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 Copyright
 Front Cover
 Title Page
 Abstract
 Acknowledgments
 Table of Contents
 List of Tables
 List of Figures
 Introduction
 Procedures
 Results
 Reference
 Florida cut foliage business analysis...


FLAG IFAS PALMM UF



Analysis of cut foliage businesses in Florida
ALL VOLUMES CITATION SEARCH THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
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Permanent Link: http://ufdc.ufl.edu/UF00027609/00001
 Material Information
Title: Analysis of cut foliage businesses in Florida
Series Title: Economic information report - Food & Resource Economics Department - EI 98-2
Physical Description: 19 p. : ill. ; 28 cm.
Language: English
Creator: Hodges, Alan W. (Alan Wade), 1959-
Satterthwaite, Loretta N.
Haydu, John J.
Affiliation: University of Florida -- Food & Resource Economics Department -- Institute of Food & Agricultural Sciences
Publisher: Food & Resource Economics Dept., Agricultural Experiment Stations and Cooperative Extension Service, Institute of Food & Agricultural Sciences, University of Florida
Creation Date: 1996
 Subjects
Subjects / Keywords: Agriculture   ( lcsh )
Farm life   ( lcsh )
Farming   ( lcsh )
University of Florida.   ( lcsh )
Agriculture -- Florida   ( lcsh )
Farm life -- Florida   ( lcsh )
Cut foliage industry -- Florida   ( lcsh )
Foliage plant industry -- Florida   ( lcsh )
Genre: serial   ( sobekcm )
Spatial Coverage: North America -- United States of America -- Florida
 Notes
Funding: Florida Historical Agriculture and Rural Life
 Record Information
Source Institution: Marston Science Library, George A. Smathers Libraries, University of Florida
Holding Location: Florida Agricultural Experiment Station, Florida Cooperative Extension Service, Florida Department of Agriculture and Consumer Services, and the Engineering and Industrial Experiment Station; Institute for Food and Agricultural Services (IFAS), University of Florida
Rights Management: All rights reserved, Board of Trustees of the University of Florida
Resource Identifier: oclc - 39521893
notis - ALW9793
aleph - 002365164
System ID: UF00027609:00001

Table of Contents
    Copyright
        Copyright
    Front Cover
        Front Cover
    Title Page
        Page i
    Abstract
        Page ii
    Acknowledgments
        Page ii
    Table of Contents
        Page iii
    List of Tables
        Page iv
    List of Figures
        Page iv
    Introduction
        Page 1
        The cut foliage industry
            Page 1
        The University of Florida business analysis program
            Page 1
    Procedures
        Page 2
        Information collected and reported
            Page 2
        Accounting and measurement conventions
            Page 2
        Industry groups analyzed
            Page 3
    Results
        Page 4
        Income and value produced
            Page 4
            Annual sales
                Page 4
            Plant inventory change and total value produced
                Page 4
            Total income
                Page 4
            Monthly sales
                Page 4
                Page 5
        Resource use, productivity, efficiency and intensity indicators
            Page 6
            Land
                Page 6
            Labor
                Page 6
            Capital managed
                Page 6
            Value produced per acre
                Page 6
            Capital managed per acre
                Page 7
            Sales and value produced per worker
                Page 7
            Growing area managed per worker
                Page 7
            Capital managed per worker
                Page 7
            Capital managed per acre
                Page 7
        Expenses and cost efficiency
            Page 8
            Employee expenses
                Page 8
            Materials expenses
                Page 8
            Facility and equipment expenses
                Page 8
            Administrative overhead expenses
                Page 8
            Capital costs
                Page 8
            Management/owner compensation
                Page 8
            Total costs
                Page 8
                Page 9
            Cost per acre
                Page 10
            Cost as a share of sales
                Page 10
                Page 11
        Net returns and profitability
            Page 12
            Net income
                Page 12
            Net margin
                Page 12
            Return on assets
                Page 12
            Return on net worth
                Page 12
        Balance sheet and financial ratios
            Page 13
            Assets
                Page 13
            Liabilities
                Page 13
            Net worth
                Page 13
            Leverage
                Page 14
            Quick ratio
                Page 14
    Reference
        Page 15
    Florida cut foliage business analysis worksheet
        Page 16
        Page 17
        Page 18
        Page 19
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





c

A.W. Hodges
L. N. Satterthwaite
J. J. Haydu


Economic Information
Report 98-2


Marst-nn c-9,


JUL 1 5 1998
University of Hornda


Analysis of Cut Foliage
Businesses In Florida, 1996


0 UNIVERSITY OF
FLORIDA
Institute of Food and Agricultural Sciences
Food and Resource Economics Department
Cooperative Extension Service
Gainesville, FL 32611


June 1998













Analysis


of Cut Foliage Businesses
in Florida. 1996


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

Economic Information Report EIR 98-2













Food & Resource Economics Department
Agricultural Experiment Stations and
Cooperative Extension Service
Institute of Food & Agricultural Sciences
University of Florida, Gainesville 32611 June 1998









ANALYSIS OF CUT FOLIAGE BUSINESSES IN FLORIDA, 1996

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


ABSTRACT

Information is presented on sales, production, costs, assets and liabilities, and efficiency
indicators for 17 cut foliage businesses in Florida for the year of 1996. The average firm had
annual sales of $1.14 million (M), including $650 thousand (K) for own-produced plants and
$494K in brokered product, total income of $1.18M, net income of $127K, used production
area of 50 acres, and employed 30 fulltime equivalent (FTE) persons. Total assets -
including plant inventory, land, equipment, buildings, supplies, cash on hand, and accounts
receivable averaged $1.15M, while total liabilities were $456K. Value produced per acre
of growing area averaged $13K and total sales per FTE of labor was $38K. Total capital
managed per FTE and per acre of growing space averaged $46K and $28K, respectively.
Managed capital turnover was 0.82. Costs as a share of total sales averaged 6.1% for
management/owners, 35.9% for employee labor, 13.7% for materials, 23.1% for finished
products brokered, 4.2% for equipment/facilities, 8.3% for administrative overhead and 6.9%
for capital. Net profit margin averaged 10.8%, rate of return on assets was 11.1%, and
return on net worth was 18.4%. Similar information is presented for large-, medium- and
small-sized firms, and highly profitable firms.

KEY WORDS: cut foliage, fernery, ornamental plant products, business analysis, sales,
costs, returns, efficiency, Florida.


ACKNOWLEDGMENTS

This report was made possible by the owners and managers of cooperating firms who made
their records available on a confidential basis for analysis and averaging. Assistance was
provided by University of Florida Extension Ornamental Horticulture Agents Linda Landrum,
Diane Dilger and Austin Tilton, Cut Foliage Extension Specialist Dr. Robert Stamps and
industry representative Mitch Donaldson. Data collection and analysis was underwritten, in
part, by Farm Credit of DeLand, FL.









ANALYSIS OF CUT FOLIAGE BUSINESSES IN FLORIDA, 1996

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


ABSTRACT

Information is presented on sales, production, costs, assets and liabilities, and efficiency
indicators for 17 cut foliage businesses in Florida for the year of 1996. The average firm had
annual sales of $1.14 million (M), including $650 thousand (K) for own-produced plants and
$494K in brokered product, total income of $1.18M, net income of $127K, used production
area of 50 acres, and employed 30 fulltime equivalent (FTE) persons. Total assets -
including plant inventory, land, equipment, buildings, supplies, cash on hand, and accounts
receivable averaged $1.15M, while total liabilities were $456K. Value produced per acre
of growing area averaged $13K and total sales per FTE of labor was $38K. Total capital
managed per FTE and per acre of growing space averaged $46K and $28K, respectively.
Managed capital turnover was 0.82. Costs as a share of total sales averaged 6.1% for
management/owners, 35.9% for employee labor, 13.7% for materials, 23.1% for finished
products brokered, 4.2% for equipment/facilities, 8.3% for administrative overhead and 6.9%
for capital. Net profit margin averaged 10.8%, rate of return on assets was 11.1%, and
return on net worth was 18.4%. Similar information is presented for large-, medium- and
small-sized firms, and highly profitable firms.

KEY WORDS: cut foliage, fernery, ornamental plant products, business analysis, sales,
costs, returns, efficiency, Florida.


ACKNOWLEDGMENTS

This report was made possible by the owners and managers of cooperating firms who made
their records available on a confidential basis for analysis and averaging. Assistance was
provided by University of Florida Extension Ornamental Horticulture Agents Linda Landrum,
Diane Dilger and Austin Tilton, Cut Foliage Extension Specialist Dr. Robert Stamps and
industry representative Mitch Donaldson. Data collection and analysis was underwritten, in
part, by Farm Credit of DeLand, FL.










TABLE OF CONTENTS
Page

ABSTRACT ............................................................ ii

ACKNOWLEDGMENTS .................................................... ii

INTRODUCTION ......................... .............................. 1
The Cut Foliage Industry ............................................. 1
The University of Florida Business Analysis Program ........................ 1

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

RESULTS ........................................... .................... 4
Income and Value Produced ............................................ 4
Annual Sales ................ ................................ 4
Plant Inventory Change and Total Value Produced .................... 4
Total Income ................................................. 4
Monthly Sales ............................................... 4
Resource Use, Productivity, Efficiency and Intensity Indicators ................ 6
Land .................................................... 6
Labor ...................................................... 6
Capital Managed .............................................. 6
Value Produced per Acre ................ ....................... 6
Capital Managed per Acre ....................................... 7
Sales and Value Produced per Worker ............................ 7
Growing Area Managed per Worker .............................. 7
Capital Managed per Worker .................................... 7
Managed Capital Turnover ....................................... 7
Expenses and Cost Efficiency .......................................... 8
Employee Expenses ........................................... 8
Materials Expenses ............................................ 8
Facility and Equipment Expenses ................. .............. 8
Administrative Overhead Expenses .............................. 8
Capital Costs ............................................... 8
Management/Owner Compensation .............................. 8
Total Costs .................................................. 8
CostperAcre ............................................ 10
Cost As a Share of Sales ................ ..................... 10
Net Returns and Profitability .......................................... 12
Net Income ................................................. 12
Net Margin .................................................. 12
Return on Assets ............................................. 12
Return on Net Worth ........................................... 12










TABLE OF CONTENTS (continued)


Balance Sheet and Financial Ratios..................................... 13
Assets .................................................. 13
Liabilities ................................................ 13
Net Worth ................................................ 13
Leverage ................................................ 14
Quick Ratio ............................................... 14

REFERENCES ...................................................... 15

APPENDIX: Florida Cut Foliage Business Analysis Worksheet .................... 16



LIST OF TABLES

Table Page

Table 1. Florida cut foliage firms sampled and analyzed, 1996. ..................... 2
Table 2. Income and value produced for Florida cut foliage businesses, 1996. ......... 4
Table 3. Productive resources used by Florida cut foliage businesses, 1996. .......... 6
Table 4. Resource productivity, efficiency and use intensity indicators for Florida cut foliage
businesses, 1996 ............................................. ...... 7 7
Table 5. Operating expenses for Florida cut foliage businesses, 1996 ................ 9
Table 6. Cost efficiency indicators for Florida cut foliage businesses, 1996............ 11
Table 7. Net returns and profitability for Florida cut foliage businesses, 1996 ......... 12
Table 8. Assets, liabilities and net worth for Florida cut foliage businesses, 1996 ...... 13
Table 9. Financial ratios for Florida cut foliage businesses, 1996. .................. 14


LIST OF FIGURES

Figure Page

Figure 1. Sales of cut foliage by United States and Florida growers, 1985-96. ......... 3
Figure 2. Monthly sales for Florida cut foliage businesses, 1996 ..................... 5
Figure 3. Expenses for Florida cut foliage businesses, 1996 ....................... 10










TABLE OF CONTENTS (continued)


Balance Sheet and Financial Ratios..................................... 13
Assets .................................................. 13
Liabilities ................................................ 13
Net Worth ................................................ 13
Leverage ................................................ 14
Quick Ratio ............................................... 14

REFERENCES ...................................................... 15

APPENDIX: Florida Cut Foliage Business Analysis Worksheet .................... 16



LIST OF TABLES

Table Page

Table 1. Florida cut foliage firms sampled and analyzed, 1996. ..................... 2
Table 2. Income and value produced for Florida cut foliage businesses, 1996. ......... 4
Table 3. Productive resources used by Florida cut foliage businesses, 1996. .......... 6
Table 4. Resource productivity, efficiency and use intensity indicators for Florida cut foliage
businesses, 1996 ............................................. ...... 7 7
Table 5. Operating expenses for Florida cut foliage businesses, 1996 ................ 9
Table 6. Cost efficiency indicators for Florida cut foliage businesses, 1996............ 11
Table 7. Net returns and profitability for Florida cut foliage businesses, 1996 ......... 12
Table 8. Assets, liabilities and net worth for Florida cut foliage businesses, 1996 ...... 13
Table 9. Financial ratios for Florida cut foliage businesses, 1996. .................. 14


LIST OF FIGURES

Figure Page

Figure 1. Sales of cut foliage by United States and Florida growers, 1985-96. ......... 3
Figure 2. Monthly sales for Florida cut foliage businesses, 1996 ..................... 5
Figure 3. Expenses for Florida cut foliage businesses, 1996 ....................... 10








ANALYSIS OF CUT FOLIAGE BUSINESSES IN FLORIDA, 1996
Alan W. Hodges1, Loretta N. Satterthwaite2 and John J. Haydu


INTRODUCTION

The Cut Foliage Industry

The state of Florida is the largest producer of cultivated ornamental cut foliage products in
the U.S., with total farmgate sales in 1996 of $97.0 million, from 274 wholesale producers
and 7,495 acres in production (NASS, 1997). Leatherleaf fern (Rumohra adiantiformis) is the
most important cut foliage product in Florida, accounting for 69 percent of all cut foliage sales
and 63 percent of production area. Many other cut foliage crops are produced in Florida,
including several species of ornamental asparagus (Asparagus spp.), Japanese pittosporum
(Pittosporum tobira), English ivy (Hedera helix) and aspidistra (Aspidistra elatior) (Stamps
and Conover, 1986).

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. Sales of cut foliage by growers in
Florida and other states over the period 1985-96 are shown in Figure 1. 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).

Actual operating costs and returns for fernery production have not been published, however,
a budgeting approach was used by Smith, Taylor and Loadholtz (1988) to estimate total
annual production and marketing costs for Florida producers at $15,658 per acre or $.75 per
bunch of 25 fronds, based on an average yield of 20,800 bunches per acre.

The University of Florida Business Analysis Program

Information in this report was collected as part of the University of Florida's ongoing Business
Analysis and Planning Program for the state's horticultural industries. Since the 1960s, this
program has gathered and analyzed confidential production and accounting records from
wholesale nurseries in Florida to compile industry average performance benchmarks, most
recently reported by Hodges et al. (1997). In 1997, the business analysis program was
extended to include the cut foliage industry for the first time. Firms that participated in this
program, which was on a strictly voluntary basis, received a report with information similar to
that presented in this paper.



1 Coordinator of Economic Analysis, University of Florida, Food & Resource Economics Department, PO Box
110240, Gainesville FL 32611, tel (352) 392-1881 x312, fax (352) 392-9898, email awh@gnv.ifas.ufl.edu.
2 Senior Statistician and Extension Economist, respectively, University of Florida, Central Florida Research and
Education Center, Apopka, FL tel (407) 884-2034.








ANALYSIS OF CUT FOLIAGE BUSINESSES IN FLORIDA, 1996
Alan W. Hodges1, Loretta N. Satterthwaite2 and John J. Haydu


INTRODUCTION

The Cut Foliage Industry

The state of Florida is the largest producer of cultivated ornamental cut foliage products in
the U.S., with total farmgate sales in 1996 of $97.0 million, from 274 wholesale producers
and 7,495 acres in production (NASS, 1997). Leatherleaf fern (Rumohra adiantiformis) is the
most important cut foliage product in Florida, accounting for 69 percent of all cut foliage sales
and 63 percent of production area. Many other cut foliage crops are produced in Florida,
including several species of ornamental asparagus (Asparagus spp.), Japanese pittosporum
(Pittosporum tobira), English ivy (Hedera helix) and aspidistra (Aspidistra elatior) (Stamps
and Conover, 1986).

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. Sales of cut foliage by growers in
Florida and other states over the period 1985-96 are shown in Figure 1. 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).

Actual operating costs and returns for fernery production have not been published, however,
a budgeting approach was used by Smith, Taylor and Loadholtz (1988) to estimate total
annual production and marketing costs for Florida producers at $15,658 per acre or $.75 per
bunch of 25 fronds, based on an average yield of 20,800 bunches per acre.

The University of Florida Business Analysis Program

Information in this report was collected as part of the University of Florida's ongoing Business
Analysis and Planning Program for the state's horticultural industries. Since the 1960s, this
program has gathered and analyzed confidential production and accounting records from
wholesale nurseries in Florida to compile industry average performance benchmarks, most
recently reported by Hodges et al. (1997). In 1997, the business analysis program was
extended to include the cut foliage industry for the first time. Firms that participated in this
program, which was on a strictly voluntary basis, received a report with information similar to
that presented in this paper.



1 Coordinator of Economic Analysis, University of Florida, Food & Resource Economics Department, PO Box
110240, Gainesville FL 32611, tel (352) 392-1881 x312, fax (352) 392-9898, email awh@gnv.ifas.ufl.edu.
2 Senior Statistician and Extension Economist, respectively, University of Florida, Central Florida Research and
Education Center, Apopka, FL tel (407) 884-2034.








ANALYSIS OF CUT FOLIAGE BUSINESSES IN FLORIDA, 1996
Alan W. Hodges1, Loretta N. Satterthwaite2 and John J. Haydu


INTRODUCTION

The Cut Foliage Industry

The state of Florida is the largest producer of cultivated ornamental cut foliage products in
the U.S., with total farmgate sales in 1996 of $97.0 million, from 274 wholesale producers
and 7,495 acres in production (NASS, 1997). Leatherleaf fern (Rumohra adiantiformis) is the
most important cut foliage product in Florida, accounting for 69 percent of all cut foliage sales
and 63 percent of production area. Many other cut foliage crops are produced in Florida,
including several species of ornamental asparagus (Asparagus spp.), Japanese pittosporum
(Pittosporum tobira), English ivy (Hedera helix) and aspidistra (Aspidistra elatior) (Stamps
and Conover, 1986).

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. Sales of cut foliage by growers in
Florida and other states over the period 1985-96 are shown in Figure 1. 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).

Actual operating costs and returns for fernery production have not been published, however,
a budgeting approach was used by Smith, Taylor and Loadholtz (1988) to estimate total
annual production and marketing costs for Florida producers at $15,658 per acre or $.75 per
bunch of 25 fronds, based on an average yield of 20,800 bunches per acre.

The University of Florida Business Analysis Program

Information in this report was collected as part of the University of Florida's ongoing Business
Analysis and Planning Program for the state's horticultural industries. Since the 1960s, this
program has gathered and analyzed confidential production and accounting records from
wholesale nurseries in Florida to compile industry average performance benchmarks, most
recently reported by Hodges et al. (1997). In 1997, the business analysis program was
extended to include the cut foliage industry for the first time. Firms that participated in this
program, which was on a strictly voluntary basis, received a report with information similar to
that presented in this paper.



1 Coordinator of Economic Analysis, University of Florida, Food & Resource Economics Department, PO Box
110240, Gainesville FL 32611, tel (352) 392-1881 x312, fax (352) 392-9898, email awh@gnv.ifas.ufl.edu.
2 Senior Statistician and Extension Economist, respectively, University of Florida, Central Florida Research and
Education Center, Apopka, FL tel (407) 884-2034.











$130

$120

$110

$100

$90

$80

$70

$60


U.S. (36 states)


Florida


Figure 1. Sales of cut foliage by United States and Florida growers, 1985-96.



PROCEDURES

Information Collected and Reported. Information for this report was collected from 17
wholesale cut foliage firms in Florida for the 1996 fiscal year. Firms were located in Volusia,
Lake and Putnam counties. Information gathered included monthly sales, other income,
expenses itemized in 26 categories, assets and liabilities, inventory values, value of leased
property, production area, and labor hours or number of fulltime persons employed.
Information was gathered through personal interviews with management, from company
financial statements or income tax forms, and other production records, and then transcribed
to a standard worksheet (see Appendix) 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 production or financial
values.

Accounting and Measurement Conventions. A number of accounting conventions were
adopted for this analysis in order to standardize the collection of information from different
firms. Because most of these firms operate under a cash-based accounting system, sales


85 86 87 88 89 90 91 92 93 94 95 96
Year











$130

$120

$110

$100

$90

$80

$70

$60


U.S. (36 states)


Florida


Figure 1. Sales of cut foliage by United States and Florida growers, 1985-96.



PROCEDURES

Information Collected and Reported. Information for this report was collected from 17
wholesale cut foliage firms in Florida for the 1996 fiscal year. Firms were located in Volusia,
Lake and Putnam counties. Information gathered included monthly sales, other income,
expenses itemized in 26 categories, assets and liabilities, inventory values, value of leased
property, production area, and labor hours or number of fulltime persons employed.
Information was gathered through personal interviews with management, from company
financial statements or income tax forms, and other production records, and then transcribed
to a standard worksheet (see Appendix) 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 production or financial
values.

Accounting and Measurement Conventions. A number of accounting conventions were
adopted for this analysis in order to standardize the collection of information from different
firms. Because most of these firms operate under a cash-based accounting system, sales


85 86 87 88 89 90 91 92 93 94 95 96
Year











$130

$120

$110

$100

$90

$80

$70

$60


U.S. (36 states)


Florida


Figure 1. Sales of cut foliage by United States and Florida growers, 1985-96.



PROCEDURES

Information Collected and Reported. Information for this report was collected from 17
wholesale cut foliage firms in Florida for the 1996 fiscal year. Firms were located in Volusia,
Lake and Putnam counties. Information gathered included monthly sales, other income,
expenses itemized in 26 categories, assets and liabilities, inventory values, value of leased
property, production area, and labor hours or number of fulltime persons employed.
Information was gathered through personal interviews with management, from company
financial statements or income tax forms, and other production records, and then transcribed
to a standard worksheet (see Appendix) 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 production or financial
values.

Accounting and Measurement Conventions. A number of accounting conventions were
adopted for this analysis in order to standardize the collection of information from different
firms. Because most of these firms operate under a cash-based accounting system, sales


85 86 87 88 89 90 91 92 93 94 95 96
Year









and expenses reflect collections and disbursements made during the period, respectively.
Sales of finished products purchased from other firms or "brokered" were deducted from total
sales to give own-product sales. All assets and liabilities were evaluated to represent a mid-
year position by averaging the beginning and ending values for the period (Jan. 1, Dec. 31).
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. Depreciation expenses on fixed assets were
taken from company depreciation schedules, which were computed according to the IRS
Accelerated Cost Recovery System (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. Product 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. In addition to
book values or computed field values for inventories, plant inventories included an additional
25 percent of annual sales to adjust for the value of the established crop beds, which take 9
months to 1 year to begin producing and 2 to 3 years to reach full production. 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. For firms that did not have current records available on their growing area,
the net usable growing space was estimated at 70 percent of the overall production area.

Industry Groups Analyzed. An attempt was made to gather a representative sample of the
industry by collecting information from roughly equal numbers of firms in the following three
ac;-eage size classes for total farm area: less than 50 acres, 50 to 99 acres, and 100 or more
acres. The sample is believed to represent firms with above-average management quality,
by virtue of their willingness to participate in quality improvement programs such as this.
Records were compiled and separately analyzed for three different groups of firms based
upon total income, as summarized in Table 1: large firms were defined as having total
annual sales of $1 million or greater; medium firms had sales of $500 to less than $1 million;
and small firms had sales of less than $500 thousand. A subgroup of the 17 firms analyzed,
designated as 'highly profitable' in the results, had a rate of return on net worth of at least 15
percent; there were five (5) firms in this subgroup and all size categories were represented.


Table 1. Florida cut foliage firms sampled, 1996.


Group Definition Number Firms
Large Sales of $1,000,000 or greater 6
Medium Sales of $500,000 to $999,999 5
Small Sales less than $500,000 6
Total 17









RESULTS

Income and Value Produced

Annual Sales. Total annual sales averaged $1.14 million (M) for all firms and ranged from
$2.40M for large firms to $293 thousand (K) for small firms, as shown in Table 2. Sales of
own products grown by firms averaged $650K or 57% of total sales, while sales of finished
products purchased for immediate resale ("brokered") were $494K or 43% of total sales.
Large and highly profitable firms had a somewhat higher percentage of brokered sales, while
medium and small firms had a lower percentage.


Table 2. Income and value produced for Florida cut foliage businesses, 1996. All
values in thousands dollars.

All Firms Large Firms Medium Firms Small Firms Highly Profitable
IncomeNalue Measure
Average Average Average Average Firms Average
Own Produced Product Sales 650 1,223 498 204 810
Brokered Product Sales 494 1,178 157 90 1,054
Total Annual Sales 1,144 2,401 655 294 1,864
Change in Plant Inventory Value 8 11 1 10 6
Total Value of Production 658 1,234 499 214 816
Total Income 1,181 2,464 691 306 1,920


Plant Inventory Change and Total Value Produced. Changes in plant inventory values
during 1996 (Jan. 1 to Dec. 31) were positive for all industry groups and averaged $7.6K for
all firms. Total value produced, a measure of productive effort calculated as the sum of own
plant sales and change in plant inventory value, averaged $658K for all firms and ranged
from $1.23M for large firms to $214K for small firms.

Total Income. Total income was the sum of plant sales, changes in plant inventory values,
and miscellaneous income from interest on accounts, rents, and other charges. It averaged
$1.18M for all firms and ranged from $2.46M for large firms to $306K for small firms.

Monthly Sales. The distribution of monthly sales is shown in Figure 2. Sales peaked during
the spring months of March, April, May, followed by declining summertime sales, then a
smaller second peak in October. Overall, nearly 31% of annual sales occurred during the
peak 3-month period. Large firms had markedly greater seasonal sales. Presumably this
pattern is related to the market for holiday floral crops during this period.









RESULTS

Income and Value Produced

Annual Sales. Total annual sales averaged $1.14 million (M) for all firms and ranged from
$2.40M for large firms to $293 thousand (K) for small firms, as shown in Table 2. Sales of
own products grown by firms averaged $650K or 57% of total sales, while sales of finished
products purchased for immediate resale ("brokered") were $494K or 43% of total sales.
Large and highly profitable firms had a somewhat higher percentage of brokered sales, while
medium and small firms had a lower percentage.


Table 2. Income and value produced for Florida cut foliage businesses, 1996. All
values in thousands dollars.

All Firms Large Firms Medium Firms Small Firms Highly Profitable
IncomeNalue Measure
Average Average Average Average Firms Average
Own Produced Product Sales 650 1,223 498 204 810
Brokered Product Sales 494 1,178 157 90 1,054
Total Annual Sales 1,144 2,401 655 294 1,864
Change in Plant Inventory Value 8 11 1 10 6
Total Value of Production 658 1,234 499 214 816
Total Income 1,181 2,464 691 306 1,920


Plant Inventory Change and Total Value Produced. Changes in plant inventory values
during 1996 (Jan. 1 to Dec. 31) were positive for all industry groups and averaged $7.6K for
all firms. Total value produced, a measure of productive effort calculated as the sum of own
plant sales and change in plant inventory value, averaged $658K for all firms and ranged
from $1.23M for large firms to $214K for small firms.

Total Income. Total income was the sum of plant sales, changes in plant inventory values,
and miscellaneous income from interest on accounts, rents, and other charges. It averaged
$1.18M for all firms and ranged from $2.46M for large firms to $306K for small firms.

Monthly Sales. The distribution of monthly sales is shown in Figure 2. Sales peaked during
the spring months of March, April, May, followed by declining summertime sales, then a
smaller second peak in October. Overall, nearly 31% of annual sales occurred during the
peak 3-month period. Large firms had markedly greater seasonal sales. Presumably this
pattern is related to the market for holiday floral crops during this period.









RESULTS

Income and Value Produced

Annual Sales. Total annual sales averaged $1.14 million (M) for all firms and ranged from
$2.40M for large firms to $293 thousand (K) for small firms, as shown in Table 2. Sales of
own products grown by firms averaged $650K or 57% of total sales, while sales of finished
products purchased for immediate resale ("brokered") were $494K or 43% of total sales.
Large and highly profitable firms had a somewhat higher percentage of brokered sales, while
medium and small firms had a lower percentage.


Table 2. Income and value produced for Florida cut foliage businesses, 1996. All
values in thousands dollars.

All Firms Large Firms Medium Firms Small Firms Highly Profitable
IncomeNalue Measure
Average Average Average Average Firms Average
Own Produced Product Sales 650 1,223 498 204 810
Brokered Product Sales 494 1,178 157 90 1,054
Total Annual Sales 1,144 2,401 655 294 1,864
Change in Plant Inventory Value 8 11 1 10 6
Total Value of Production 658 1,234 499 214 816
Total Income 1,181 2,464 691 306 1,920


Plant Inventory Change and Total Value Produced. Changes in plant inventory values
during 1996 (Jan. 1 to Dec. 31) were positive for all industry groups and averaged $7.6K for
all firms. Total value produced, a measure of productive effort calculated as the sum of own
plant sales and change in plant inventory value, averaged $658K for all firms and ranged
from $1.23M for large firms to $214K for small firms.

Total Income. Total income was the sum of plant sales, changes in plant inventory values,
and miscellaneous income from interest on accounts, rents, and other charges. It averaged
$1.18M for all firms and ranged from $2.46M for large firms to $306K for small firms.

Monthly Sales. The distribution of monthly sales is shown in Figure 2. Sales peaked during
the spring months of March, April, May, followed by declining summertime sales, then a
smaller second peak in October. Overall, nearly 31% of annual sales occurred during the
peak 3-month period. Large firms had markedly greater seasonal sales. Presumably this
pattern is related to the market for holiday floral crops during this period.









RESULTS

Income and Value Produced

Annual Sales. Total annual sales averaged $1.14 million (M) for all firms and ranged from
$2.40M for large firms to $293 thousand (K) for small firms, as shown in Table 2. Sales of
own products grown by firms averaged $650K or 57% of total sales, while sales of finished
products purchased for immediate resale ("brokered") were $494K or 43% of total sales.
Large and highly profitable firms had a somewhat higher percentage of brokered sales, while
medium and small firms had a lower percentage.


Table 2. Income and value produced for Florida cut foliage businesses, 1996. All
values in thousands dollars.

All Firms Large Firms Medium Firms Small Firms Highly Profitable
IncomeNalue Measure
Average Average Average Average Firms Average
Own Produced Product Sales 650 1,223 498 204 810
Brokered Product Sales 494 1,178 157 90 1,054
Total Annual Sales 1,144 2,401 655 294 1,864
Change in Plant Inventory Value 8 11 1 10 6
Total Value of Production 658 1,234 499 214 816
Total Income 1,181 2,464 691 306 1,920


Plant Inventory Change and Total Value Produced. Changes in plant inventory values
during 1996 (Jan. 1 to Dec. 31) were positive for all industry groups and averaged $7.6K for
all firms. Total value produced, a measure of productive effort calculated as the sum of own
plant sales and change in plant inventory value, averaged $658K for all firms and ranged
from $1.23M for large firms to $214K for small firms.

Total Income. Total income was the sum of plant sales, changes in plant inventory values,
and miscellaneous income from interest on accounts, rents, and other charges. It averaged
$1.18M for all firms and ranged from $2.46M for large firms to $306K for small firms.

Monthly Sales. The distribution of monthly sales is shown in Figure 2. Sales peaked during
the spring months of March, April, May, followed by declining summertime sales, then a
smaller second peak in October. Overall, nearly 31% of annual sales occurred during the
peak 3-month period. Large firms had markedly greater seasonal sales. Presumably this
pattern is related to the market for holiday floral crops during this period.









RESULTS

Income and Value Produced

Annual Sales. Total annual sales averaged $1.14 million (M) for all firms and ranged from
$2.40M for large firms to $293 thousand (K) for small firms, as shown in Table 2. Sales of
own products grown by firms averaged $650K or 57% of total sales, while sales of finished
products purchased for immediate resale ("brokered") were $494K or 43% of total sales.
Large and highly profitable firms had a somewhat higher percentage of brokered sales, while
medium and small firms had a lower percentage.


Table 2. Income and value produced for Florida cut foliage businesses, 1996. All
values in thousands dollars.

All Firms Large Firms Medium Firms Small Firms Highly Profitable
IncomeNalue Measure
Average Average Average Average Firms Average
Own Produced Product Sales 650 1,223 498 204 810
Brokered Product Sales 494 1,178 157 90 1,054
Total Annual Sales 1,144 2,401 655 294 1,864
Change in Plant Inventory Value 8 11 1 10 6
Total Value of Production 658 1,234 499 214 816
Total Income 1,181 2,464 691 306 1,920


Plant Inventory Change and Total Value Produced. Changes in plant inventory values
during 1996 (Jan. 1 to Dec. 31) were positive for all industry groups and averaged $7.6K for
all firms. Total value produced, a measure of productive effort calculated as the sum of own
plant sales and change in plant inventory value, averaged $658K for all firms and ranged
from $1.23M for large firms to $214K for small firms.

Total Income. Total income was the sum of plant sales, changes in plant inventory values,
and miscellaneous income from interest on accounts, rents, and other charges. It averaged
$1.18M for all firms and ranged from $2.46M for large firms to $306K for small firms.

Monthly Sales. The distribution of monthly sales is shown in Figure 2. Sales peaked during
the spring months of March, April, May, followed by declining summertime sales, then a
smaller second peak in October. Overall, nearly 31% of annual sales occurred during the
peak 3-month period. Large firms had markedly greater seasonal sales. Presumably this
pattern is related to the market for holiday floral crops during this period.









RESULTS

Income and Value Produced

Annual Sales. Total annual sales averaged $1.14 million (M) for all firms and ranged from
$2.40M for large firms to $293 thousand (K) for small firms, as shown in Table 2. Sales of
own products grown by firms averaged $650K or 57% of total sales, while sales of finished
products purchased for immediate resale ("brokered") were $494K or 43% of total sales.
Large and highly profitable firms had a somewhat higher percentage of brokered sales, while
medium and small firms had a lower percentage.


Table 2. Income and value produced for Florida cut foliage businesses, 1996. All
values in thousands dollars.

All Firms Large Firms Medium Firms Small Firms Highly Profitable
IncomeNalue Measure
Average Average Average Average Firms Average
Own Produced Product Sales 650 1,223 498 204 810
Brokered Product Sales 494 1,178 157 90 1,054
Total Annual Sales 1,144 2,401 655 294 1,864
Change in Plant Inventory Value 8 11 1 10 6
Total Value of Production 658 1,234 499 214 816
Total Income 1,181 2,464 691 306 1,920


Plant Inventory Change and Total Value Produced. Changes in plant inventory values
during 1996 (Jan. 1 to Dec. 31) were positive for all industry groups and averaged $7.6K for
all firms. Total value produced, a measure of productive effort calculated as the sum of own
plant sales and change in plant inventory value, averaged $658K for all firms and ranged
from $1.23M for large firms to $214K for small firms.

Total Income. Total income was the sum of plant sales, changes in plant inventory values,
and miscellaneous income from interest on accounts, rents, and other charges. It averaged
$1.18M for all firms and ranged from $2.46M for large firms to $306K for small firms.

Monthly Sales. The distribution of monthly sales is shown in Figure 2. Sales peaked during
the spring months of March, April, May, followed by declining summertime sales, then a
smaller second peak in October. Overall, nearly 31% of annual sales occurred during the
peak 3-month period. Large firms had markedly greater seasonal sales. Presumably this
pattern is related to the market for holiday floral crops during this period.










$300 All
AII


$250 Large


S$200 Medium


( $150 /Small
0

$100 High Profit


$50 -
$50

$0 I I I I I I I i------i
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month

Figure 2. Monthly sales for Florida cut foliage businesses, 1996.









Resource Use, and Productivity, Efficiency and Intensity Indicators


Productive resources of land, labor and capital used by the cut foliage industry are
summarized in Table 3. Land and capital used represent averages of beginning and ending
values for the year.


Table 3. Productive resources used by Florida cut foliage businesses, 1996.

Resource Units A firms Large Medium Small Highly Profitable
Resource Units All Firms Firms Firms Firms Firms
Total Farm Area acres 168.3 305.7 121.5 69.9 188.1
Net Usable Production Area* 50.5 94.3 30.7 23.2 76.4
Number persons employed FTE** 30.2 65.7 15.5 7.0 47.8
Total Owned Capital $K 1,147 1,988 935 482 1,547
Capital Leased (Land) 245 276 62 366 418
Total Capital Managed*** 1,392 2,264 997 848 1,965
Net usable production area excludes roads within femery.
** Full-time equivalent person represents 2,080 hours per year.
*** Capital managed is capital owned both equity and debt capital, plus capital leased.


Land. The total farm area of surveyed cut foliage growers averaged 168 acres (Table 3).
The net usable area for production of cut foliage averaged 50 acres for all firms and ranged
from 94 acres for large firms to 23 acres for small firms. These figures represent growing
beds and fields only; area for aisles, driveways and other service areas were excluded.

Labor. Labor resources used were measured in terms of fulltime equivalent (FTE) persons
employed, 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 employed
averaged 30 for all firms and ranged from 66 for large firms to 7 for small firms.

Capital Managed. Both equity and debt capital and leased assets in land, buildings,
equipment and working capital represented capital resources used for 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 $1.39M for all firms and
ranged from $2.26M for large firms to $848K for small firms. Land represented the largest
share of capital managed (43%), followed by growing plants in inventory (27%) and
buildings/installations (15%).

Value Produced per Acre. The productivity of cut foliage operation space was measured by
the value of production (annual sales of own product plus inventory change) per acre of
growing space. Value produced per acre averaged $13.0K per acre, and ranged from $16.3K
for medium firms to $9.2K for small firms (Table 4). Highly profitable firms produced $10.7K
per acre. Space productivity is affected by production area layout and space utilization
efficiency (renovation), plant growth rates and survival, and inventory turnover.









Resource Use, and Productivity, Efficiency and Intensity Indicators


Productive resources of land, labor and capital used by the cut foliage industry are
summarized in Table 3. Land and capital used represent averages of beginning and ending
values for the year.


Table 3. Productive resources used by Florida cut foliage businesses, 1996.

Resource Units A firms Large Medium Small Highly Profitable
Resource Units All Firms Firms Firms Firms Firms
Total Farm Area acres 168.3 305.7 121.5 69.9 188.1
Net Usable Production Area* 50.5 94.3 30.7 23.2 76.4
Number persons employed FTE** 30.2 65.7 15.5 7.0 47.8
Total Owned Capital $K 1,147 1,988 935 482 1,547
Capital Leased (Land) 245 276 62 366 418
Total Capital Managed*** 1,392 2,264 997 848 1,965
Net usable production area excludes roads within femery.
** Full-time equivalent person represents 2,080 hours per year.
*** Capital managed is capital owned both equity and debt capital, plus capital leased.


Land. The total farm area of surveyed cut foliage growers averaged 168 acres (Table 3).
The net usable area for production of cut foliage averaged 50 acres for all firms and ranged
from 94 acres for large firms to 23 acres for small firms. These figures represent growing
beds and fields only; area for aisles, driveways and other service areas were excluded.

Labor. Labor resources used were measured in terms of fulltime equivalent (FTE) persons
employed, 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 employed
averaged 30 for all firms and ranged from 66 for large firms to 7 for small firms.

Capital Managed. Both equity and debt capital and leased assets in land, buildings,
equipment and working capital represented capital resources used for 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 $1.39M for all firms and
ranged from $2.26M for large firms to $848K for small firms. Land represented the largest
share of capital managed (43%), followed by growing plants in inventory (27%) and
buildings/installations (15%).

Value Produced per Acre. The productivity of cut foliage operation space was measured by
the value of production (annual sales of own product plus inventory change) per acre of
growing space. Value produced per acre averaged $13.0K per acre, and ranged from $16.3K
for medium firms to $9.2K for small firms (Table 4). Highly profitable firms produced $10.7K
per acre. Space productivity is affected by production area layout and space utilization
efficiency (renovation), plant growth rates and survival, and inventory turnover.









Resource Use, and Productivity, Efficiency and Intensity Indicators


Productive resources of land, labor and capital used by the cut foliage industry are
summarized in Table 3. Land and capital used represent averages of beginning and ending
values for the year.


Table 3. Productive resources used by Florida cut foliage businesses, 1996.

Resource Units A firms Large Medium Small Highly Profitable
Resource Units All Firms Firms Firms Firms Firms
Total Farm Area acres 168.3 305.7 121.5 69.9 188.1
Net Usable Production Area* 50.5 94.3 30.7 23.2 76.4
Number persons employed FTE** 30.2 65.7 15.5 7.0 47.8
Total Owned Capital $K 1,147 1,988 935 482 1,547
Capital Leased (Land) 245 276 62 366 418
Total Capital Managed*** 1,392 2,264 997 848 1,965
Net usable production area excludes roads within femery.
** Full-time equivalent person represents 2,080 hours per year.
*** Capital managed is capital owned both equity and debt capital, plus capital leased.


Land. The total farm area of surveyed cut foliage growers averaged 168 acres (Table 3).
The net usable area for production of cut foliage averaged 50 acres for all firms and ranged
from 94 acres for large firms to 23 acres for small firms. These figures represent growing
beds and fields only; area for aisles, driveways and other service areas were excluded.

Labor. Labor resources used were measured in terms of fulltime equivalent (FTE) persons
employed, 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 employed
averaged 30 for all firms and ranged from 66 for large firms to 7 for small firms.

Capital Managed. Both equity and debt capital and leased assets in land, buildings,
equipment and working capital represented capital resources used for 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 $1.39M for all firms and
ranged from $2.26M for large firms to $848K for small firms. Land represented the largest
share of capital managed (43%), followed by growing plants in inventory (27%) and
buildings/installations (15%).

Value Produced per Acre. The productivity of cut foliage operation space was measured by
the value of production (annual sales of own product plus inventory change) per acre of
growing space. Value produced per acre averaged $13.0K per acre, and ranged from $16.3K
for medium firms to $9.2K for small firms (Table 4). Highly profitable firms produced $10.7K
per acre. Space productivity is affected by production area layout and space utilization
efficiency (renovation), plant growth rates and survival, and inventory turnover.









Resource Use, and Productivity, Efficiency and Intensity Indicators


Productive resources of land, labor and capital used by the cut foliage industry are
summarized in Table 3. Land and capital used represent averages of beginning and ending
values for the year.


Table 3. Productive resources used by Florida cut foliage businesses, 1996.

Resource Units A firms Large Medium Small Highly Profitable
Resource Units All Firms Firms Firms Firms Firms
Total Farm Area acres 168.3 305.7 121.5 69.9 188.1
Net Usable Production Area* 50.5 94.3 30.7 23.2 76.4
Number persons employed FTE** 30.2 65.7 15.5 7.0 47.8
Total Owned Capital $K 1,147 1,988 935 482 1,547
Capital Leased (Land) 245 276 62 366 418
Total Capital Managed*** 1,392 2,264 997 848 1,965
Net usable production area excludes roads within femery.
** Full-time equivalent person represents 2,080 hours per year.
*** Capital managed is capital owned both equity and debt capital, plus capital leased.


Land. The total farm area of surveyed cut foliage growers averaged 168 acres (Table 3).
The net usable area for production of cut foliage averaged 50 acres for all firms and ranged
from 94 acres for large firms to 23 acres for small firms. These figures represent growing
beds and fields only; area for aisles, driveways and other service areas were excluded.

Labor. Labor resources used were measured in terms of fulltime equivalent (FTE) persons
employed, 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 employed
averaged 30 for all firms and ranged from 66 for large firms to 7 for small firms.

Capital Managed. Both equity and debt capital and leased assets in land, buildings,
equipment and working capital represented capital resources used for 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 $1.39M for all firms and
ranged from $2.26M for large firms to $848K for small firms. Land represented the largest
share of capital managed (43%), followed by growing plants in inventory (27%) and
buildings/installations (15%).

Value Produced per Acre. The productivity of cut foliage operation space was measured by
the value of production (annual sales of own product plus inventory change) per acre of
growing space. Value produced per acre averaged $13.0K per acre, and ranged from $16.3K
for medium firms to $9.2K for small firms (Table 4). Highly profitable firms produced $10.7K
per acre. Space productivity is affected by production area layout and space utilization
efficiency (renovation), plant growth rates and survival, and inventory turnover.









Resource Use, and Productivity, Efficiency and Intensity Indicators


Productive resources of land, labor and capital used by the cut foliage industry are
summarized in Table 3. Land and capital used represent averages of beginning and ending
values for the year.


Table 3. Productive resources used by Florida cut foliage businesses, 1996.

Resource Units A firms Large Medium Small Highly Profitable
Resource Units All Firms Firms Firms Firms Firms
Total Farm Area acres 168.3 305.7 121.5 69.9 188.1
Net Usable Production Area* 50.5 94.3 30.7 23.2 76.4
Number persons employed FTE** 30.2 65.7 15.5 7.0 47.8
Total Owned Capital $K 1,147 1,988 935 482 1,547
Capital Leased (Land) 245 276 62 366 418
Total Capital Managed*** 1,392 2,264 997 848 1,965
Net usable production area excludes roads within femery.
** Full-time equivalent person represents 2,080 hours per year.
*** Capital managed is capital owned both equity and debt capital, plus capital leased.


Land. The total farm area of surveyed cut foliage growers averaged 168 acres (Table 3).
The net usable area for production of cut foliage averaged 50 acres for all firms and ranged
from 94 acres for large firms to 23 acres for small firms. These figures represent growing
beds and fields only; area for aisles, driveways and other service areas were excluded.

Labor. Labor resources used were measured in terms of fulltime equivalent (FTE) persons
employed, 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 employed
averaged 30 for all firms and ranged from 66 for large firms to 7 for small firms.

Capital Managed. Both equity and debt capital and leased assets in land, buildings,
equipment and working capital represented capital resources used for 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 $1.39M for all firms and
ranged from $2.26M for large firms to $848K for small firms. Land represented the largest
share of capital managed (43%), followed by growing plants in inventory (27%) and
buildings/installations (15%).

Value Produced per Acre. The productivity of cut foliage operation space was measured by
the value of production (annual sales of own product plus inventory change) per acre of
growing space. Value produced per acre averaged $13.0K per acre, and ranged from $16.3K
for medium firms to $9.2K for small firms (Table 4). Highly profitable firms produced $10.7K
per acre. Space productivity is affected by production area layout and space utilization
efficiency (renovation), plant growth rates and survival, and inventory turnover.










Capital Managed per Acre. The intensity of capital use in relation to production space was
measured as the ratio of capital managed to growing area (acres). Capital managed per
acre of growing area averaged $27.6K for all firms, and ranged from $24.0K for large firms to
$36.6K for small firms. Highly profitable firms had slightly below-average capital managed
per acre.

Sales and Value Produced per Worker. Labor productivity was measured in terms of sales
and value produced per fulltime equivalent (FTE) worker, or per 2,080 labor hours per year.
For all firms, labor productivity averaged $21.8K per FTE, or $10.48 per hour worked. This
value ranged from $18.8K per FTE for large firms to $32.1K per FTE for medium firms.
Variations in labor productivity may result from differences in investment for labor-saving
equipment, labor management practices, and practices affecting crop tumover.

Growing Area Managed per Worker. The intensity of labor use was evaluated in terms of
production area (acres) per FTE person. Growing space per FTE averaged 1.67 acres for all
firms, and ranged from 1.44 acres for large firms to 3.31 acres for small firms.

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 $46.0K per FTE for all firms, and ranged from $34.5K for large firms to
S121.1K for small firms. The substantially lower capital-labor intensity for large firms may
reflect economies of scale in cut foliage production, i.e. the greater efficiencies of resource
use that can be realized for larger-sized operations through specialization of tasks and better
utilization of technology.

Managed Capital Turnover. This indicator expresses the ratio of annual sales to total
managed capital. Managed capital turnover averaged 0.82 for all firms, and ranged from
1.06 for large firms to 0.35 for small firms. In general, high capital turnover is desirable,
indicating greater sales per dollar of investment. Low turnover rates may result from low
labor or space productivity or excessive capital investment. The capital turnover for these cut
foliage firms was somewhat higher than that for ornamental plant nurseries in Florida (0.55,
Hodges et al, 1997).

Table 4. Resource productivity, efficiency and use intensity indicators for Florida cut
foliage businesses, 1996.

Indicator units Firms Large Medium Small Highly Profitable
IndicatorUnits A Firms Firms Firms Firms Firms
Per Acre Value of Production $K 13.0 13.1 16.3 9.2 10.7
Production Area Capital Managed $K 27.6 24.0 32.5 36.6 25.7
FTE Persons Employed FTE 0.6 0.7 0.5 0.3 0.6
Per FTE Persons Total Sales $K 37.9 36.6 42.2 42.0 39.0
Employed Sales Own Plants $K 21.5 18.6 32.0 29.2 17.0
Value of Production $K 21.8 18.8 32.1 30.5 17.1
Capital Managed $K 46.0 34.5 64.2 121.1 41.1
Production Area Acres 1.7 1.4 2.0 3.3 1.6
Managed Capital Turnover* 0.82 1.06 0.66 0.35 0.95
I Ratio of total sales to managed capital










Capital Managed per Acre. The intensity of capital use in relation to production space was
measured as the ratio of capital managed to growing area (acres). Capital managed per
acre of growing area averaged $27.6K for all firms, and ranged from $24.0K for large firms to
$36.6K for small firms. Highly profitable firms had slightly below-average capital managed
per acre.

Sales and Value Produced per Worker. Labor productivity was measured in terms of sales
and value produced per fulltime equivalent (FTE) worker, or per 2,080 labor hours per year.
For all firms, labor productivity averaged $21.8K per FTE, or $10.48 per hour worked. This
value ranged from $18.8K per FTE for large firms to $32.1K per FTE for medium firms.
Variations in labor productivity may result from differences in investment for labor-saving
equipment, labor management practices, and practices affecting crop tumover.

Growing Area Managed per Worker. The intensity of labor use was evaluated in terms of
production area (acres) per FTE person. Growing space per FTE averaged 1.67 acres for all
firms, and ranged from 1.44 acres for large firms to 3.31 acres for small firms.

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 $46.0K per FTE for all firms, and ranged from $34.5K for large firms to
S121.1K for small firms. The substantially lower capital-labor intensity for large firms may
reflect economies of scale in cut foliage production, i.e. the greater efficiencies of resource
use that can be realized for larger-sized operations through specialization of tasks and better
utilization of technology.

Managed Capital Turnover. This indicator expresses the ratio of annual sales to total
managed capital. Managed capital turnover averaged 0.82 for all firms, and ranged from
1.06 for large firms to 0.35 for small firms. In general, high capital turnover is desirable,
indicating greater sales per dollar of investment. Low turnover rates may result from low
labor or space productivity or excessive capital investment. The capital turnover for these cut
foliage firms was somewhat higher than that for ornamental plant nurseries in Florida (0.55,
Hodges et al, 1997).

Table 4. Resource productivity, efficiency and use intensity indicators for Florida cut
foliage businesses, 1996.

Indicator units Firms Large Medium Small Highly Profitable
IndicatorUnits A Firms Firms Firms Firms Firms
Per Acre Value of Production $K 13.0 13.1 16.3 9.2 10.7
Production Area Capital Managed $K 27.6 24.0 32.5 36.6 25.7
FTE Persons Employed FTE 0.6 0.7 0.5 0.3 0.6
Per FTE Persons Total Sales $K 37.9 36.6 42.2 42.0 39.0
Employed Sales Own Plants $K 21.5 18.6 32.0 29.2 17.0
Value of Production $K 21.8 18.8 32.1 30.5 17.1
Capital Managed $K 46.0 34.5 64.2 121.1 41.1
Production Area Acres 1.7 1.4 2.0 3.3 1.6
Managed Capital Turnover* 0.82 1.06 0.66 0.35 0.95
I Ratio of total sales to managed capital










Capital Managed per Acre. The intensity of capital use in relation to production space was
measured as the ratio of capital managed to growing area (acres). Capital managed per
acre of growing area averaged $27.6K for all firms, and ranged from $24.0K for large firms to
$36.6K for small firms. Highly profitable firms had slightly below-average capital managed
per acre.

Sales and Value Produced per Worker. Labor productivity was measured in terms of sales
and value produced per fulltime equivalent (FTE) worker, or per 2,080 labor hours per year.
For all firms, labor productivity averaged $21.8K per FTE, or $10.48 per hour worked. This
value ranged from $18.8K per FTE for large firms to $32.1K per FTE for medium firms.
Variations in labor productivity may result from differences in investment for labor-saving
equipment, labor management practices, and practices affecting crop tumover.

Growing Area Managed per Worker. The intensity of labor use was evaluated in terms of
production area (acres) per FTE person. Growing space per FTE averaged 1.67 acres for all
firms, and ranged from 1.44 acres for large firms to 3.31 acres for small firms.

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 $46.0K per FTE for all firms, and ranged from $34.5K for large firms to
S121.1K for small firms. The substantially lower capital-labor intensity for large firms may
reflect economies of scale in cut foliage production, i.e. the greater efficiencies of resource
use that can be realized for larger-sized operations through specialization of tasks and better
utilization of technology.

Managed Capital Turnover. This indicator expresses the ratio of annual sales to total
managed capital. Managed capital turnover averaged 0.82 for all firms, and ranged from
1.06 for large firms to 0.35 for small firms. In general, high capital turnover is desirable,
indicating greater sales per dollar of investment. Low turnover rates may result from low
labor or space productivity or excessive capital investment. The capital turnover for these cut
foliage firms was somewhat higher than that for ornamental plant nurseries in Florida (0.55,
Hodges et al, 1997).

Table 4. Resource productivity, efficiency and use intensity indicators for Florida cut
foliage businesses, 1996.

Indicator units Firms Large Medium Small Highly Profitable
IndicatorUnits A Firms Firms Firms Firms Firms
Per Acre Value of Production $K 13.0 13.1 16.3 9.2 10.7
Production Area Capital Managed $K 27.6 24.0 32.5 36.6 25.7
FTE Persons Employed FTE 0.6 0.7 0.5 0.3 0.6
Per FTE Persons Total Sales $K 37.9 36.6 42.2 42.0 39.0
Employed Sales Own Plants $K 21.5 18.6 32.0 29.2 17.0
Value of Production $K 21.8 18.8 32.1 30.5 17.1
Capital Managed $K 46.0 34.5 64.2 121.1 41.1
Production Area Acres 1.7 1.4 2.0 3.3 1.6
Managed Capital Turnover* 0.82 1.06 0.66 0.35 0.95
I Ratio of total sales to managed capital










Capital Managed per Acre. The intensity of capital use in relation to production space was
measured as the ratio of capital managed to growing area (acres). Capital managed per
acre of growing area averaged $27.6K for all firms, and ranged from $24.0K for large firms to
$36.6K for small firms. Highly profitable firms had slightly below-average capital managed
per acre.

Sales and Value Produced per Worker. Labor productivity was measured in terms of sales
and value produced per fulltime equivalent (FTE) worker, or per 2,080 labor hours per year.
For all firms, labor productivity averaged $21.8K per FTE, or $10.48 per hour worked. This
value ranged from $18.8K per FTE for large firms to $32.1K per FTE for medium firms.
Variations in labor productivity may result from differences in investment for labor-saving
equipment, labor management practices, and practices affecting crop tumover.

Growing Area Managed per Worker. The intensity of labor use was evaluated in terms of
production area (acres) per FTE person. Growing space per FTE averaged 1.67 acres for all
firms, and ranged from 1.44 acres for large firms to 3.31 acres for small firms.

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 $46.0K per FTE for all firms, and ranged from $34.5K for large firms to
S121.1K for small firms. The substantially lower capital-labor intensity for large firms may
reflect economies of scale in cut foliage production, i.e. the greater efficiencies of resource
use that can be realized for larger-sized operations through specialization of tasks and better
utilization of technology.

Managed Capital Turnover. This indicator expresses the ratio of annual sales to total
managed capital. Managed capital turnover averaged 0.82 for all firms, and ranged from
1.06 for large firms to 0.35 for small firms. In general, high capital turnover is desirable,
indicating greater sales per dollar of investment. Low turnover rates may result from low
labor or space productivity or excessive capital investment. The capital turnover for these cut
foliage firms was somewhat higher than that for ornamental plant nurseries in Florida (0.55,
Hodges et al, 1997).

Table 4. Resource productivity, efficiency and use intensity indicators for Florida cut
foliage businesses, 1996.

Indicator units Firms Large Medium Small Highly Profitable
IndicatorUnits A Firms Firms Firms Firms Firms
Per Acre Value of Production $K 13.0 13.1 16.3 9.2 10.7
Production Area Capital Managed $K 27.6 24.0 32.5 36.6 25.7
FTE Persons Employed FTE 0.6 0.7 0.5 0.3 0.6
Per FTE Persons Total Sales $K 37.9 36.6 42.2 42.0 39.0
Employed Sales Own Plants $K 21.5 18.6 32.0 29.2 17.0
Value of Production $K 21.8 18.8 32.1 30.5 17.1
Capital Managed $K 46.0 34.5 64.2 121.1 41.1
Production Area Acres 1.7 1.4 2.0 3.3 1.6
Managed Capital Turnover* 0.82 1.06 0.66 0.35 0.95
I Ratio of total sales to managed capital










Capital Managed per Acre. The intensity of capital use in relation to production space was
measured as the ratio of capital managed to growing area (acres). Capital managed per
acre of growing area averaged $27.6K for all firms, and ranged from $24.0K for large firms to
$36.6K for small firms. Highly profitable firms had slightly below-average capital managed
per acre.

Sales and Value Produced per Worker. Labor productivity was measured in terms of sales
and value produced per fulltime equivalent (FTE) worker, or per 2,080 labor hours per year.
For all firms, labor productivity averaged $21.8K per FTE, or $10.48 per hour worked. This
value ranged from $18.8K per FTE for large firms to $32.1K per FTE for medium firms.
Variations in labor productivity may result from differences in investment for labor-saving
equipment, labor management practices, and practices affecting crop tumover.

Growing Area Managed per Worker. The intensity of labor use was evaluated in terms of
production area (acres) per FTE person. Growing space per FTE averaged 1.67 acres for all
firms, and ranged from 1.44 acres for large firms to 3.31 acres for small firms.

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 $46.0K per FTE for all firms, and ranged from $34.5K for large firms to
S121.1K for small firms. The substantially lower capital-labor intensity for large firms may
reflect economies of scale in cut foliage production, i.e. the greater efficiencies of resource
use that can be realized for larger-sized operations through specialization of tasks and better
utilization of technology.

Managed Capital Turnover. This indicator expresses the ratio of annual sales to total
managed capital. Managed capital turnover averaged 0.82 for all firms, and ranged from
1.06 for large firms to 0.35 for small firms. In general, high capital turnover is desirable,
indicating greater sales per dollar of investment. Low turnover rates may result from low
labor or space productivity or excessive capital investment. The capital turnover for these cut
foliage firms was somewhat higher than that for ornamental plant nurseries in Florida (0.55,
Hodges et al, 1997).

Table 4. Resource productivity, efficiency and use intensity indicators for Florida cut
foliage businesses, 1996.

Indicator units Firms Large Medium Small Highly Profitable
IndicatorUnits A Firms Firms Firms Firms Firms
Per Acre Value of Production $K 13.0 13.1 16.3 9.2 10.7
Production Area Capital Managed $K 27.6 24.0 32.5 36.6 25.7
FTE Persons Employed FTE 0.6 0.7 0.5 0.3 0.6
Per FTE Persons Total Sales $K 37.9 36.6 42.2 42.0 39.0
Employed Sales Own Plants $K 21.5 18.6 32.0 29.2 17.0
Value of Production $K 21.8 18.8 32.1 30.5 17.1
Capital Managed $K 46.0 34.5 64.2 121.1 41.1
Production Area Acres 1.7 1.4 2.0 3.3 1.6
Managed Capital Turnover* 0.82 1.06 0.66 0.35 0.95
I Ratio of total sales to managed capital









Expenses and Cost Efficiency


Operating expenses were grouped into the following categories: employees' wages and
benefits, materials, finished products purchased for resale, facility and equipment,
administrative overhead, capital, and management/owner compensation. The first three
expense categories were considered direct production costs, while the other categories were
considered indirect expenses. Expenses for income taxes or debt principal payments were
not included. Costs are itemized in Table 5 and summarized by major category in Figure 3.

Employee Expenses included wages, salaries, sales commissions, payroll taxes (social
security), workman's insurance, health insurance, bonuses and other benefits paid. This was
by far the largest expense category for these businesses, averaging $411K for all firms and
ranging from $861K for large firms to $85K for small firms (Table 5). Employee expenses
represented 37% of total costs (Figure 3), which is a somewhat greater percentage than for
omamental plant nurseries (34%, Hodges et al, 1997), indicating a greater labor intensity.

Materials Expenses included plants and seeds, fuel for production and cold protection,
fertilizer and lime, herbicides, fungicides, insecticides, other chemicals, packing and shipping
materials, and other production supplies such as tags and small tools. These items are
"direct" expenses or "cost of goods sold". Expenses for materials averaged $157K for all
firms and ranged from $327K for large firms to $53K for small firms. Chemicals (herbicides,
fungicides, insecticides, other) represented $53K in expenses or 34% of total material
expenses.

Facility and Equipment Expenses included repairs and maintenance for production and
packing facilities and equipment operating costs such as fuel and lubrication. Expenses
averaged $48K for all firms and ranged from $83K for large firms to $18K for small firms.

Administrative Overhead Expenses 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 $95K for all firms and ranged from $189K
for large firms to $28K for small firms.

Capital Costs included interest on borrowed capital in the form of mortgages, promissory
notes and charge accounts, and depreciation on fixed assets. Total capital costs averaged
$78K for all firms and ranged from $139K for large firms to $39K for small firms.
Depreciation expenses averaged $46K for all firms.

Management/Owner Compensation represented salaries and benefits paid to owners and
top management. These expenses averaged $69K for all firms and ranged from $118K for
large firms to $37K for small firms.

Total Costs averaged $1.12M for all firms and ranged from $2.33M for large firms to $313K
for small firms.









Expenses and Cost Efficiency


Operating expenses were grouped into the following categories: employees' wages and
benefits, materials, finished products purchased for resale, facility and equipment,
administrative overhead, capital, and management/owner compensation. The first three
expense categories were considered direct production costs, while the other categories were
considered indirect expenses. Expenses for income taxes or debt principal payments were
not included. Costs are itemized in Table 5 and summarized by major category in Figure 3.

Employee Expenses included wages, salaries, sales commissions, payroll taxes (social
security), workman's insurance, health insurance, bonuses and other benefits paid. This was
by far the largest expense category for these businesses, averaging $411K for all firms and
ranging from $861K for large firms to $85K for small firms (Table 5). Employee expenses
represented 37% of total costs (Figure 3), which is a somewhat greater percentage than for
omamental plant nurseries (34%, Hodges et al, 1997), indicating a greater labor intensity.

Materials Expenses included plants and seeds, fuel for production and cold protection,
fertilizer and lime, herbicides, fungicides, insecticides, other chemicals, packing and shipping
materials, and other production supplies such as tags and small tools. These items are
"direct" expenses or "cost of goods sold". Expenses for materials averaged $157K for all
firms and ranged from $327K for large firms to $53K for small firms. Chemicals (herbicides,
fungicides, insecticides, other) represented $53K in expenses or 34% of total material
expenses.

Facility and Equipment Expenses included repairs and maintenance for production and
packing facilities and equipment operating costs such as fuel and lubrication. Expenses
averaged $48K for all firms and ranged from $83K for large firms to $18K for small firms.

Administrative Overhead Expenses 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 $95K for all firms and ranged from $189K
for large firms to $28K for small firms.

Capital Costs included interest on borrowed capital in the form of mortgages, promissory
notes and charge accounts, and depreciation on fixed assets. Total capital costs averaged
$78K for all firms and ranged from $139K for large firms to $39K for small firms.
Depreciation expenses averaged $46K for all firms.

Management/Owner Compensation represented salaries and benefits paid to owners and
top management. These expenses averaged $69K for all firms and ranged from $118K for
large firms to $37K for small firms.

Total Costs averaged $1.12M for all firms and ranged from $2.33M for large firms to $313K
for small firms.









Expenses and Cost Efficiency


Operating expenses were grouped into the following categories: employees' wages and
benefits, materials, finished products purchased for resale, facility and equipment,
administrative overhead, capital, and management/owner compensation. The first three
expense categories were considered direct production costs, while the other categories were
considered indirect expenses. Expenses for income taxes or debt principal payments were
not included. Costs are itemized in Table 5 and summarized by major category in Figure 3.

Employee Expenses included wages, salaries, sales commissions, payroll taxes (social
security), workman's insurance, health insurance, bonuses and other benefits paid. This was
by far the largest expense category for these businesses, averaging $411K for all firms and
ranging from $861K for large firms to $85K for small firms (Table 5). Employee expenses
represented 37% of total costs (Figure 3), which is a somewhat greater percentage than for
omamental plant nurseries (34%, Hodges et al, 1997), indicating a greater labor intensity.

Materials Expenses included plants and seeds, fuel for production and cold protection,
fertilizer and lime, herbicides, fungicides, insecticides, other chemicals, packing and shipping
materials, and other production supplies such as tags and small tools. These items are
"direct" expenses or "cost of goods sold". Expenses for materials averaged $157K for all
firms and ranged from $327K for large firms to $53K for small firms. Chemicals (herbicides,
fungicides, insecticides, other) represented $53K in expenses or 34% of total material
expenses.

Facility and Equipment Expenses included repairs and maintenance for production and
packing facilities and equipment operating costs such as fuel and lubrication. Expenses
averaged $48K for all firms and ranged from $83K for large firms to $18K for small firms.

Administrative Overhead Expenses 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 $95K for all firms and ranged from $189K
for large firms to $28K for small firms.

Capital Costs included interest on borrowed capital in the form of mortgages, promissory
notes and charge accounts, and depreciation on fixed assets. Total capital costs averaged
$78K for all firms and ranged from $139K for large firms to $39K for small firms.
Depreciation expenses averaged $46K for all firms.

Management/Owner Compensation represented salaries and benefits paid to owners and
top management. These expenses averaged $69K for all firms and ranged from $118K for
large firms to $37K for small firms.

Total Costs averaged $1.12M for all firms and ranged from $2.33M for large firms to $313K
for small firms.









Expenses and Cost Efficiency


Operating expenses were grouped into the following categories: employees' wages and
benefits, materials, finished products purchased for resale, facility and equipment,
administrative overhead, capital, and management/owner compensation. The first three
expense categories were considered direct production costs, while the other categories were
considered indirect expenses. Expenses for income taxes or debt principal payments were
not included. Costs are itemized in Table 5 and summarized by major category in Figure 3.

Employee Expenses included wages, salaries, sales commissions, payroll taxes (social
security), workman's insurance, health insurance, bonuses and other benefits paid. This was
by far the largest expense category for these businesses, averaging $411K for all firms and
ranging from $861K for large firms to $85K for small firms (Table 5). Employee expenses
represented 37% of total costs (Figure 3), which is a somewhat greater percentage than for
omamental plant nurseries (34%, Hodges et al, 1997), indicating a greater labor intensity.

Materials Expenses included plants and seeds, fuel for production and cold protection,
fertilizer and lime, herbicides, fungicides, insecticides, other chemicals, packing and shipping
materials, and other production supplies such as tags and small tools. These items are
"direct" expenses or "cost of goods sold". Expenses for materials averaged $157K for all
firms and ranged from $327K for large firms to $53K for small firms. Chemicals (herbicides,
fungicides, insecticides, other) represented $53K in expenses or 34% of total material
expenses.

Facility and Equipment Expenses included repairs and maintenance for production and
packing facilities and equipment operating costs such as fuel and lubrication. Expenses
averaged $48K for all firms and ranged from $83K for large firms to $18K for small firms.

Administrative Overhead Expenses 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 $95K for all firms and ranged from $189K
for large firms to $28K for small firms.

Capital Costs included interest on borrowed capital in the form of mortgages, promissory
notes and charge accounts, and depreciation on fixed assets. Total capital costs averaged
$78K for all firms and ranged from $139K for large firms to $39K for small firms.
Depreciation expenses averaged $46K for all firms.

Management/Owner Compensation represented salaries and benefits paid to owners and
top management. These expenses averaged $69K for all firms and ranged from $118K for
large firms to $37K for small firms.

Total Costs averaged $1.12M for all firms and ranged from $2.33M for large firms to $313K
for small firms.









Expenses and Cost Efficiency


Operating expenses were grouped into the following categories: employees' wages and
benefits, materials, finished products purchased for resale, facility and equipment,
administrative overhead, capital, and management/owner compensation. The first three
expense categories were considered direct production costs, while the other categories were
considered indirect expenses. Expenses for income taxes or debt principal payments were
not included. Costs are itemized in Table 5 and summarized by major category in Figure 3.

Employee Expenses included wages, salaries, sales commissions, payroll taxes (social
security), workman's insurance, health insurance, bonuses and other benefits paid. This was
by far the largest expense category for these businesses, averaging $411K for all firms and
ranging from $861K for large firms to $85K for small firms (Table 5). Employee expenses
represented 37% of total costs (Figure 3), which is a somewhat greater percentage than for
omamental plant nurseries (34%, Hodges et al, 1997), indicating a greater labor intensity.

Materials Expenses included plants and seeds, fuel for production and cold protection,
fertilizer and lime, herbicides, fungicides, insecticides, other chemicals, packing and shipping
materials, and other production supplies such as tags and small tools. These items are
"direct" expenses or "cost of goods sold". Expenses for materials averaged $157K for all
firms and ranged from $327K for large firms to $53K for small firms. Chemicals (herbicides,
fungicides, insecticides, other) represented $53K in expenses or 34% of total material
expenses.

Facility and Equipment Expenses included repairs and maintenance for production and
packing facilities and equipment operating costs such as fuel and lubrication. Expenses
averaged $48K for all firms and ranged from $83K for large firms to $18K for small firms.

Administrative Overhead Expenses 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 $95K for all firms and ranged from $189K
for large firms to $28K for small firms.

Capital Costs included interest on borrowed capital in the form of mortgages, promissory
notes and charge accounts, and depreciation on fixed assets. Total capital costs averaged
$78K for all firms and ranged from $139K for large firms to $39K for small firms.
Depreciation expenses averaged $46K for all firms.

Management/Owner Compensation represented salaries and benefits paid to owners and
top management. These expenses averaged $69K for all firms and ranged from $118K for
large firms to $37K for small firms.

Total Costs averaged $1.12M for all firms and ranged from $2.33M for large firms to $313K
for small firms.









Expenses and Cost Efficiency


Operating expenses were grouped into the following categories: employees' wages and
benefits, materials, finished products purchased for resale, facility and equipment,
administrative overhead, capital, and management/owner compensation. The first three
expense categories were considered direct production costs, while the other categories were
considered indirect expenses. Expenses for income taxes or debt principal payments were
not included. Costs are itemized in Table 5 and summarized by major category in Figure 3.

Employee Expenses included wages, salaries, sales commissions, payroll taxes (social
security), workman's insurance, health insurance, bonuses and other benefits paid. This was
by far the largest expense category for these businesses, averaging $411K for all firms and
ranging from $861K for large firms to $85K for small firms (Table 5). Employee expenses
represented 37% of total costs (Figure 3), which is a somewhat greater percentage than for
omamental plant nurseries (34%, Hodges et al, 1997), indicating a greater labor intensity.

Materials Expenses included plants and seeds, fuel for production and cold protection,
fertilizer and lime, herbicides, fungicides, insecticides, other chemicals, packing and shipping
materials, and other production supplies such as tags and small tools. These items are
"direct" expenses or "cost of goods sold". Expenses for materials averaged $157K for all
firms and ranged from $327K for large firms to $53K for small firms. Chemicals (herbicides,
fungicides, insecticides, other) represented $53K in expenses or 34% of total material
expenses.

Facility and Equipment Expenses included repairs and maintenance for production and
packing facilities and equipment operating costs such as fuel and lubrication. Expenses
averaged $48K for all firms and ranged from $83K for large firms to $18K for small firms.

Administrative Overhead Expenses 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 $95K for all firms and ranged from $189K
for large firms to $28K for small firms.

Capital Costs included interest on borrowed capital in the form of mortgages, promissory
notes and charge accounts, and depreciation on fixed assets. Total capital costs averaged
$78K for all firms and ranged from $139K for large firms to $39K for small firms.
Depreciation expenses averaged $46K for all firms.

Management/Owner Compensation represented salaries and benefits paid to owners and
top management. These expenses averaged $69K for all firms and ranged from $118K for
large firms to $37K for small firms.

Total Costs averaged $1.12M for all firms and ranged from $2.33M for large firms to $313K
for small firms.









Expenses and Cost Efficiency


Operating expenses were grouped into the following categories: employees' wages and
benefits, materials, finished products purchased for resale, facility and equipment,
administrative overhead, capital, and management/owner compensation. The first three
expense categories were considered direct production costs, while the other categories were
considered indirect expenses. Expenses for income taxes or debt principal payments were
not included. Costs are itemized in Table 5 and summarized by major category in Figure 3.

Employee Expenses included wages, salaries, sales commissions, payroll taxes (social
security), workman's insurance, health insurance, bonuses and other benefits paid. This was
by far the largest expense category for these businesses, averaging $411K for all firms and
ranging from $861K for large firms to $85K for small firms (Table 5). Employee expenses
represented 37% of total costs (Figure 3), which is a somewhat greater percentage than for
omamental plant nurseries (34%, Hodges et al, 1997), indicating a greater labor intensity.

Materials Expenses included plants and seeds, fuel for production and cold protection,
fertilizer and lime, herbicides, fungicides, insecticides, other chemicals, packing and shipping
materials, and other production supplies such as tags and small tools. These items are
"direct" expenses or "cost of goods sold". Expenses for materials averaged $157K for all
firms and ranged from $327K for large firms to $53K for small firms. Chemicals (herbicides,
fungicides, insecticides, other) represented $53K in expenses or 34% of total material
expenses.

Facility and Equipment Expenses included repairs and maintenance for production and
packing facilities and equipment operating costs such as fuel and lubrication. Expenses
averaged $48K for all firms and ranged from $83K for large firms to $18K for small firms.

Administrative Overhead Expenses 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 $95K for all firms and ranged from $189K
for large firms to $28K for small firms.

Capital Costs included interest on borrowed capital in the form of mortgages, promissory
notes and charge accounts, and depreciation on fixed assets. Total capital costs averaged
$78K for all firms and ranged from $139K for large firms to $39K for small firms.
Depreciation expenses averaged $46K for all firms.

Management/Owner Compensation represented salaries and benefits paid to owners and
top management. These expenses averaged $69K for all firms and ranged from $118K for
large firms to $37K for small firms.

Total Costs averaged $1.12M for all firms and ranged from $2.33M for large firms to $313K
for small firms.









Expenses and Cost Efficiency


Operating expenses were grouped into the following categories: employees' wages and
benefits, materials, finished products purchased for resale, facility and equipment,
administrative overhead, capital, and management/owner compensation. The first three
expense categories were considered direct production costs, while the other categories were
considered indirect expenses. Expenses for income taxes or debt principal payments were
not included. Costs are itemized in Table 5 and summarized by major category in Figure 3.

Employee Expenses included wages, salaries, sales commissions, payroll taxes (social
security), workman's insurance, health insurance, bonuses and other benefits paid. This was
by far the largest expense category for these businesses, averaging $411K for all firms and
ranging from $861K for large firms to $85K for small firms (Table 5). Employee expenses
represented 37% of total costs (Figure 3), which is a somewhat greater percentage than for
omamental plant nurseries (34%, Hodges et al, 1997), indicating a greater labor intensity.

Materials Expenses included plants and seeds, fuel for production and cold protection,
fertilizer and lime, herbicides, fungicides, insecticides, other chemicals, packing and shipping
materials, and other production supplies such as tags and small tools. These items are
"direct" expenses or "cost of goods sold". Expenses for materials averaged $157K for all
firms and ranged from $327K for large firms to $53K for small firms. Chemicals (herbicides,
fungicides, insecticides, other) represented $53K in expenses or 34% of total material
expenses.

Facility and Equipment Expenses included repairs and maintenance for production and
packing facilities and equipment operating costs such as fuel and lubrication. Expenses
averaged $48K for all firms and ranged from $83K for large firms to $18K for small firms.

Administrative Overhead Expenses 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 $95K for all firms and ranged from $189K
for large firms to $28K for small firms.

Capital Costs included interest on borrowed capital in the form of mortgages, promissory
notes and charge accounts, and depreciation on fixed assets. Total capital costs averaged
$78K for all firms and ranged from $139K for large firms to $39K for small firms.
Depreciation expenses averaged $46K for all firms.

Management/Owner Compensation represented salaries and benefits paid to owners and
top management. These expenses averaged $69K for all firms and ranged from $118K for
large firms to $37K for small firms.

Total Costs averaged $1.12M for all firms and ranged from $2.33M for large firms to $313K
for small firms.










Table 5. Operating expenses for Florida cut foliage businesses, 1996. All values in
dollars.


Large Medium Small Highly
Cost Category/Item All Firms Lae Medium ma profitable
Firms Firms Firms r
Firms
Employees Salaries and wages 353,240 738,803 226,645 73,173 455,023
Taxes and benefits 58,007 122,640 35,281 12,311 85,560
Sub-Total 411,247 861,443 261,926 85,484 540,583
Materials Plants & seeds 5,433 13,445 1,844 411 363
Heating fuel 8,146 17,319 3,722 2,661 9,635
Fertilizers & lime 20,728 35,840 15,304 10,135 34,653
Herbicides 4,771 10,306 1,786 1,724 7,545
Fungicides 23,175 50,983 7,546 8,393 36,610
Insecticides 17,550 38,528 6,056 6,151 27,716
Nematicides 1,457 2,857 928 498 2,303
Other Chemicals 5,812 13,640 2,549 704 8,696
Sub-Total Chemicals 52,766 116,314 18,864 17,468 82,870
Packing supplies 50,377 112,972 25,105 8,843 77,033
Other production supplies 19,338 30,772 12,159 13,887 32,690
Sub-Total All Materials 156,788 326,661 76,999 53,406 237,244
Finished Product Purchased for Resale 264,315 609,125 105,619 51,752 553,929
DIRECT COSTS TOTAL 832,350 1,797,229 444,544 190,643 1,331,756
Facility & Facility repairs & maintenance 22,366 31,395 26,408 9,967 41,777
Equipment Equipment operation 25,676 51,157 16,400 7,925 29,054
Sub-Total 48,042 82;552 42,809 17,892 70,831
Overhead Travel 4,152 10,673 592 597 3,238
Insurance 8,962 18,500 6,297 1,644 10,057
Telephone 9,247 17,087 7,565 2,808 9,441
Electricity 8,967 17,675 5,662 3,013 9.999
Taxes & licenses 8,983 16,867 7,261 2,535 11,705
Advertising 2,616 4,754 2,733 379 2,637
Rent-land/buildings 15,159 36,435 4,873 2,454 16,377
Other cash costs 36,950 66,910 27,731 14,672 26,944
Sub-Total 95,035 188,900 62,715 28,102 90,398
Capital Depreciation 45,850 73,493 32,151 29,623 55,134
Interest costs 32,531 65,810 20,368 9,388 38,748
Sub-Total 78,381 139,303 52,519 39,012 93,882
Management/Owner Compensation 69,391 117,607 50,360 37,033 75,402
INDIRECT COSTS TOTAL 290,848 528,362 208,402 122,039 330,513
ALL COSTS TOTAL 1,123,198 2,325,591 652,947 312,682 1,662,269












SMaterials 9%1
C Finished Goods 24%
SChemicals 5%

FacilitylEquip- 4%-



Overhead 8%




Capital- 7%


Management 6%
Employees- 37%1





Figure 3. Expenses for Florida cut foliage businesses, 1996.


Cost per Acre. The cost per unit of growing space is a useful measure for comparing cost
efficiencies. Total costs per acre of growing area averaged $17.0K for all firms and varied
from $18.2K for large firms to $11.3K for small firms (Table 6). Highly profitable firms
averaged lower costs per acre ($14.5K) than all firms and than both large and medium firms
($17.8K).

Cost As a Share of Sales. Analysis of expenses in relation to sales is one of the most
reliable measures of cost efficiency in many industries. For all firms, costs as a percentage
of sales averaged 35.9% for employee labor, 13.7% for materials, 23.1% for finished
products brokered, 4.2% for facility and equipment, 8.3% for overhead, 6.9% for capital and
6.1% for management. Employee wages and benefits represented the largest expense as a
share of sales and were greater for large firms (35.9%) and for medium firms (40.0%) than
for small firms (29.1%) presumably because much of the labor was provided by the owners in
small firms. Labor costs were strongly related to profitability; highly profitable firms had
below-average labor costs of 29.0% of sales. Materials costs varied within a rather narrow
range from 11.7% for medium firms to 18.2% for small firms, and highly profitable firms had
below-average material costs of 12.7%. Administrative overhead costs varied within an even
narrower range from 7.9% for large firms to 9.6% for both medium and small firms and












SMaterials 9%1
C Finished Goods 24%
SChemicals 5%

FacilitylEquip- 4%-



Overhead 8%




Capital- 7%


Management 6%
Employees- 37%1





Figure 3. Expenses for Florida cut foliage businesses, 1996.


Cost per Acre. The cost per unit of growing space is a useful measure for comparing cost
efficiencies. Total costs per acre of growing area averaged $17.0K for all firms and varied
from $18.2K for large firms to $11.3K for small firms (Table 6). Highly profitable firms
averaged lower costs per acre ($14.5K) than all firms and than both large and medium firms
($17.8K).

Cost As a Share of Sales. Analysis of expenses in relation to sales is one of the most
reliable measures of cost efficiency in many industries. For all firms, costs as a percentage
of sales averaged 35.9% for employee labor, 13.7% for materials, 23.1% for finished
products brokered, 4.2% for facility and equipment, 8.3% for overhead, 6.9% for capital and
6.1% for management. Employee wages and benefits represented the largest expense as a
share of sales and were greater for large firms (35.9%) and for medium firms (40.0%) than
for small firms (29.1%) presumably because much of the labor was provided by the owners in
small firms. Labor costs were strongly related to profitability; highly profitable firms had
below-average labor costs of 29.0% of sales. Materials costs varied within a rather narrow
range from 11.7% for medium firms to 18.2% for small firms, and highly profitable firms had
below-average material costs of 12.7%. Administrative overhead costs varied within an even
narrower range from 7.9% for large firms to 9.6% for both medium and small firms and










were substantially below-average (4.8%) for highly profitable firms. Capital costs ranged
from 5.8% for large firms to 13.3% for small firms, reflecting significant economies of scale,
and highly profitable operations had capital costs averaging 5.0%. Management costs
ranged from 4.9% for large firms to 12.6% for small firms, not only due to economies of scale
but also the fact that managers of small firms often provided a large share of the labor.

Table 6. Cost efficiency indicators for Florida cut foliage businesses, 1996.

Large Medium Small Highly
Indicator All Firms Medium mall Profitable
Firms Firms Firms
Firms
Costs as Employee Labor 36% 36% 40% 29% 29%
Percentage Materials 14% 14% 12% 18% 13%
of Total Sales Finished Plants 23% 25% 16% 18% 30%
Facility & Equipment 4% 3% 7% 6% 4%
Overhead 8% 8% 10% 10% 5%
Capital Costs 7% 6% 8% 13% 5%
Management/Owner Compensation 6% 5% 8% 13% 4%
Total Costs 98% 97% 100% 106% 89%
Costs per Employee Labor 8.1 9.1 8.5 3.7 7.1
Acre of Materials 3.1 3.5 2.5 2.3 3.1
Production Facility & Equipment 1.0 0.9 1.4 0.8 0.9
Area
(thousands Overhead 1.9 2.0 2.0 1.2 1.2
$) Capital Costs 1.6 1.5 1.7 1.7 1.2
Management/Owner Compensation 1.3 1.2 1.6 1.6 1.0









Net Returns and Profitability


Net Income. This measure is simply the difference between total income and total costs
except management's (owners') compensation. Net firm income averaged $127K for all
firms and ranged from $256K for large firms to $31K for small firms (Table 7). Net income
was $333K for highly profitable firms.

Net Margin. Net margin is the ratio between net income and total income or, in other words,
the share of total income that is net income. Net margin averaged 10.8% for all firms and
was remarkably consistent across firm size groups, ranging from 10.0% for small firms to
12.8% for medium-sized firms. Highly profitable firms had net margins averaging 17.4%.

Return on Assets. This measure was calculated by dividing net income by the value of total
assets. Return on assets averaged 11.1% percent for all firms and ranged from 12.9% for
large firms to 6.3% for small firms. Highly profitable firms had an average return on assets of
21.5%.

Return on Net Worth. This is the most comprehensive measure of profitability and 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. It was calculated as the ratio of
net income to net worth. Return on net worth averaged 18.4% for all firms and ranged from
21.8% for large firms to 11.7% for small firms. Highly profitable firms averaged 34.5% rate of
return on net worth.


Table 7. Net returns and profitability for Florida cut foliage businesses, 1996.


Measure All FLarge Medium Small Highly
Measure All Firms Firms Firms Firms Profitable
Firms Firms Firms
Firms
Net Income: total income less total costs
except management's compensation 127 256 88 31 333
(thousands $)
Net Margin: ratio of net income to total 10.8% 10.4% 12.8% 10.0% 17.4%
income
Return on Assets: ratio of net income to 11.1% 12.9% 9.5% 6.3% 21.5%
total assets
Return on Net Worth: ratio of net income 18.4% 21.8% 14.1% 11.7% 34.5%
to net worth____









Net Returns and Profitability


Net Income. This measure is simply the difference between total income and total costs
except management's (owners') compensation. Net firm income averaged $127K for all
firms and ranged from $256K for large firms to $31K for small firms (Table 7). Net income
was $333K for highly profitable firms.

Net Margin. Net margin is the ratio between net income and total income or, in other words,
the share of total income that is net income. Net margin averaged 10.8% for all firms and
was remarkably consistent across firm size groups, ranging from 10.0% for small firms to
12.8% for medium-sized firms. Highly profitable firms had net margins averaging 17.4%.

Return on Assets. This measure was calculated by dividing net income by the value of total
assets. Return on assets averaged 11.1% percent for all firms and ranged from 12.9% for
large firms to 6.3% for small firms. Highly profitable firms had an average return on assets of
21.5%.

Return on Net Worth. This is the most comprehensive measure of profitability and 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. It was calculated as the ratio of
net income to net worth. Return on net worth averaged 18.4% for all firms and ranged from
21.8% for large firms to 11.7% for small firms. Highly profitable firms averaged 34.5% rate of
return on net worth.


Table 7. Net returns and profitability for Florida cut foliage businesses, 1996.


Measure All FLarge Medium Small Highly
Measure All Firms Firms Firms Firms Profitable
Firms Firms Firms
Firms
Net Income: total income less total costs
except management's compensation 127 256 88 31 333
(thousands $)
Net Margin: ratio of net income to total 10.8% 10.4% 12.8% 10.0% 17.4%
income
Return on Assets: ratio of net income to 11.1% 12.9% 9.5% 6.3% 21.5%
total assets
Return on Net Worth: ratio of net income 18.4% 21.8% 14.1% 11.7% 34.5%
to net worth____









Net Returns and Profitability


Net Income. This measure is simply the difference between total income and total costs
except management's (owners') compensation. Net firm income averaged $127K for all
firms and ranged from $256K for large firms to $31K for small firms (Table 7). Net income
was $333K for highly profitable firms.

Net Margin. Net margin is the ratio between net income and total income or, in other words,
the share of total income that is net income. Net margin averaged 10.8% for all firms and
was remarkably consistent across firm size groups, ranging from 10.0% for small firms to
12.8% for medium-sized firms. Highly profitable firms had net margins averaging 17.4%.

Return on Assets. This measure was calculated by dividing net income by the value of total
assets. Return on assets averaged 11.1% percent for all firms and ranged from 12.9% for
large firms to 6.3% for small firms. Highly profitable firms had an average return on assets of
21.5%.

Return on Net Worth. This is the most comprehensive measure of profitability and 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. It was calculated as the ratio of
net income to net worth. Return on net worth averaged 18.4% for all firms and ranged from
21.8% for large firms to 11.7% for small firms. Highly profitable firms averaged 34.5% rate of
return on net worth.


Table 7. Net returns and profitability for Florida cut foliage businesses, 1996.


Measure All FLarge Medium Small Highly
Measure All Firms Firms Firms Firms Profitable
Firms Firms Firms
Firms
Net Income: total income less total costs
except management's compensation 127 256 88 31 333
(thousands $)
Net Margin: ratio of net income to total 10.8% 10.4% 12.8% 10.0% 17.4%
income
Return on Assets: ratio of net income to 11.1% 12.9% 9.5% 6.3% 21.5%
total assets
Return on Net Worth: ratio of net income 18.4% 21.8% 14.1% 11.7% 34.5%
to net worth____









Net Returns and Profitability


Net Income. This measure is simply the difference between total income and total costs
except management's (owners') compensation. Net firm income averaged $127K for all
firms and ranged from $256K for large firms to $31K for small firms (Table 7). Net income
was $333K for highly profitable firms.

Net Margin. Net margin is the ratio between net income and total income or, in other words,
the share of total income that is net income. Net margin averaged 10.8% for all firms and
was remarkably consistent across firm size groups, ranging from 10.0% for small firms to
12.8% for medium-sized firms. Highly profitable firms had net margins averaging 17.4%.

Return on Assets. This measure was calculated by dividing net income by the value of total
assets. Return on assets averaged 11.1% percent for all firms and ranged from 12.9% for
large firms to 6.3% for small firms. Highly profitable firms had an average return on assets of
21.5%.

Return on Net Worth. This is the most comprehensive measure of profitability and 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. It was calculated as the ratio of
net income to net worth. Return on net worth averaged 18.4% for all firms and ranged from
21.8% for large firms to 11.7% for small firms. Highly profitable firms averaged 34.5% rate of
return on net worth.


Table 7. Net returns and profitability for Florida cut foliage businesses, 1996.


Measure All FLarge Medium Small Highly
Measure All Firms Firms Firms Firms Profitable
Firms Firms Firms
Firms
Net Income: total income less total costs
except management's compensation 127 256 88 31 333
(thousands $)
Net Margin: ratio of net income to total 10.8% 10.4% 12.8% 10.0% 17.4%
income
Return on Assets: ratio of net income to 11.1% 12.9% 9.5% 6.3% 21.5%
total assets
Return on Net Worth: ratio of net income 18.4% 21.8% 14.1% 11.7% 34.5%
to net worth____









Net Returns and Profitability


Net Income. This measure is simply the difference between total income and total costs
except management's (owners') compensation. Net firm income averaged $127K for all
firms and ranged from $256K for large firms to $31K for small firms (Table 7). Net income
was $333K for highly profitable firms.

Net Margin. Net margin is the ratio between net income and total income or, in other words,
the share of total income that is net income. Net margin averaged 10.8% for all firms and
was remarkably consistent across firm size groups, ranging from 10.0% for small firms to
12.8% for medium-sized firms. Highly profitable firms had net margins averaging 17.4%.

Return on Assets. This measure was calculated by dividing net income by the value of total
assets. Return on assets averaged 11.1% percent for all firms and ranged from 12.9% for
large firms to 6.3% for small firms. Highly profitable firms had an average return on assets of
21.5%.

Return on Net Worth. This is the most comprehensive measure of profitability and 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. It was calculated as the ratio of
net income to net worth. Return on net worth averaged 18.4% for all firms and ranged from
21.8% for large firms to 11.7% for small firms. Highly profitable firms averaged 34.5% rate of
return on net worth.


Table 7. Net returns and profitability for Florida cut foliage businesses, 1996.


Measure All FLarge Medium Small Highly
Measure All Firms Firms Firms Firms Profitable
Firms Firms Firms
Firms
Net Income: total income less total costs
except management's compensation 127 256 88 31 333
(thousands $)
Net Margin: ratio of net income to total 10.8% 10.4% 12.8% 10.0% 17.4%
income
Return on Assets: ratio of net income to 11.1% 12.9% 9.5% 6.3% 21.5%
total assets
Return on Net Worth: ratio of net income 18.4% 21.8% 14.1% 11.7% 34.5%
to net worth____









Balance Sheet and Financial Ratios


Assets and liabilities were taken to represent the mid-year financial position of firms,
calculated as an average of beginning and.ending balance sheet values, as summarized in
Table 8.

Assets. Total assets averaged $1.15M for all firms and ranged from $1.99M for large firms
to $482K for small firms (Table 8). Current assets, including cash on hand, accounts
receivable, and plant and supply inventories, averaged $534K for all firms and ranged from
$;998K for large firms to $168K for small firms. Long-term assets, including investments in
buildings, machinery, land and accumulated depreciation, averaged $613K for all firms and
ranged from $991K for large firms to $314K for small firms.

Liabilities. Total liabilities averaged $456K for all firms and ranged from $814K for large
firms to $222K for small firms. Current liabilities, including accounts payable and other
liabilities payable within one year, averaged $79K for all firms and ranged from $196K for
large firms to $14K for small firms. Long-term liabilities, including notes payable and
mortgages, averaged $377K for all firms and ranged from $618K for large firms to $207K for
small firms.

Not Worth. Net worth or equity is the difference between total assets and total liabilities and
represents the value of the owners' share of assets. Net worth averaged $691K for all firms
and ranged from $1.17M for large firms to $260K for small firms.


Table 8. Assets, liabilities and net worth for Florida cut foliage businesses, 1996.
All values in thousands dollars.

Large Medium Small Highly
All Firms Profitable
Firms Firms Firms ra
Firms
Current Cash on Hand 35 54 46 7 36
Assets Accounts receivable 108 230 63 25 170
Plant inventory value 375 684 300 128 513
Supply inventory value 16 30 9 8 24
Total CURRENT Assets 534 998 417 168 744
Long Term Land 348 546 320 174 447
Assets* Machinery & Equipment 192 344 151 75 299
Buildings & Fixtures 520 899 431 216 670
Accumulated Depreciation (448) (799) (383) (151) (611)
Total LONG TERM Assets 613 991 518 314 803
TOTAL ASSETS 1,147 1,988 935 482 1,547
Liabilities Current Liabilities 79 196 16 14 162
Long Term Liabilities 377 618 293 207 418
Total LIABILITIES 456 814 309 222 580
NET WORTH 691 1,174 626 260 967
Long term assets valued at cost









Balance Sheet and Financial Ratios


Assets and liabilities were taken to represent the mid-year financial position of firms,
calculated as an average of beginning and.ending balance sheet values, as summarized in
Table 8.

Assets. Total assets averaged $1.15M for all firms and ranged from $1.99M for large firms
to $482K for small firms (Table 8). Current assets, including cash on hand, accounts
receivable, and plant and supply inventories, averaged $534K for all firms and ranged from
$;998K for large firms to $168K for small firms. Long-term assets, including investments in
buildings, machinery, land and accumulated depreciation, averaged $613K for all firms and
ranged from $991K for large firms to $314K for small firms.

Liabilities. Total liabilities averaged $456K for all firms and ranged from $814K for large
firms to $222K for small firms. Current liabilities, including accounts payable and other
liabilities payable within one year, averaged $79K for all firms and ranged from $196K for
large firms to $14K for small firms. Long-term liabilities, including notes payable and
mortgages, averaged $377K for all firms and ranged from $618K for large firms to $207K for
small firms.

Not Worth. Net worth or equity is the difference between total assets and total liabilities and
represents the value of the owners' share of assets. Net worth averaged $691K for all firms
and ranged from $1.17M for large firms to $260K for small firms.


Table 8. Assets, liabilities and net worth for Florida cut foliage businesses, 1996.
All values in thousands dollars.

Large Medium Small Highly
All Firms Profitable
Firms Firms Firms ra
Firms
Current Cash on Hand 35 54 46 7 36
Assets Accounts receivable 108 230 63 25 170
Plant inventory value 375 684 300 128 513
Supply inventory value 16 30 9 8 24
Total CURRENT Assets 534 998 417 168 744
Long Term Land 348 546 320 174 447
Assets* Machinery & Equipment 192 344 151 75 299
Buildings & Fixtures 520 899 431 216 670
Accumulated Depreciation (448) (799) (383) (151) (611)
Total LONG TERM Assets 613 991 518 314 803
TOTAL ASSETS 1,147 1,988 935 482 1,547
Liabilities Current Liabilities 79 196 16 14 162
Long Term Liabilities 377 618 293 207 418
Total LIABILITIES 456 814 309 222 580
NET WORTH 691 1,174 626 260 967
Long term assets valued at cost









Balance Sheet and Financial Ratios


Assets and liabilities were taken to represent the mid-year financial position of firms,
calculated as an average of beginning and.ending balance sheet values, as summarized in
Table 8.

Assets. Total assets averaged $1.15M for all firms and ranged from $1.99M for large firms
to $482K for small firms (Table 8). Current assets, including cash on hand, accounts
receivable, and plant and supply inventories, averaged $534K for all firms and ranged from
$;998K for large firms to $168K for small firms. Long-term assets, including investments in
buildings, machinery, land and accumulated depreciation, averaged $613K for all firms and
ranged from $991K for large firms to $314K for small firms.

Liabilities. Total liabilities averaged $456K for all firms and ranged from $814K for large
firms to $222K for small firms. Current liabilities, including accounts payable and other
liabilities payable within one year, averaged $79K for all firms and ranged from $196K for
large firms to $14K for small firms. Long-term liabilities, including notes payable and
mortgages, averaged $377K for all firms and ranged from $618K for large firms to $207K for
small firms.

Not Worth. Net worth or equity is the difference between total assets and total liabilities and
represents the value of the owners' share of assets. Net worth averaged $691K for all firms
and ranged from $1.17M for large firms to $260K for small firms.


Table 8. Assets, liabilities and net worth for Florida cut foliage businesses, 1996.
All values in thousands dollars.

Large Medium Small Highly
All Firms Profitable
Firms Firms Firms ra
Firms
Current Cash on Hand 35 54 46 7 36
Assets Accounts receivable 108 230 63 25 170
Plant inventory value 375 684 300 128 513
Supply inventory value 16 30 9 8 24
Total CURRENT Assets 534 998 417 168 744
Long Term Land 348 546 320 174 447
Assets* Machinery & Equipment 192 344 151 75 299
Buildings & Fixtures 520 899 431 216 670
Accumulated Depreciation (448) (799) (383) (151) (611)
Total LONG TERM Assets 613 991 518 314 803
TOTAL ASSETS 1,147 1,988 935 482 1,547
Liabilities Current Liabilities 79 196 16 14 162
Long Term Liabilities 377 618 293 207 418
Total LIABILITIES 456 814 309 222 580
NET WORTH 691 1,174 626 260 967
Long term assets valued at cost









Balance Sheet and Financial Ratios


Assets and liabilities were taken to represent the mid-year financial position of firms,
calculated as an average of beginning and.ending balance sheet values, as summarized in
Table 8.

Assets. Total assets averaged $1.15M for all firms and ranged from $1.99M for large firms
to $482K for small firms (Table 8). Current assets, including cash on hand, accounts
receivable, and plant and supply inventories, averaged $534K for all firms and ranged from
$;998K for large firms to $168K for small firms. Long-term assets, including investments in
buildings, machinery, land and accumulated depreciation, averaged $613K for all firms and
ranged from $991K for large firms to $314K for small firms.

Liabilities. Total liabilities averaged $456K for all firms and ranged from $814K for large
firms to $222K for small firms. Current liabilities, including accounts payable and other
liabilities payable within one year, averaged $79K for all firms and ranged from $196K for
large firms to $14K for small firms. Long-term liabilities, including notes payable and
mortgages, averaged $377K for all firms and ranged from $618K for large firms to $207K for
small firms.

Not Worth. Net worth or equity is the difference between total assets and total liabilities and
represents the value of the owners' share of assets. Net worth averaged $691K for all firms
and ranged from $1.17M for large firms to $260K for small firms.


Table 8. Assets, liabilities and net worth for Florida cut foliage businesses, 1996.
All values in thousands dollars.

Large Medium Small Highly
All Firms Profitable
Firms Firms Firms ra
Firms
Current Cash on Hand 35 54 46 7 36
Assets Accounts receivable 108 230 63 25 170
Plant inventory value 375 684 300 128 513
Supply inventory value 16 30 9 8 24
Total CURRENT Assets 534 998 417 168 744
Long Term Land 348 546 320 174 447
Assets* Machinery & Equipment 192 344 151 75 299
Buildings & Fixtures 520 899 431 216 670
Accumulated Depreciation (448) (799) (383) (151) (611)
Total LONG TERM Assets 613 991 518 314 803
TOTAL ASSETS 1,147 1,988 935 482 1,547
Liabilities Current Liabilities 79 196 16 14 162
Long Term Liabilities 377 618 293 207 418
Total LIABILITIES 456 814 309 222 580
NET WORTH 691 1,174 626 260 967
Long term assets valued at cost












Leverage. This measure expresses the ratio between total liabilities and net worth, 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 0.66 for all firms and ranged
from 0.49 for medium firms to 0.85 for small firms (Table 9). Generally, leverage factors
below 1.0 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.

Quick Ratio. The quick ratio is a measure of a firm's ability to meet short-term debts. It was
calculated by dividing cash and accounts receivable by current liabilities. 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 1.82 for all firms and ranged from 1.45 for large firms to 6.55 for medium firms.
Highly profitable firms had significantly lower quick ratios (1.27).




Table 9. Financial ratios for Florida cut foliage businesses, 1996.

Large Medium Small Highly
Ratio All Firms Firms Firms Firms rofitable
Firms
Current Ratio (Cash on Hand/Current Liabilities) 0.44 0.28 2.76 0.49 0.22
Quick Ratio (Cash & Accounts 1.82 1.45 6.55 2.24 1.27
Receivable/Current Liabilities)
Asset/Debt Ratio (Total Assets/Total Liabilities) 2.51 2.44 3.02 2.18 2.67
Current to Long Term Liabilities 0.21 0.32 0.06 0.07 0.39
Accounts Receivable/Sales 0.17 0.19 0.13 0.12 0.21
Asset Depletion (Current Value/Original Cost Long 0.58 0.55 0.57 0.68 0.57
Term Assets)
Asset Turnover Ratio (Sales/Total Assets) 1.03 1.24 0.74 0.64 1.24
Leverage Factor (Total Liabilities/Net Worth) 0.66 0.69 0.49 0.85 0.60












Leverage. This measure expresses the ratio between total liabilities and net worth, 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 0.66 for all firms and ranged
from 0.49 for medium firms to 0.85 for small firms (Table 9). Generally, leverage factors
below 1.0 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.

Quick Ratio. The quick ratio is a measure of a firm's ability to meet short-term debts. It was
calculated by dividing cash and accounts receivable by current liabilities. 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 1.82 for all firms and ranged from 1.45 for large firms to 6.55 for medium firms.
Highly profitable firms had significantly lower quick ratios (1.27).




Table 9. Financial ratios for Florida cut foliage businesses, 1996.

Large Medium Small Highly
Ratio All Firms Firms Firms Firms rofitable
Firms
Current Ratio (Cash on Hand/Current Liabilities) 0.44 0.28 2.76 0.49 0.22
Quick Ratio (Cash & Accounts 1.82 1.45 6.55 2.24 1.27
Receivable/Current Liabilities)
Asset/Debt Ratio (Total Assets/Total Liabilities) 2.51 2.44 3.02 2.18 2.67
Current to Long Term Liabilities 0.21 0.32 0.06 0.07 0.39
Accounts Receivable/Sales 0.17 0.19 0.13 0.12 0.21
Asset Depletion (Current Value/Original Cost Long 0.58 0.55 0.57 0.68 0.57
Term Assets)
Asset Turnover Ratio (Sales/Total Assets) 1.03 1.24 0.74 0.64 1.24
Leverage Factor (Total Liabilities/Net Worth) 0.66 0.69 0.49 0.85 0.60









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.

I-odges, A.W., J.J. Haydu and P.J. van Blokland. 1996. Adaptation to competition and
stnrctural 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. Published by the International Society for Horticultural Science, Belgium.

-lodges, A.W., L.N. Satterthwaite and J.J. Haydu. 1997. Business Analysis of Ornamental
Plant Nurseries in Florida, 1995. Economic Information Report EIR97-3. University of
Florida, Food & Resource Economics Department, Gainesville.

National Agricultural Statistics Service. 1997. Floricultural Crops 1996 Summary. Sp Cr 6-
1(97). Washington, D.C.

Smith, S.A., T.G. Taylor and L. Loadholtz. 1988. Cost of production for leatherleaf ferns in
Florida, 1987-88. Staff Paper 342. University of Florida, Food & Resource Economics
Department, Gainesville.

Stamps, R.H. and C.A. Conover. 1986. Cut foliage production in Florida. HortScience
21(2):177-178, 343.










APPENDIX
Florida Cut Foliage Business Analysis Worksheet

With information requested by this form, the University of Florida will perform an analysis of your
firm, and provide you with a report comparing your business with averages for similar firms in the
program. This analysis will include efficiency indicators for use of land (space), labor and capital, costs
of production, net income, financial position and profitability. Your 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 Satterthwaite, Statistician
University of Florida, Institute of Food and Agricultural Sciences
Central Florida Research and Education Center- Apopka
2807 S. Binion Rd.
Apopka, FL 32703-8504
tel: 407/884-2034; fax: 352/392-9359
e-mail: LNS@icon.apk.ufl.edu


1 General Information

Firm Name Fiscal Year
Owner/Contact Person Month Ended
Location/Street Address County
City Zip Telephone (

Today's date

1a. Crops Grown (percentage of sales): % leatherleaf
% tree fem

other (please specify crops and percentages below)










2. Income

A. Total crop sales ......................................... $

By month or quarter

Jan $ Apr $ July $ Oct $

Feb $ May $ Aug $ Nov $

Mar $ June $ Sep $ Dec $

Qtr $ Qtr $ Qtr $ Qtr $


B. Value of crops resold from outside purchases'

C. Value of crop from off-site production' .......

D. Miscellaneous income ..................


. . . . . $

. . . . . $

................. $


3. PIscal Year Information


Beginning Balance


Ending Balance


A. Value of Supplies in Inventory .............

B. Value of Plants in Inventory2 (includes cooler)

C. Original Cost of Land Owned ..............

D. Current Assets, including Accounts Receivable3

E. Cash on Hand ..........................

F. Current Liabilities, including Accounts Payable .

G. Long-Term Debt4 .......................


4. Current Market Value of Leased Property5

Beginning Balance Ending Balance

A. Current Value of Land Leased ............. $ $

B. Value of Machinery and Equipment Leased ... $ $

C. Value of Buildings/Installations Leased ....... $ $

This amount will be deducted from total sales to give net company-produced crop sales. Outside purchases are from other growers;
off-site production means owned, but not included in acreage or expenses. Fill these out only if included in total sales (2A).
2 Plant inventory valued at wholesale price, adjusted for percentage of completion of crops in production. For example, if fernery has
even turnover, inventory averages 50% finished, so inventory value would be the wholesale price discounted 50%.
3 Current assets less cash on hand, item E.
4 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.
5 Ass ts 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).










5. Production Area
Enter acreage in use at beginning and end of fiscal year for:
Beginning of Year Ending of Year

A. Total farm area (owned & leased)6 ............

B. Production area (shade & hammock)7 ..........

C. Acreage renovated this year ...............




6. Capital Assets and Depreciation8
Original Cost Accumulated Depreciation
Depreciation this year

A. Machinery & Equipment9 ...... $ $ $

B. Buildings & Installations1 ...... $ $ $

Total ........................ $ $ $




7. Work Time"
Total Payroll Hours or Full-time Equivalents

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

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

Total .................................___



6 All area used for femery, including roads, offices, packing sheds and parking, as well as growing areas.
7 Net growing area, excluding driveways, walkways, and other non-productive space. Use the facing page as a workspace for listing,
if needed.
a 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.
9 Equipment used specifically for business operations. If unsure about proper category for any item, please list it on the facing page.
10 Includes land improvements, wells, irrigation, fences, paving, office furniture and office equipment, as well as buildings.
" Enter total hours for all workers, including casual labor, part-time 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. Expenses12
A. Operator's salary or time value'3 ..............................$ $
B. Employees' salaries, wages, payroll taxes, and benefits ............. $


production wages


others (salaried)


sales commissions


health insurance


FICA


unemp. taxes


workman's comp.


C. Plants and seeds for growing ...................
D. Fuel for production ...........................
E. Fertilizer ..................................
F. Lime .....................................
G. Herbicides .................................
H. Fungicides ..................................
I. Insecticides ................................
J. Nematicides ................................
K. Other chemicals .............................
L. Packing & shipping supplies ....................


M. Other production supplies (ties, plastic, small tools)


. . . . $


Facility repairs & maintenance (including shadehouse plastic) ..
Vehicle & equipment operating costs (including insurance & tags)
Travel, trade shows & entertainment ......................
Insurance (property & liability, not employee or vehicle related) .


. . $
. . $
. . $
. . $


R. Communications (telephones, fax, radios) ...................... $
S. Electric power ........................................... $
T. Taxes (property, not sales), licenses, bonds ................... $
U. Advertising .............................................. $
V. Rent (land & buildings) .................................... $
W. Interest ............................................. $
X. Other (itemize below, if available) ............................. $


bank charges ......
dues & subscriptions
freight ............
miscellaneous ....


$
$
$
$
$


postage .............
professional services ..
office supplies .......
waste removal ......


2 A detailed statement of expenses may be submitted in lieu of filling-out this section.
3 This should reflect total value of compensation to owners) and/or managerss.


other