 99%
Depreciation Thous. $ 44% 112% 4% -38% 45%
Interest Thous. $ 227% 407% 91% 3% 188%
Total Costs Thous. $ 69% 114% 85% 9% 39%
Net Returns Net Nursery Income Thous. $ 52% 169% 90% -21% -27%
Return to Capital Thous. $ 63% 219% 102% -63% -26%
Return on Net Worth Thous $ 32% 177% 102% -118% -65%
Physical Capital Managed Per FTE Thous. $ 20% 72% 1% 76% -8%
Productivity & Capital Managed Per Acre Thous. $ 20% -53% -42% 8% 148%
Efficiency
Indicatorsency Value Produced per FTE Thous. $ -11% 18% -24% 16% -29%
Area Per FTE Acres 0% 265% 73% 62% -63%
Value Produced Per Square Foot $ -11% -68% -56% -28% 90%
Inventory Turnover ratio -35% -48% -24% -33% -29%
Asset Turnover ratio -30% -42% -14% -10% -28%
Total Cost per Square Foot $ -1% -66% -46% -27% 114%
Cost Per $ Management % -18% -7% -15% -12% -46%
Value Labor % 19% -3% 53% -14% 40%
Produced Materials % -8% -1% 11% 7% -19%
Facility/Equipment % 8% 0% 31% 34% -1%
Overhead % 51% 37% 24% 67% 62%
Depreciation % -6% 6% -31% -43% 18%
Interest % 114% 152% 26% -4% 134%
Cash Cost/Sales % 14% 14% 16% -2% 16%
Profitability Net Margin % -1% 45% 7% -66% -42%
Rate of Return to Capital % -21% 2% 8% -71% -54%
Rate of Return on Net Worth % -22% 2% -19% -112% -67%
Financial Quick Ratio ratio -57% -19% 154% -47% -76%
Ratios Leverage Ratio ratio 23% 15% -26% -18% 53%






Appendix Table 6. Itemized expenses as a percentage of total expenses for Florida ornamental plant
nurseries, 1995. Note: to derive dollar amounts for any item multiply by the total expense shown in Table 5.
Container Central South
Expense Expense Item All Firms Woody wearing Florida Florida
Category _Ornam. plants Foliage Foliage
Management Operator Salary 4.5% 7.6% 2.6% 7.4% 2.0%
Employee Employee Wages & Salaries 29.1% 28.9% 30.7% 25.9% 29.4%
Labor FICA 2.4% .2.2% 2.6% 2.3% 2.5%
Unemployent Tax 0.1% 0.1% 0.0% 0.2% 0.2%
Workman's Insurance 1.0% 1.4% 1.3% 0.8% 0.5%
Other Employee Expenses 1.1% 0.8% 0.9% 1.9% 1.2%
Materials Plants & Seeds 13.0% 12.2% 19.0% 20.1% 10.5%
Containers 6.0% 6.2% 6.1% 5.1% 6.0%
Heating Fuel 0.6% 0.1% 0.6% 2.7% 0.6%
Soil Media 3.4% 3.6% 4.6% 2.8% 3.0%
Fertilier & Lime 2.4% 2.6% 3.1% 1.4% 2.1%
Chemicals 2.2% 2.2% 3.0% 1.6% 2.0%
Packaging 2.9% 0.5% 5.1% 3.9% 4.1%
Other Production Supplies 2.3% 1.2% 0.9% 0.8% 3.7%
Facilities and Facility Repair & Maintenance 2.7% 2.1% 2.8% 4.3% 2.7%
Equipment Vehicle & Equipment 2.3% 3.5% 4.1% 1.2% 1.1%
Administrative Travel & Entertainment 1.1% 1.2% 0.4% 1.1% 1.2%
Overhead Insurance (property) 1.9% 1.2% 0.5% 1.5% 2.8%
Telephone 0.8% 0.9% 0.4% 1.0% 0.7%
Electric 0.5% 0.5% 0.7% 1.3% 0.4%
Taxes & Licenses 0.8% 0.7% 0.6% 0.9% 1.0%
Advertising 0.4% 0.6% 0.0% 0.4% 0.4%
Rent 1.9% 2.4% 2.5% 3.0% 0.9%
Other Expenses 8.5% 7.2% 3.5% 4.7% 11.5%
Interest Interest 4.4% 6.2% 1.4% 1.4% 4.7%
Depreciation Depreciation 3.8% 4.0% 2.7% 2.6% 4.5%









Appendix B:

Florida Nursery Business Analysis Worksheet

With information requested by this form, the University of Florida will perform an analysis of
your nursery, and provide you with a report comparing your firm with averages for similar firms in the
program during the previous year. This analysis will include efficiency indicators for use of land (space),
labor, and capital, costs of production, net income, financial position, and profitability. Your nursery
information will be kept strictly confidential, but will be used anonymously for compilation of industry
averages.



General Instructions

The data submitted should be for the most recently completed accounting year. In order to
perform a correct analysis, information must be provided for all sections of the worksheet. Or, you may
submit a financial statement, and fill-in only those sections not covered by the statement (sections 4, 5,
and 7, and possibly part of section 2). You may also authorize an accountant to fill-out the form for
you.

When completed, return this worksheet to:
Loretta N. Satterthwaite, Statistician
University of Florida, Central Florida Research and Education Center
2807 Binion Road, Apopka, FL 32703-8504
tel 407-884-2034 fax 352-392-9359


1 General Information


Nursery Name


Owner/Contact Person
Location/Street Address


Zip


Type of Nursery (check most appropriate choice):


Today's Date


Fiscal Year
Month Ended


Telephone ( )
County


tropical foliage
container-grown woody ornamentals
field-grown woody ornamentals
potted flowering plant
cut flowers


worksheet revised 5'29'92


Today's Date







2 Income

A Total Plant Sales ........................................ $-----
By Month or Quarter:

Jan $ Apr $ Jul $ Oct $
Feb $ May Aug S Nov $
Mar $ Jun $ Sep s Dec

Qtr $ Qtr $ Otr $ Qtr $

B. Value of plants resold (brokered) for other firms3 .................. $--- -----. .
C. Miscellaneous Income ..................................... $-----




3 Fiscal Year Information


Beginning Balance

A. Value of Supplies in Inventory .............. $-- -------
B. Value of Plants in Inventory4 ............... $ 8$
C. Original Cost of Land Owned .............. $--
D. Accounts Receivable and other Current Assets $
E. Cash on Hand ......................... $-
F. Accounts Payable and other Current Liabilities $
G. Long Term Debt ........................ $


Ending Balance
$.
$
$.
$.
$.
$.
$
$----------


$_________


4 Value of Leased Property6

Beginning Balance Ending Balance

A. Value of Land Leased ................... $--- $-----$
B. Value of Machinery & Equipment Leased ...... $--- --- $. ---
C. Value of Buildings/Installations Leased ......... $---.-- $------


3 This amount will be deducted from total plant sales to give net nursery-produced sales.

4 Plant inventory valued at wholesale price, adjusted for percentage of completion. For example, if nursery has even turnover,
inventory averages 50% finished, so inventory value would be the wholesale price discounted 50%.

6 Debt due beyond the current fiscal year, including mortgages and notes payable. Debt to officers in closely held (family)
corporations (which is more like a capital investment by the owners than a debt) normally is not included.

6 Leased assets valued at current market value. Assets leased to closely held (family) corporation by stockholders may be treated,
at the participant's option, either as leased capital (this section), or as owned capital (sections 3 and 6).

24








5 Production Area

Enter square footage in use at beginning and end of fiscal year for:

Beginning of Year End of Year

A. Total nursery area7 .....................

B. Total bed and/or bench space8 .............

C. Stock plant space ...................... ..


E. Average vacant space9




6 Capital Assets and Depreciation'1

Original Cost Accumulated Depreciation
Depreciation this year

A. Machinery & Equipment"1 .. $

B. Buildings & Installations12 ...... $_ $ $

Total ...................... $____ $ $




7 Work Time"1

Total Full-time
Payroll Hours Or Equivalents

A. Hourly w workers ........................

B. Non-hourly workers .....................

Total .................................



7 All area used for nursery, including roads, offices, packing sheds and parking, as well as growing areas.

8 Net growing area, excluding driveways, walkways and other non-productive space. Use the facing page as a workspace for listing
if needed.

9 Vacant space representative of slack periods during year, and vacancy between removal and restocking of plants. For example,
if average turnaround time is two weeks, this represents 3.9% vacant (2/52 weeks = .039). Growing area multiplied by average
percent vacancy equals average square feet vacant.

'0 A depreciation schedule or detailed balance sheet may be submitted in lieu of filling out this section. Use separate sheet to list
items if needed.

Equipment used specifically for nursery operations. If unsure about proper category for any item, please list on facing page.

12 Includes wells, fences, paving, office furniture and office equipment, as well as buildings.

13 Enter total hours for all workers, including casual labor, partime labor, piece-work laborers, clerical salespersons, family
members, and managerss. For non-hourly workers or in cases where records are not available, time may be estimated in terms of full-
time equivalents (2,080 hours/year; 52 weeks @ 40 hours/week).








8 Expenses"1

A. Operator's salary or time value15 ....................

B. Employees salaries, wages, payroll taxes, and benefits . .
$ $---- $-4-
production wages salaries sales commissions
$____ $__ $--____
FICA unemp. taxes workman's ins.

C. Plants & seeds for growing ........................

D. Grow ing containers .............................

E. Fuel for production heat ..........................

F. Growing media (potting soil, peat, sand, bark) ..........

G Fertilizer & lim e ................................

H. Pesticides, herbicides & other chemicals ..............

I. Packing & shipping supplies ........................

J. Other production supplies (stakes, ties, plastic, burlap, small t

K. Facility repairs & maintenance ......................

L. Vehicle & equipment operating costs .................

M. Travel, trade shows & entertainment .................

N. Insurance (property & liability, not employee related) ......

O. Communications (telephone, telegraph, fax, radio) ........

P. Electric pow er .................................

Q. Taxes (property, not sales), licenses, bonds ............

R. Advertising ...................................

S. Rent (land & buildings) ...........................

T Interest ... .. .. .. ... .. ... .. ... ... ... ...

U. Other (itemize below if available) ....................


bank charges .......

dues & subscriptions .

freight ...........

miscellaneous ......


$----

$----

$

$


........ $_______

. . $ -
$

health insurance


other


ools) ....


postage ...........

professional services .

office supplies ......

waste removal ......


$

$

$

$

$

$

$

$

$

$.

$

$.

$
$.

$

$.

$.

$
$--------

























$
.$A__



$A ___
.$______
S$_______

S$________

S$_______

$____

$____


14 A detailed statement of expenses may be submitted in lieu of filling-out this section.

'" This should reflect total value of compensation to owners) and/or managerss. In cases where a real salary was not paid, an
expected compensation should be estimated, based upon the owner(s)/manager(s) experience.

26