-/J. Robert Strain
Alan W. Hodges

Economic Information
Report 242r

Business Analysis of Foliage Plant
Nurseries in South Florida, 1986

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

December 1987

b....

ABSTRACT

Average sales, costs and returns information are presented for 27
wholesale foliage plant nurseries in South Florida for the tax year of
1986. Average value of plant sales was $1,233,590. Cash costs
including a return to the operator averaged $1,107,575. Non-cash costs
and allowances including a 12 percent return on investment amounted to
another $247,497. Deducting the return to operator and return on
investment left total costs of $1,102,816. After adjustments for
change in plant inventory value and additions for miscellaneous income,
net nursery income averaged $283,308, and return to capital averaged
13.97 percent. Comparable information is presented also for the
average of the nine largest and eight smallest nurseries in the study.

KEY WORDS: Foliage nursery business analysis, income, costs,
investment, efficiency measures, South Florida.

ACKNOWLEDGEMENTS

This report was made possible by the cooperating 27 foliage plant
nursery operators who made available their production and accounting
records on a confidential basis for analysis and averaging. Assistance
and encouragement were supplied by Extension Ornamental Horticultural
Agents Loretta Hodyss DeArmand Hull and Bill Schall. Acknowledgement
and appreciation of the help received, however, does not alter the fact
that errors in the data or in the interpretation of the information
presented herein are the sole responsibility of the authors.

TABLE OF CONTENTS
Page
ABSTRACT . . . . . . . . i
ACKNOWLEDGEMENTS . . . ... . .
LIST OF TABLES ........ . . . . .. iii
LIST OF FIGURES. . . . .... . . iv
INTRODUCTION . . . . . . .. 1
PROCEDURE. ................... ...... . .. 1
DEFINITIONS. . . . . ... . . .. 3
DATA AND RESULTS . . . . . 4
Size of Business . . . .... .... 4
Rates of Production. . . . . 6
Labor Efficiency . . ... ........ . 7
The Use of Space ...... . . 8
Efficiency in the Use of Capital .......... . 10
Dollar Costs by Expense Category*. . . .. . 12
Percent of Total Costs by Expense Category* . . . 14
Cost Per Square Foot of Total Bed and Bench Space* . . .. 16
Cost Per Square Foot of Propagating and Finishing Space* . 18
Cost Per Dollar of Sales Adjusted for Inventory Change* . ... 20
Cost Per Dollar of Sales* . . . . .. 22
Income Summary . . . . .. . .24
Total Gain . . . .... ... 24
Net Nursery Income . . . . . 24
Return to Capital. . . . . . . 24
Balance Sheet. . . . . . . .. 26
Current Assets . . . . . . 26
Long Term Assets . . . . . . 26
Total Assets . . . . . . 27
Liabilities. . . . . . . .. 27
Net Worth. . . . . . . .. 28
Total Profitability Model . . . . . 28
Margin Management. . . . . . 28
Asset Management . . . . . .. 28
Leverage Management . . . . . 28
Factors Associated With Level of Profits . . . .. .. 30
Size of Business . . . . . . 30
Production Rate . . . . . .. 30
Labor Efficiency . . . . . . 32
Space Use Efficiency . . . . . .. 32
Use of Capital . . . . . . 33
Level of Costs . . . . . . 33
Cost Efficiency. . . . . ... . .. 34
Range of Figures . .. . .. .. .. .. 34
Seasonality of sales .............. .. . 35
CONCLUDING COMMENTS . . . . . . .. 36

*These sections also contain the following subcategories:
Salaries and Wages
Production Supplies Total Cash Costs
Other Production Costs Non-cash costs
Administrative and Overhead Total all costs

LIST OF TABLES

Table Page
1 Size of business, 27 wholesale foliage plant nurseries in
South Florida, 1986. .............. . ... 5

2 Rates of production, 27 wholesale foliage plant nurseries in
South Florida, 1986. . . .... ... . 6

3 Labor efficiency, 27 wholesale foliage plant nurseries in
South Florida, 1986. ...... . . . 7

4 The use of space, 27 wholesale foliage plant nurseries in
South Florida, 1986. . . .... .. . . .. 9

5 Efficiency in the use of capital,
27 wholesale foliage plant nurseries in South Florida, 1986. 11

6 Dollar costs by expense category,
27 wholesale foliage plant nurseries In South Florida, 1986. 13

7 Percent of total costs by expense category,
27 wholesale foliage plant nurseries in South Florida, 1986. 15

8 Costs per square foot of total bed and bench space,
27 wholesale foliage plant nurseries in South Florida, 1986. 17

9 Costs per square foot of propagating and finishing space,
27 wholesale foliage plant nurseries in South Florida, 1986. 19

10 Costs per dollar of sales adjusted for change in plant inventory,
27 wholesale foliage plant nurseries in South Florida, 1986. 21

11 Cost per dollar of sales (no adjustment for change in plant inven-
tory), 27 wholesale foliage plant nurseries in South Florida, 1986. 23

12 Income summary, 27 wholesale foliage plant nurseries in
South Florida, 1986. . .... .. . . ..... 25

13 Balance sheet, 27 wholesale foliage plant nurseries in
South Florida, 1986 . . . . . 27

14 Factors associated with level of profit, 27 wholesale
foliage plant nurseries in South Florida, 1986. . ... 31

15 Range of figures on factors associated with level of profit,
27 wholesale foliage plant nurseries in South Florida, 1986. 35

LIST OF FIGURES

Figure Page
1 Total profitability model, 27 wholesale foliage plant nurseries in
South Florida, 1986 .. .. .. .. .. ... 29

2 Monthly sales compared to average monthly costs, 27 wholesale
foliage plant nurseries in South Florida, 1986 .. . .... 37

BUSINESS ANALYSIS OF FOLIAGE PLANT NURSERIES IN SOUTH FLORIDA, 1986

J. Robert Strain and Alan Hodges

INTRODUCTION

This publication contains information on sales, costs, returns and produc-
tion efficiency for foliage plant nurseries in South Florida for 1986. Other
publications in this series include reports on Central Florida foliage plant
nurseries, Dade county foliage plant nurseries, Florida flowering plant
nurseries, Florida container grown ornamental plant nurseries and Florida field
grown ornamental plant nurseries.
The Florida nursery business series was initiated in the mid-1960's.
Purposes of the nursery business analysis series include:
1) Furnishing nursery operators with various physical and economic measures
that may be used in evaluating the efficiency of individual nurseries;
2) Supplying cooperating nursery operators with data so that they may make
more informed management decisions;
3) Providing individuals considering entering the wholesale plant produc-
tion business with an estimate of input requirements and revenue potential; and
4) Providing Florida Extension personnel with data for conducting educa-
tional programs with nursery operators.

PROCEDURE

The information and averages presented in this report are based on data
supplied by 27 nursery operators in the form of confidential production and
accounting records. Their nurseries are located in the South Florida counties
of Dade, Broward, and Palm Beach. They participated in the program voluntarily
and do not represent a .statistically selected sample. In fact, the nursery

J. ROBERT STRAIN is an extension economist and professor, and ALAN HODGES
is a research assistant, both in IFAS Food and Resource Economics Department,
University of Florida, Gainesville.

operators participating in the Florida Nursery Business Analysis Program are
thought to represent some of the more efficient foliage plant nurseries in South
Florida, rather than being typical of the foliage plant nursery industry.
Data were collected for the 1986 tax year. In some cases, data were
received for a fiscal year that did not coincide with the 1986 calendar year.
Data for fiscal years ending after July 1, 1985 and up to June 30, 1987 were
included with the 1986 calendar year data.
Not all nursery operators drew a regular salary from their operation. In
these instances, an estimate of the value of the time of the operator was col-
lected and used in the analysis in order to provide a more equitable basis for
comparing data. For the same reason, interest expense paid by the individual
nursery operator was excluded from the costs listed in this report. Instead, an
interest charge for the total owned investment was calculated at the rate of 12
percent per year and Included as a non-cash cost allowance.
The value of owned capital or investment in the nursery reflects the depre-
ciated book value of buildings, improvements, machinery and equipment. This is
a total value; related debt is not deducted in determining this value of capital
owned. Growing plants also are Included as a part of the owned capital
investment, but at a value lower than the regular wholesale price. This is
because, in a normal growing operation, most of the plants in inventory are not
of a salable size. Some will barely be started, some ready to sell, and others
distributed in between. A common practice is to value all plants, whether just
started or almost finished at 50 percent of their wholesale price if finished.
However, some nursery operators use other methods. For this report, the values
received from the nursery operators were the values used. Land included in
owned capital investment was valued at the original purchase price. While this
may not represent the Investment of a nursery operator if he or she were to buy
the land in 1986, it does represent the investment actually involved in the
operation.
The data from individual nurseries are averaged and presented in tablular
form. The tables present average values for all 27 nurseries, for approximately
the "largest" third of the nurseries (nine), and the "smallest" third of the
nurseries (eight). The largest nurseries had plant sales valued at $800,000 or
more. The smallest nurseries had less than $300,000.

DEFINITIONS

In general, the terms used in this report are thought to be self explana-
tory. However, experience indicates that some of the terms used here are less
1

familiar than others.

They are defined as follows, and again later where they

are used:

Value of own plants sold: the value of total plant sales minus the cost of
plants purchased for Immediate resale. The cost of plants purchased for grow-
ing-on are not deducted.

Fulltime equivalent employee: the equivalent of one person paid for 2080
hours a year (40 hours a week for 52 weeks a year including vacation time, if
any). The most common method for obtaining the number of fulltime employees
for this report was to divide the total annual payroll hours for the nursery by
2080, and then add on the number of family and management people not paid on an
hourly basis.

Capital owned: the current value (cost after adjusting for depreciation
taken in prior years) of capital assets, or current investment in the nursery
*operation. Related debt is not deducted in this determination of current value
.of capital owned.

Capital managed: the sum of capital owned plus the value of additional
capital items used and under the control of the manager. The value of rented
land and leased buildings, equipment, etc., would be added to the value of
capital owned to obtain the value of capital managed in the nursery operation.

Annual turnover of capital: the percentage that results from dividing
value of own plant sold by the value of capital (either owned or managed).
*is annual plant sales stated in terms of percent of the capital involved.

the
It

Total gain: the sum of plant sales,
ries, and miscellaneous cash income.
year's operation, be it in the form of
in values of inventories.

changes in plant and supply invento-
It represents the total effect of the
cash received or in the form of change

Net nursery income: the net effect of the year's
all cash costs (except operator's salary), and all
interest on capital) are subtracted from total gain.
for the time and managerial skills of the operator,
capital invested in the operation.

operation. To obtain it,
non-cash costs (except
The result is the return
and for the use of the

Return to capital: the portion of net nursery income that is left after
subtracting the salary or time value of the operator. It is what the owned
capital earned.

Rate of return on capital: return to capital divided by the value of owned
capital. It is the rate earned on the capital invested.

DATA AND RESULTS

The data in the first 11 tables present various size and efficiency mea-
sures. Data in Tables 12 through 15 relate to the profitability of nurseries.
In the first five tables, more than one measure of efficiency is used. The
first item in each table has traditionally been presented as "The one best
measure." It is followed by other measures that also should be useful.
Readers may enter their own data in the blank columns for comparison with the
appropriate industry average. Throughout the manuscript, where information is
presented in tables, arithmetic inconsistencies from rounding may be noted.

Size of Business (Table 1)

Size of business data in Table 1 are basic information. When combined with
cost data in Table 6, they provides the nursery operator most of the data required
for developing the remaining tables in this report.
For size of business, the one best measure selected was "Value of own plants
sold" (Table 1 item A). In other words, this is income from the sale of the
plants grown in the nursery. This averaged $1,233,590 for the 27 nurseries.
For the nine largest nurseries, it was $3,097,396 or two and a half times the
average. The smallest ones had $111,193, or about nine percent of the average.
Adjusting sales for change in value of plant inventory (Table 1 item B) did not
alter materially these relationships.
Total bed and bench space (Table 1C) averaged 857,931 square feet. The
largest nurseries had 2,108,874 square feet, or 2.46 times the average. The
smallest firms had a tenth of the average (87,449 square feet).
Workers (Table 1H) averaged 30.16 per nursery. The largest nurseries
averaged 71.20 persons while the smallest nurseries averaged 5.65 people.
Capital owned (Table 1P) averaged $1,579,002 for the 27 nurseries. For the
nine largest nurseries, it was $3,552,858, or 2.25 times the average. The eight
smallest nurseries had $228,667 or 14 percent of the average.
Capital managed (Table 1X) averaged $1,841,805 or 17 percent more than the
capital owned by the nursery operators. This difference was primarily in the
value of rented or leased land. For the nine largest nurseries, it was
$4,246,590 or 19.5 percent more than they owned. The eight smallest nurseries
managed 25 percent more than the capital owned, or $286,276. For these groups,
the difference was also in the value of rented or leased land.

Table 1.--Size of business, 27 wholesale foliage plant
Florida, 1986.

nurseries in South

Item Unit Average Average Average Your
all 27 9 largest 8 smallest nursery
The one best measure
A Value of own plants sold(a) $ 1,233,590 3,097,396 111,193
Other useful Indicators of size

Value of own plants sold
B adjusted for change in .
plant inventory value

C Total bed & bench space.

D Propagating & finishing
bed 6 bench space .

E Stock plant bed &
bench space . .

F Total nursery area .
G Total nursery area .

H Average fulltime
Equivalent employees(b).

Capital owned(c) in:
; I Growing plants . .
J Buildings, fences, wells .
K Machinery & equipment. .
L Land . . .
1M Supplies . . .
N Accounts receivable .
e0 Cash/checkbook balance .
P Total owned capital .

Capital managed(d) in:
Q Growing plants . .
R Buildings, fences, wells .
S Machinery & equipment. .
T Land . . .
U Supplies . . .
V Accounts receivable .
W Cash/checkbook balance .
X Total managed capital .

$ 1,373,527

sq ft

sq ft

sq ft

sq ft
acres

number

3,369,626

857,931 2,108,874

806,316 1,986,053

51,615 122,821

1,136,147
26.08

30.16

731,595
368,013
57,863
206,795
14,151
160,865
39,721
1,579,002

731,595
368,305
59,681
467,487
14,151
160,865
39,721
1,841,805

2,738,347
62.86

71.20

1,551,200
882,827
146,323
418,324
27,232
431,160
95,791
3,552,858

1,551,200
882,827
150,334
1,108,046
27,232
431,160
95,791
4,246,590

148,451

87,449

77,449

10,000

168,816
3.88

5.65

81,540
58,097
18,249
44,062
5,829
8,430
12,459
228,667

81,540
59,082
19,874
99,062
5,829
8,430
12,459
286,276

(a) Value of own plants sold--is the value of total plant sales minus the
cost of plants purchased for immediate resale. The cost of plants purchased for
growing-on is not deducted.
(b) Fulltime equivalent employee--Is the equivalent of one person paid 2080
hours (40 hours a week for 52 weeks a year including paid vacation time, if any).
(c) Capital owned--is the current value (original cost less depreciation
taken) of capital assets, or current investment in the nursery operation. Re-
lated debt is not deducted in this determination of the value of capital owned.
(d) Capital managed--is the sum of capital owned plus the value of addition-
al capital items used and under the control of the manager (e.g., rented land).

Rates of Production (Table 2)

"Value of own plants sold per square foot of total bed and bench space"
(Table 1 item A divided by item C) is the traditional rate of production measure
used among nurseries. The average value for the 27 nurseries was $1.44. For
the nine largest nurseries, It was $1.47, or three cents more than the average.
The eight smallest nurseries had 1.27, or about 88 percent of the average sales
per square foot of bed and bench space. When sales were adjusted for change in
inventory value (Table 1 item B divided by item C), average value per square
foot increased 16 cents (11 percent), while the smallest nurseries increased 43
cents (a third) in value per square foot.
Sales per square foot of propagating and finishing space (Table 1A divided
by ID) is a more accurate indicator of growing efficiency. Output from stock
plant areas may reduce costs, but pay no bills unless cuttings are sold. It is
the plants grown on the propagating and finishing space that pay the bills for
the entire nursery operation. This amounted to $1.53 per square foot for the 27
nurseries. For the nine largest nurseries, it was $1.56, or three cents more
than the average. The eight smallest nurseries had $1.44 which was nine cents
less than the average.

Table 2.--Rates of production, 27 wholesale foliage plant nurseries in South
Florida, 1986.
r~~--r~3x~rr~'tsomor----------n~
Item Unit Average Average Average Your
all 27 9 largest 8 smallest nursery
The one best measure
Value of own plants sold per
sq ft of total bed & bench
space - (Table 1A/1C) $ 1.44 1.47 1.27
Other useful indicators
Value of own plants sold per
sq ft adjusted for inventory
change - (Table 1B/1C) $ 1.60 1.60 1.70

Value of own plants sold per
sq ft of propagating & fin-
ishing space (Table 1A/1D) $ 1.53 1.56 1.44
--- adjusted for inventory
change - (Table 1B/1D) $ 1.70 1.70 1.92

Value of own plants sold per
acre - (Table 1A/1G) $ 47,296 49,272 28,691
--- adjusted for inventory
change - (Table 1B/1G) $ 52,661 53,602 38,305

-------- ~=r~==------- --- 2=== ---

Labor Efficiency (Table 3)

"Value of own plants sold per employee" (Table 1A divided by 1H) was selec-
ted as the one best measure of labor efficiency. This averaged $40,898 per
employee for the 27 nurseries. For the nine largest nurseries, sales averaged
$45,503, or six percent more than the average. The eight smallest nurseries had
$19,680 in sales per employee, or 48 percent of the average. Adjusting for
change in plant Inventory value (Table 1B divided by 1H) slightly Increased the
average for all 27 nurseries to $45,537. For the nine largest nurseries, this
increased their sales per person to $47,326. The smallest nurseries were up to
$26,274 per person.
Total bed and bench space per employee (Table 1C divided by 1H) averaged
28,443 square feet. For the nine largest nurseries, it was 29,619 square feet,
or four percent more than the average. The eight smallest nurseries had 15,477
square feet per person, or 54 percent of the average.
Propagating and finishing space per person (Table ID divided by 1H) averaged
26,732 square feet per employee. For the nine largest nurseries it was four
percent greater at 27,894 square feet. The smallest nurseries had 51 percent of
the average, or 13,708 square feet.

Table 3.--Labor efficiency, 27 wholesale foliage plant
Florida, 1986.

nurseries in South

Item Unit Average Average Average Your
all 27 9 largest 8 smallest nursery
The one best measure
Value of own plants sold per
employee (Table 1A/1H) $ 40,898 45,503 19,680
Other useful indicators
Value of own plants sold per
employee adjusted for change
in inventory (Table 1B/1H) $ 45,537 47,326 26,274

Total bed & bench space per
employee (Table 1C/1H) sq ft 28,443 29,619 15,477

Propagating 5 finishing space
per employee (Table 1D/1H) sq ft 26,732 27,894 13,708

Total nursery area per
employee (Table IF/1H) sq ft 37,667 38,460 29,878

~~:P -----==f=-t~=~=t= = L--=PP

The Use of Space (Table 4)

The one measure selected as best for measuring the intensity of space use
was "Annual turnover of plant inventory value" (Table 1A divided by 11). This
indicates the number of times that funds tied up in plant Inventory were repre-
sented by sales during the year. The reliability of this number depends upon
the care and accuracy with which plant inventory records are kept. Some nursery
operators in the program keep careful Inventories of plant numbers, while others
tend to approximate their figures. But the idea is deemed valid, and should be
especially useful to those who compare their figures with their own data of the
previous year. In this case, the nursery operator has first hand knowledge of
the nature and the dependability of the comparison.
Annual turnover of plant inventory value in the 27 nurseries averaged 168.6
percent. This means that annual plant sales amounted to 1.686 times the value
.of plants in inventory. For the nine largest nurseries, turnover was 199.7 per-
cent. Thus, their annual plant sales were practically twice the value of plants
in inventory. The eight smallest nurseries had a much lower turnover rate,
136.4 percent.
Vacant bed and bench space is a measure of efficiency of space use. Gener-
ally, reducing the percent of space vacant on the average is desirable. How-
ever, some vacancy is inevitable between the time a plant is removed for sale
and the time another is put in its place to start growing. The average amount
of vacant space during the year divided by total bed and bench space (Table IC)
shows the average percent of vacant space. This was 6.66 percent for the 27
nurseries. For the largest ones, It was 6.92 percent. The smallest nurseries
had 12.91 percent.
Other useful indicators to study are percent of total nursery area including
buildings and roadways that is bed and bench space, and the division of bed and
bench space between propagating and finishing space and stock plant area. Other
things being equal, the higher the percentage of total nursery area devoted to
bed and bench space, and the higher the percentage of bed and bench space used
for propagating and finishing rather than stock plants, the better. However,
other things are seldom equal, such as the cost of raising rather than buying
cuttings, and availability of quality material when needed.

The 27 nurseries averaged 857,931 square feet of bed and bench space, which
was 75.51 percent of their total nursery area. The nine largest nurseries
averaged 77.01 percent of their total area in bed and bench space, while the
eleven smallest nurseries utilized 51.80 percent of their total nursery area as
bed and bench space.
Propagating and finishing area averaged 806,316 square feet for the 27 nur-
series. This was 93.98 percent of the total bed and bench space (Table 1D di-
vided by 1C). For the nine largest nurseries, It was 1,986,053 square feet, or
2.46 times the average. This represented 94.18 percent of the total bed and
bench space. The eight smallest nurseries had 77,449 square feet for propaga-
ting and finishing, which was only 9.6 percent of the average. This space
represented 88.56 percent of their total bed and bench space. Thus, the
smallest nurseries devoted a slightly greater proportion of their total bed and
bench space to stock plants than the average.
The remaining bed and bench space was used for stock plants. Stock plants
utilized an average of 6.02 percent of the total bed and bench space. The
largest nurseries used a little smaller share of their space for stock plants
(5.82 percent) while the smallest nurseries maintained almost double the average
share of bed and bench space in stock plants (11.44 percent).

Table 4.--The use of space, 27 wholesale foliage plant nurseries in South
Florida, 1986.

Item Unit Average Average Average Your
all 27 9 largest 8 smallest nursery
Intensity of space use
Annual turnover of plant in-
ventory value (Table 1A/11) % 168.6 199.7 136.4
Efficiency of space use
Vacant bed & bench space sq ft 57,133 145,921 11,289
- (divided by Table 1C) % 6.66 6.92 12.91
Other useful indicators
Total nursery area (Table IF) sq ft 1,136,147 2,738,347 168,816
Total bed & bench space sq ft 857,931 2,108,874 87,449
-------- (Table C/1F) % 75.51 77.01 51.80

Propagating & finishing bed sq ft 806,316 1,986,053 77,449
s bench space (Table 1D/IC) % 93.98 94.18 88.56

Stock plant bed & bench space sq ft 51,615 122,821 10,000
-------- (Table 1E/C) % 6.02 5.82 11.44

=~~P~~:-:t:C-~~P---~-

Efficiency in Use of Capital (Table 5)

A number of possibilities exist for measuring efficiency in the use of cap-
ital. The one selected as the best single indicator was "Annual turnover of
owned capital value." This is the percentage that results from dividing the
value of own plants sold by the value of capital owned (Table 1A divided by 1P).
Annual turnover averaged 78.1 percent for the 27 nurseries. This means that
sales for the year were slightly more than three-quarters of the capital
invested. For the nine largest nurseries, it was 87.2 which was a 12 percent
faster turnover rate than the average. The eight smallest nurseries had 48.6,
which was about 62 percent of the average turnover rate.
Managed capital turnover averaged 69.0 percent for the 27 nurseries. Thus,
there was enough additional capital being managed to reduce the turnover rate by
9.1 points (12 percent). For the nine largest nurseries, It was 72.9 meaning
there was enough additional capital involved in the operation to reduce the
turnover rate by 14.3 points (16 percent). The eight smallest nurseries managed
a small amount of additional capital, reducing turnover 38.8 (down 20 percent).
Capital invested per employee (Table 1P divided by 1H) averaged $53,349 for
the 27 nurseries. For the nine largest nurseries, it was $49,900, or about five
percent less than the average. The eight smallest nurseries had $40,471 which
was only 77 percent of the average.
Average capital investment per acre of nursery area (Table 1P divided by 1G)
was $60,539 for the 27 nurseries. For the nine largest nurseries, it was
$56,517, or seven percent lower than the average. The eight smallest nurseries
had $59,004, or three percent less than the average. Calculations for managed
capital (Table lX divided by 1G) showed the largest nurseries managing about
four percent less than the average per acre, while the smallest nurseries
managed about five percent more than the average.
Growing plants represented 39.72 percent of the capital managed by the 27
nurseries. For the largest nurseries, it was 36.53 percent. The smallest nur-
series had 28.48 percent of their capital tied up in plants.
Buildings and installations averaged 20.00 percent of the total. The
largest and smallest nurseries were about the same, 20.79 and 20.64 percent.
Machinery and equipment took between 3.24 and 6.94 percent of the capital.
Land required 25.38 percent of the capital on average. The largest nurseries
used 26.09 percent of their capital for land. The smallest nurseries used a

greater share of of their capital for land, 34.60 percent. Accounts receivable
accounted for 8.73 percent of all capital managed. The largest nurseries
used 10.15 percent while the smallest ones used only 2.94 percent this way.

Table 5.--Efficiency In use of capital, 27 wholesale foliage plant nurseries in
South Florida, 1986.

Item Unit Average Average Average Your
all 27 9 largest 8 smallest nursery
The one best measure
Annual turnover(e) of owned
Capital value (Table 1A/IP) % 78.1 87.2 48.6
Other useful indicators
Annual turnover(e) of managed
capital value (Table 1A/1X) % 69.0 72.9 38.8 _

Per employee:
Capital owned (Table 1P/1H) $ 52,349 49,900 40,471
Capital managed (Table 1X/1H) $ 61,062 59,643 50,667

Per acre:
SCapital owned (Table 1P/1G) $ 60,539 56,517 59,004
"Capital managed (Table 1X/1G) $ 70,615 67,552 73,869

Managed capital per person in:
Plants-- (Table 1Q/1H) $ 24,255 21,787 14,432
Buildings (Table 1R/1H) $ 12,211 12,399 10,457
Mach & equip- (Table 1S/1H) $ 1,979 2,111 3,517
Land- - (Table 1T/1H) .$ 15,499 15,563 17,533
A/R --- (Table 1V/1H) $ 469 382 1,032

Managed capital per acre in:
Plants- -(Table 1Q/1G) $ 28,049 24,676 21,040
Buildings (Table 1R/1G) $ 14,121 14,044 15,245
Mach & equip- (Table 1S/1G) $ 2,288 2,391 5,128
Land- - (Table 1T/1G) $ 17,924 17,626 25,561
A/R - (Table 1V/1G) $ 543 433 1,504

Percent of capital managed in:
Plants- - (Table 1Q/1X) % 39.72 36.53 28.48
Buildings (Table 1R/IX) % 20.00 20.79 20.64
Mach & equip- (Table 1S/1X) % 3.24 3.54 6.94
Land- - (Table 1T/1X) % 25.38 26.09 34.60
Supplies- (Table 1U/1X) % 0.77 0.64 2.04
A/R - (Table 1V/1X) % 8.73 10.15 2.94
Cash- ----- -(Table 1W/1X) % 2.16 2.26 4.35
Total nursery- (Table 1X/1X) % 100.00 100.00 100.00

(e) Annual turnover of capital value--the percent resulting from dividing
the value of own plants sold by the value of capital (Table 1A/1P or 1X).

Dollar Costs by Expense Category (Table 6)

Dollar costs by expense category were obtained from the annual profit and
loss statement or tax records of the participating nurseries. The cash cost
categories were grouped into wages and salaries, production supplies, other
production costs, and administrative and overhead expense. Dollar costs should
be useful for comparing the relative magnitude of the various cost items, and as
a guide to persons interested in South Florida foliage nurseries as an
Investment, either as buyers, sellers or lenders.
Salaries and Wages
The salary and wage group Includes operator salary or time value. The
average was $455,875. The largest nurseries had $1,105,138, near two and a half
times the average. The smallest ones had $71,535, or 16 percent of the average.
Production Supplies
Production supplies include the group starting with "plants and seeds"
through "other production supplies." They averaged $453,803 for the 27 nurser-
ies. For the largest nurseries, they were $1,158,714, or 2.55 times the
average. The smallest nurseries had $36,639, or eight percent of the average.
Other Production Costs
Other production costs Include "facility repairs/maintenance" and "equipment
operating costs." They averaged $46,592 for the 27 nurseries. The largest
nurseries had $114,949, or 2.47 times the average. The smallest ones had
$6,506, a seventh of the average.
Administrative and Overhead
Administrative and overhead expenses usually cannot be assigned to any par-
ticular crop or growing activity, yet must be covered in order to remain in
business. They include the group starting with "travel and entertainment"
through "other cash expenses." They averaged $151,306 for the 27 nurseries.
For the largest nurseries, expenses were $388,420, 2.56 times the average. For
the smallest nurseries they were $14,646, almost ten percent of the average.
Total Cash Costs
Total cash costs averaged $1,107,575. The largest nurseries had total costs
of $2,767,222, 2.5 times the average. The smallest ones had $129,326, or 12
percent of the average.
Non-Cash Costs
Non-cash costs include depreciation allowances, decreases in the supply in-
ventory (using supplies purchased during a previous time period), and an inter-

est charge for the use of the capital invested in the nursery. These costs
averaged $247,497. For the largest nurseries, they were $541,389, 2.19 times
the average. The smallest ones had $46,156, or about 19 percent of the average.
Total All Costs
Total costs averaged $1,355,072. The largest nurseries averaged $3,308,611,
or 2.44 times the average. Smallest ones had $175,481 (13 percent of average).

Table 6.--Dollar costs by expense category, 27
in South Florida, 1986.

wholesale foliage plant nurseries

Item Average Average Average Your
all 27 9 largest 8 smallest nursery
--- - Dollars -- -------

Cash Costs
Operator's salary . .
Other wages/salaries . .
Salaries and wages . .

Plants & seeds to grow on .
Pots/growing containers . .
Fuel for production heat .
Peat/soil/shavings, etc ..
Fertilizer/lime . . .
Pesticides/other chemicals .
Packing boxes/supplies . .
Other production supplies .
Production supplies. .. ...

Facility repairs/maintenance
Equipment operating costs .
Other production costs .

Travel/trade shows/entertainment.
Insurance . . .
Telephone . . .
Electricity . . .
Taxes/licenses/bonds . .
Advertising . ..
Rent: land and/or buildings .
Other cash expenses . .
Administrative and overhead .
TOTAL CASH COSTS . .

Non-Cash Costs
Depreciation: mach/equipment
Depreciation: bldgs/fences/wells.
Inventory decrease in supplies.
Interest on capital @ 12% .
NON-CASH COSTS . .

TOTAL ALL COSTS . .

62,775
393,100
455,875

214,919
54,689
8,458
42,683
29,457
27,242
36,346
40,009
453,803

30,201
16,391
46,592

13,088
12,650
13,470
8,125
9,988
15,190
9,014
69,782
151,306
1,107,575

24,551
33,466
0
189,480
247,497

1,355,072

117,703
987,435
1,105,138

562,542
132,173
21,661
95,414
74,115
66,293
100,049
106,468
1,158,714

76,774
38.175
114,949

33,273
24,366
33,592
18,818
24,786
40,133
22,081
191,371
388 420
2,767,222

52,445
62,602
0
426,343
541,389

3,308,611

24,001
47,534
71,535

8,445
9,010
1,136
6,318
3,372
2,924
1,424
4,009
36,639

3,220
3,286
6,506

1,068
3,217
1,305
1,710
1,300
1,565
1,469
3 012
14.646
129,326

5,465
13,226
24
27 440
75,456

175,481

p~-~-3 ~.~~---~c~rl~'~C~~-UI-S~CS5~5~S~~e=I~=~~

Percent of Total Costs by Expense Category (Table 7)

While expenditures in the form of dollars show the magnitude of expenses for
various cost categories, they are not very helpful for comparing cost rela-
tionships between different sizes of nurseries. But costs as a percent of total
costs are useful for this purpose. These are obtained by dividing each of the
dollar expense items in Table 6 by the corresponding "Total all costs" figure at
the bottom of the table.
Salaries and Wages
Salaries and wages (includes operator) averaged 33.64 percent of all costs.
For the nine largest nurseries, they were about the same, 33.40 percent. For
the eight smallest nurseries they were higher, 40.77 percent.
Production Supplies
Production supplies ("plants" through "other production supplies") averaged
33.49 percent for the 27 nurseries. For the largest nurseries, they were 35.02
percent, or 1.53 points more than the average. The smallest nurseries averaged
20.88 percent of total costs, or 12.61 points below the average.
Other Production Costs
Other production costs ("facility repairs" and "equipment operation") aver-
aged 3.44 percent for the 27 nurseries. For the nine largest nurseries, they
were 3.47 percent. The smallest nurseries averaged 3.71 percent.
Administrative and Overhead
These costs ("travel" through "other cash expense") averaged 11.17 percent
for the 27 nurseries. For the nine largest ones, they were 11.74 percent. The
smallest nurseries averaged 8.35 percent.
Total Cash Costs
Total cash costs represented 81.74 percent of all costs and allowances for
the 27 nurseries. For the largest ones, it was 83.64 percent, or 1.9 points
above average. The smallest ones had 73.70 percent, 8.04 points less than the
average in cash costs.
Non-Cash Costs
Non-cash costs ("depreciation" through "Interest on capital") are the addi-
tional costs that need to be covered eventually, though not necessarily with
cash during this accounting period. They averaged 18.26 percent of total costs
for the 27 nurseries. For the nine largest ones, they averaged 16.36 percent,
down 1.9 points. Hence, the largest nurseries had a higher percent of their

total operating expense in the form of cash costs. The eight smallest nurseries
had 26.30 percent of their total as non-cash costs. This was almost one and one
half times the average. The largest differences were in the percentages of
total costs represented by depreciation on buildings followed by depreciation on
machinery and interest on capital.

Table 7.--Percent of total costs by expense category, 27 wholesale foliage plant
nurseries in South Florida, 1986.

Item

Cash Costs
Operator's salary . . .
Other wages/salaries . .
Salaries and wages . .

Plants & seeds to grow on . .
Pots/growing containers . .
Fuel for production heat . .
Peat/soil/shavings, etc . .
Fertilizer/lime . . .
Pesticides/other chemicals .
Packing boxes/supplies . .
Other production supplies . .
Production supplies . .

Facility repairs/maintenance .
SEquipment operating costs . .
Other production costs . .

Travel/trade shows/entertainment
Insurance . . . .
Telephone . . . .
Electricity .. . .. .
Taxes/licenses/bonds ....
Advertising ... ......
Rent: land and/or buildings .
Other cash expenses . .
Administrative and overhead .
TOTAL CASH COSTS . .

Non-Cash Costs
Depreciation: mach/equipment .
Depreciation: bldgs/fences/wells
Inventory decrease in supplies .
Interest on capital @ 12% . .
NON-CASH COSTS . .

TOTAL ALL COSTS . .

Average
all 27

4.63
29.01
33.64

15.86
4.04
0.62
3.15
2.17
2.01
2.68
2.95
33.49

2.23
1.21
3.44

0.97
0.93
0.99
0.60
0.74
1.12
0.67
5.15
11.17
81.74

1.81
2.47
0.00
13.98
18.26

100.00

Average Average Your
9 largest 8 smallest nursery
- Percent - - -

3.56
29.84
33.40

17.00
3.99
0.65
2.98
2.24
2.00
3.02
3.22
35.02

2.32
1.15
3.47

1.01
0.74
1.02
0.57
0.75
1.21
0.67
5.78
11.74
83.64

1.59
1.89
0.00
. 12.89
16.36

100.00

13.68
27.09
40.77

4.81
5.13
0.65
3.60
1.92
1.67
0.81
2.28
20.88

1.84
1.87
3.71

0.61
1.83
0.74
0.97
0.74
0.89
0.84
1.72
8.35
73.70

3.11
7.54
0.01
15.64
26.30

100.00

-

--~ir~-------s--

Costs Per Square Foot of Total Bed and Bench Space (Table 8)

While expenses as a percent of total costs facilitate comparing operating
'statements, they do not allow easy comparison of relative growing costs between
nurseries. But costs per square foot do. The traditional basis for comparison
is costs per square foot of total bed and bench space. These were obtained by
dividing each of the dollar cost figures in Table 6 by the appropriate area in
production figure from Table 1C, "Total bed and bench space."
Salary and Wages
Salaries and wages (includes operator) per square foot amounted to 53.1 cents
($.53) in the 27 nurseries. For the nine largest nurseries, personnel costs per
square foot averaged 52.4 cents, or almost one cent below the average. For the
eight smallest nurseries, they were 81.8 cents, or one a half times the average.
Production Supplies
Production supplies ("plants and seeds" through "other production supplies")
averaged 52.9 cents ($.53) per square foot. For the largest nurseries, they
were two cents higher, 54.9 cents. The smallest ones had 41.9 cents, or 11
cents below the average.
Other Production Costs
Other production costs ("facility repairs" and "equipment operation") aver-
aged 5.4 cents. For the largest nurseries, they also were 5.4 cents. The eight
smallest nurseries had 7.4 cents, or two cents higher than the average.
Administrative and Overhead
These costs ("travel" through "other cash expenses") averaged 17.6 cents.
For the largest nurseries, they were higher at 18.4 cents. The eight smallest
nurseries had lower overhead costs, 16.8 cents, or a cent below average.
Total Cash Costs
Total cash costs in the 27 nurseries averaged 129.1 cents ($1.29) per square
foot of total bed and bench space. For the nine largest nurseries, costs per
square foot were 131.2 cents, up about two cents. The eight smallest nurseries
had 147.9 cents, almost 19 cents above the average.
Non-Cash Costs
Non-cash costs ("depreciation" through "interest on capital") averaged 28.9
cents for the 27 nurseries. The largest nurseries had 25.7 cents. The smallest
nurseries had 52.8 cents, 1.83 times the average.

Total All Costs
All costs, both cash costs and non-cash allowances per square foot of total
bed and bench space averaged 158.0 cents ($1.58). For the nine largest
'nurseries, total costs were $1.57 per square foot, or a cent below the average.
The eight smallest nurseries had 200.7 cents ($2.01), or about 43 cents above
the average.

Table 8.--Costs per square foot of total bed & bench space, 27 wholesale foliage
plant nurseries in South Florida, 1986.

Iter Average Average Average Your
all 27 9 largest 8 smallest nursery
- - Cents - - -
Cash Costs
Operator's salary ......... 7.3 5.6 27.4
Other wages/salaries ....... 45.8 46.8 54.4
Salaries and wages ....... 53.1 52.4 81.8

Plants & seeds to grow on . 25.0 26.7 9.7
Pots/growing containers ...... 6.4 6.3 10.3
Fuel for production heat. ...... 1.0 1.0 1.3
Peat/soil/shavings, etc ...... 5.0 4.5 7.2
Fertilizer/lime ... .... 3.4 3.5 3.9
Pesticides/other chemicals .... 3.2 3.1 3.3
Packing boxes/supplies ...... 4.2 4.7 1.6
Other production supplies ..... 4.7 5.0 4.6
Production supplies ....... 52.9 514.9 41.9

Facility repairs/maintenance .. 3.5 3.6 3.7
Equipment operating costs .. 1.9 1.8 3.8
Other production costs .. .. 5.4 5.4 7.4

Travel/trade shows/entertainment 1.5 1.6 1.2
Insurance ............. 1.5 1.2 3.7
Telephone ............ 1.6 1.6 1.5
Electricity ............ 1.0 0.9 2.0
Taxes/licenses/bonds ....... 1.2 1.2 1.5
Advertising ........... 1.8 1.9 1.8
Rent: land and/or buildings .... 1.0 1.0 1.7
Other cash expenses ........ 8.1 9.1 3.4
Administrative and overhead 17.6 18.4 16.8
TOTAL CASH COSTS ....... 129.1 131.2 147.9

Non-Cash Costs
Depreciation: mach/equipment 2.9 2.5 6.2
Depreciation: bldgs/fences/wells 3.9 3.0 15.1
Inventory decrease in supplies. .. 0.0 0.0 0.03
Interest on capital @ 12% ..... 22.1 20.2 31.4
TOTAL CASH COSTS ...... 28.9 25.7 52.8

TOTAL ALL COSTS ........ 158.0 156.9 200.7

Costs Per Square Foot of Propagating and Finishing Space (Table 9)

Costs per square foot of total bed and bench space is the traditional basis
for comparisons between nurseries. However, costs per square foot of propaga-
ting and finishing space are more appropriate for estimating individual plant
growing costs, or for comparing growing cost efficiency between nurseries.
These costs were obtained by dividing the dollar cost figures in Table 6 by the
plant production area from Table 1D, "Propagating and finishing bed and bench
space."
Salary and Wages
Salaries and wages (includes operator) per square foot amounted to 56.5 cents
in the 27 nurseries. For the nine largest nurseries, salaries and wages
averaged 55.6 cents, or 0.9 cents below the average. The eight smallest
nurseries had 92.4 cents, or more than one and a half times the average.
Production Supplies
Production supplies ("plants and seeds" through "other production supplies")
averaged 56.3 cents per square foot. For the nine largest nurseries, these
costs were 58.3 cents. The eight smallest nurseries had 47.3 cents, or nine
cents below the average.
Other Production Costs
Other production costs ("facility repairs" and "equipment operation") aver-
aged 5.8 cents. For the largest nurseries, they also were 5.8 cents. The eight
smallest nurseries had 8.4 cents, or 2.6 cents above the average.
Administrative and Overhead
These costs ("travel" through "other cash expenses") averaged 18.8 cents.
For the largest nurseries, administrative and overhead costs were 19.6 cents.
The eight smallest nurseries averaged 18.9 cents, or about the same as the all-
nursery average.
Total Cash Costs
Total cash costs in the 27 nurseries averaged 137.4 cents ($1.37) per square
foot of propagating and finishing space. For the nine largest nurseries, they
were 139.3 cents, up about two cents. The eight smallest nurseries had 167.0
cents, or 30 cents greater than the average.
Non-Cash Costs
Non-cash costs ("depreciation" through "interest on capital") averaged 30.7
cents for the 27 nurseries. The largest nurseries had 27.3 cents. Smallest
nurseries had 59.6 cents, or 29 cents above average.

Total All Costs
Total costs per square foot of propagating and finishing space averaged 168.1

cents ($1.681).

For the nine largest nurseries, all costs totaled 166.6 cents

($1.666), one and a half cents below the average. The eight smallest nurseries
had 226.6 cents ($2.266), or 58 cents above the average.

Table 9.--Costs per square foot of propagating and finishing space, 27 Wholesale
nurseries In South Florida, 1986.

Item Average Average Average Your
all 27 9 largest 8 smallest nursery
- - Cents - - -

Cash Costs
Operator's salary . . .
Other wages/salaries . .
Salaries and wages . .

Plants & seeds to grow on . .
Pots/growing containers . .
Fuel for production heat . .
Peat/soil/shavings, etc . .
Fertilizer/lime . . .
Pesticides/other chemicals .
Packing boxes/supplies .. ....
Other production supplies .
Production supplies . ..

Facility repairs/maintenance .
Equipment operating costs . .
Other production costs . .

Travel/trade shows/entertainment
Insurance . . . .
Telephone . . . .
Electricity . . .
Taxes/licenses/bonds ....
Advertising .. .......
Rent: land and/or buildings ..
Other cash expenses . .
Administrative and overhead .
TOTAL CASH COSTS . .

Non-Cash Costs
Depreciation: mach/equipment .
Depreciation: bldgs/fences/welis
Inventory decrease in supplies.
Interest on capital @ 12% . .
NON-CASH COSTS . .

TOTAL CASH COSTS ...

7.8
48.7
56.5

26.6
6.8
1.0
5.3
3.6
3.4
4.5
5.0
56.3

3.8
2.0
5.-

1.6
1.6
1.7
1.0
1.2
1.9
1.1
8.6
.18.8
137.4

3.0
4.2
0.0
23.5
30.7

168.1

5.9
49.7
55.6

28.3
6.7
1.1
4.8
3.7
3.3
5.0
5.4
58.3

3.9
1.9
5.

1.7
1.2
1.7
1.0
1.2
2.0
1.1
9.6
19.6
139.3

2.6
3.2
0.0
* 21.5
27.3

166.6

31.0
61.4
92.4

10.9
11.6
1.5
8.2
4.4
3.8
1.8
5.2
47.3

4.2
4.2

1.4
4.2
1.7
2.2
1.7
2.0
1.9
3.9
18.9
167.0

7.1
17.1
0.03
35.4
59.6

226.6

M MAL-_

Costs Per Dollar of Sales Adjusted for Inventory Change (Table 10)

Costs per square foot of growing area are important for comparing relative
costs between nurseries, and for estimating individual plant growing costs.
However, they do not indicate the profit potential of a nursery operation as
well as do costs per dollar of sales. Adjusting sales for changes in inventory
value shows how the business is doing in total, not just cash-wise. These fig-
ures were developed by dividing the dollar costs shown in Table 6 by the appro-
priate figure from Table 1B, "Value of own plants sold adjusted for change in
plant inventory value."
Salaries and Wages
Salaries and Wages (includes operator) averaged 33.2 cents per dollar of
sales after adjusting for changes in inventory. For the nine largest nurseries,
they were 32.8 cents, a half a cent below the average. The smallest nurseries
had 48.2 cents, 15 cents above the average.
Production Supplies
Production supplies ("plants and seeds" through "other production supplies")
averaged 33.0 cents. For the nine largest nurseries, they were 34.4 cents, or
one and half cents above the average. The smallest nurseries had 8.3 cents
below the average, or 24.7 cents.
Other Production Supplies
Other production costs ("facility repairs" and "equipment operation") aver-
aged 3.4 cents per dollar of adjusted sales. For the largest nurseries, they
also were 3.4 cents. The smallest nurseries averaged a cent more, 4.4 cents.
Administrative and Overhead
These costs ("travel" through "other cash expense") amounted to 11.0 cents
per dollar of adjusted sales. For the nine largest nurseries, they were a half
cent more at 11.5 cents. The eight smallest nurseries averaged a cent less, or
9.9 cents per dollar of sales adjusted for change in plant inventory value.
Total Cash Costs
Total cash costs per dollar of adjusted sales averaged 80.6 cents. For the
largest nurseries, they were 1.5 cents more, or 82.1 cents. The smallest nur-
series had 87.1 cents, six and a half cents above the average.
Non-Cash Costs
Non-cash costs ("depreciation" through "interest on capital") averaged 18.0
cents. Largest nurseries had 16.1 cents, or almost two cents below average.

The smallest nurseries averaged considerably more, 31.1 cents. This was not
quite double the average, (13.1 cents above the average).
Total All Costs
Total costs per dollar of adjusted sales averaged 98.7 cents. The largest
nurseries had 98.2 cents. The smallest ones averaged 118.2 cents for a deficit
of over 18 cents per dollar of sales adjusted for plant inventory change.

Table 10.--Costs per dollar of sales adjusted for change in plant inventory, 27
foliage plant nurseries in South Florida, 1986.

Item

Cash Costs
Operator's salary . . .
Other wages/salaries . .
Salaries and wages . .

Plants & seeds to grow on . .
Pots/growing containers . .
Fuel for production heat . .
Peat/soil/shavings, etc. .
Fertilizer/lime . . .
Pesticides/other chemicals .
Packing boxes/supplies . .
Other production supplies . .
Production supplies . .

Facility repairs/maintenance .
Equipment operating costs ..
Other production costs . .

Travel/trade shows/entertainment .
Insurance . . . .
Telephone . . . .
Electricity . . .
Taxes/licenses/bonds . .
Advertising . . .
Rent: land and/or buildings .
Other cash expenses . .
Administrative and overhead .
TOTAL CASH COSTS . .

Non-Cash Costs
Depreciation: mach/equipment .
Depreciation: bldgs/fences/wells
Inventory decrease In supplies .
Interest on capital @ 12% .
NON-CASH COSTS . .

TOTAL ALL COSTS . .

Average
all 27

4.6
28.6
33.2

15.6
4.0
0.6
3.1
2.1
2.0
2.6
2.9
33.0

2.2
1.2
3.4

1.0
0.9
1.0
0.6
0.7
1.1
0.7
5.1
11.0
80.6

1..8
2.4
0.0
13.8
18.0

98.7

Average
9 largest 8
- Cents

3.5
29.3
32.8

16.7
3.9
0.6
2.8
2.2
2.0
3.0
3.2
34.4

2.3
1.1
3.4

1.0
0.7
1.0
0.6
0.7
1.2
0.7
5.7
11.5
82.1

1.6
1.9
. -0.0
12.6
16.1

98.2

Average Your
smallest nursery

16.2
32.0

5.7
6.1
0.8
4.3
2.3
2.0
1.0
2.7
24.7

2.2
2.2
4.4

0.7
2.2
0.9
1.2
0.9
1.0
1.0
2.0
S9.9
I87.

3.7
8.9
0.02 ___
18.5 ___
31.1

118.2

==--.,.e9a--~~--~--~-

Costs Per Dollar of Sales (Table 11)

While total business position is indicated by costs per dollar of sales
adjusted for changes in inventory value, bill paying ability depends upon costs
relative to cash received. These figures were developed by dividing the dollar
costs shown In Table 6 by the appropriate figure from Table 1A, "Value of own
plants sold."
Salaries and Wages
Salaries and wages (Includes operator) amounted to 37.0 cents per dollar of
cash received. For the nine largest nurseries, they were 35.7 cents, or 1.3
cents less than the average. The smallest nurseries had 64.3 cents, or 27.3
cents over the average.
Production Supplies
Production supplies ("plants and seeds" through "other production supplies")
averaged 36.8 cents per dollar of cash sales. For the nine largest nurseries,
they were 37.4 cents, or a half cent greater than the average. For the smallest
nurseries, costs were 32.9 cents, or 3.9 cents below average.
Other Production Costs
Other production costs ("facility repairs" and "equipment operation") aver-
aged 3.8 cents per dollar of cash received. For the nine largest nurseries,
they were almost the same, 3.7 cents. For the smallest nurseries, costs were
5.8 cents, or two cents above the overall average.
Administrative and Overhead
These costs ("travel" through "other cash expense") averaged 12.3 cents per
dollar of sales. For the nine largest nurseries, they were 12.5 cents. For the
eight smallest nurseries costs were 13.2 cents, or a cent above average.
Total Cash Costs
Total cash costs averaged 89.8 cents per dollar of cash received for all 27
nurseries. This means that they were able to meet current bills with about ten
cents per dollar of sales to spare. For the largest nurseries, costs were 89.3
cents, or a half cent lower than average. The smallest firms had total cash
costs of 116.3 cents, around 26 cents above the average, and over 16 cents per
dollar of sales short of covering cash costs.
Non-Cash Costs
These costs ("depreciation" through "interest on capital") averaged 20.1
cents per dollar of sales. For the nine largest nurseries, they were 17.5

23

cents. The eight smallest nurseries had much higher non-cash costs, 41.5 cents
per dollar of sales.
Total All Costs
Total all costs averaged 109.9 cents per dollar of cash sales. Largest
nurseries averaged 106.8 cents and smallest nurseries 157.8 cents. Hence, none
of the groups took In enough cash to cover all costs for the year.

Table 11.--Costs per dollar of sales (no adjustment for change In plant inven-
tory), 27 foliage plant nurseries in South Florida, 1986.
=e i n i n i n~~~~~m i n i n m in~~--i n intD

Item

Cash Costs
Operator's salary . . .
Other wages/salaries . .
Salaries and wages . .

Plants & seeds to grow on . .
Pots/growing containers . .
Fuel for production heat . .
Peat/soil/shavings, etc . .
Fertilizer/lime . ... .
Pesticides/other chemicals .
Packing boxes/supplies .. ..
Other production supplies .. ...
Production supplies . .

Facility repairs/maintenance .
Equipment operating costs . .
Other production costs ...

Travel/trade shows/entertainment
Insurance . . . .
Telephone . . . .
Electricity .. .. .
Taxes/licenses/bonds .......
Advertising . .. .
Rent: land and/or buildings .
Other cash expenses . .
Administrative and overhead .
TOTAL CASH COSTS . .

Non-Cash Costs
Depreciation: mach/equipment .
Depreciation: bldgs/fences/wels .
Inventory decrease In supplies. .
Interest on capital @ 122% .....
NON-CASH COSTS . .

TOTAL ALL COSTS . .

=

Average
all 27

5.1
31.9
37.0

17.4
4.4
0.7
3.5
2.4
2.2
3.0
3.2
36.8T

2.5
1.3
3.8

1.1
1.0
1.1
0.7
0.8
1.2
0.7
5.7
12.3
89.8

2.0
2.7
0.0
15.4
20.1

109.9

Average Average
9 largest 8 smallest
- Cents -

3.8 21.6
31.9 42.7
35.7 64.3

18.2
4.3
0.7
3.1
2.4
2.1
3.2
3.4
37.4

2.5
1.2
3.7

1.1
0.8
1.1
0.6
0.8
1.3
0.7
6.2
12.5
89.3

1.7
2.0
0.0
13.8
17.5

106.8

Your
t nursery
- -

7.6
8.1
1.0
5.7
3.0
2.6
1.3
3.6
32.9

2.9
3.0
5.9

1.0
2.9
1.2
1.5
1.2
1.4
1.3
2.7
13.2
116.3

4.9
11.9
0.02
24.7

157.8

Income Summary (Table 12)

This section concentrates on developing net nursery Income and allocating it
between the time and effort of the owner-operator and a return on the money
invested in the operation. After all Is said and done, it is for a payment on
time that a nursery operator works, and it is for a return to capital that
nursery operators and lending institutions invest funds in nursery operations.
There are two approaches to choose from. One assigns a "standard" rate of
interest for capital with the residual going to the owner-operator salary. The
other assigns a value to owner-operator with the residual going as a rate of
return on capital. This second approach is used here.
Total Gain
Total gain refers to the total effect of the year's operation. It is the sum
of plant sales, changes in plant and supply inventory values, and miscellaneous
-income. Miscellaneous income refers to income received from sources other than
plant sales. Included could be rent income, interest income, delivery income,
boxing charges, and income from the sale of fertilizer and supplies.
Total gain for the 27 nurseries averaged $1,386,125. Largest nurseries
-averaged almost two and a half times this, or $3,403,392. Smallest nurseries
had 10.7 percent of the average, or $148,586.
Net Nursery Income
Net nursery income is the total return for the year for the time and man-
agerial skills of the operator plus the capital invested in the operation. To
obtain it, all cash costs from Table 6 except the operator's salary, and all
non-cash allowances shown there except interest on capital, are subtracted from
total gain. The result is net nursery income, or income for all the time and
capital investment (including borrowed funds) supplied by the owner-operator.
For the 27 nurseries, it averaged $283,308. For the nine largest nurseries,
it was $638,826, or 2.25 times the average. For the smallest nurseries, net
nursery income was $24,546, or 8.7 percent of the average.
Return to Capital
From net nursery income is subtracted the salary or time value of the owner-
operator to obtain that part of net nursery income attributable to capital.
This is the earnings of the money invested in the nursery. Dividing it by the
value of capital invested gives the rate of return earned by the investment.

When the owner and operator are the same person, dividing net nursery income
between the operator and return to capital may not seem important. But when the
owners are outside investors, then accurate division is important. In either
-case, rate of return is a common indicator for evaluating an investment or for
selecting between alternative investment alternatives.
Return to capital for the 27 nurseries amounted to $220,533, or a return of
13.97 percent. For the nine largest nurseries, it was $521,124 for 14.67
percent or a 0.70 percent greater than the average return on the capital
investment. The smallest nurseries averaged $544 for a 0.24 percent return on
the capital invested.

Table 12.--Income summary, 27 wholesale foliage plant nurseries in South
Florida, 1986.

Unit Average
all 27

Value of own plants sold -
Plant inventory change - -
Supply inventory change- -
Miscellaneous cash income- -
Total gain(f) - - -

Deduct cash costs less op salary
Deduct non-cash costs less int -
Total deductions- - -

Net nursery income(g)- - -
Deduct op salary or time value -

Return to capital(h) - -
Rate of return to capital(i) -

$ 1,233,590
$ 139,937
$ 2,704
$ 9.893
$ 1,386,125

$(1,044,800)
$( 58,016)
$(1,1028,816)

$ 283,308
$( 62,775)

$ 220,533
% 13.97

Average Average Your
9 largest 8 smallest nursery
- Dollars - - -
3.097.396 111.193

272,230
5,990
27,775
3,403,392

(2,649,519)
( 115,047)
(2,764,565)

638,826
( 117,703)

521,124
14.67

37,258
0
135
148,586

( 105,325)( )
( 18,715)( )
( 124,040)( )

24,546
( 24,001)( )

545
0.24

(f) Total gain--the sum of plant sales, change in plant and supply inven-
tories, and miscellaneous Income. It represents the total effect of the year's
operation, be it in the form of cash or change in inventory value.

(g) Net nursery Income--the net effect of the year's operation. To obtain
it, subtract all cash costs (except operator's salary), and all non-cash allow-
ances (except interest on capital) from total gain. The result is the return
for the time and managerial skills of the operator, and for the use of the
capital invested in the operation.

(h) Return to capital--the portion of net income that is left after sub-
tracting the salary or time value of the operator. It is what the owned capi-
tal earned.

(i) Rate of return to capital--return to capital divided by the value of
owned capital. It is the rate of return earned on the capital invested.

Item

Balance Sheet (Table 13)

This section is a relatively recent addition to the Florida Nursery Business
Analysis series. It was made possible by the additional fiscal information
supplied by the participating nurseries. These balance sheet figures represent
the mid-year financial situation of the participating firms. They were derived
as an average of year-beginning and year-end figures.
Current Assets
Current assets consist of cash, accounts receivable, and inventory values.
They are cash, or items deemed convertible to cash within a year's time. Cash
on hand includes funds in checking accounts, savings accounts, and money market
funds. Average cash on hand was $39,721. Largest firms had over twice this
amount ($95,791). Smallest ones had 31 percent of the average ($12,459).
Accounts receivable are the uncollected funds due. Most of this is payments due
'for plants sold. Generally, this figure should be minimized. Uncollected funds
pay no bills and earn no interest. They averaged $160,865. Largest nurseries
had over twice this amount, or $431,160. The smallest nurseries had $8,430, or
-about five percent of the average. Inventory values are the investments in
growing plants and supplies presented previously in Table 1. They averaged
$745,746. Largest nurseries averaged 210 percent more ($1,578,432). Smallest
had 12 percent of the average ($87,369). Total current assets averaged
$946,331. For largest nurseries, they were $2,105,383, or 2.2 times the
average. The smallest firms averaged $108,258, or 11 percent of the average.
Long Term Assets
Long term assets are investments in buildings, machinery and land that
normally would not be converted to cash within a year. Current values of
investments are the original cost less accumulated depreciation. Comparing
original cost with the value remaining after subtracting accumulated deprecia-
tion provides an idea of the degree to which capital assets have been depleted.
Original investments averaged $979,017. Subtracting accumulated depreciation of
$346,346 leaves a current value of $632,671 (64.6 percent of original cost).
The largest nursery original cost was $2,198,251. Subtracting accumulated
depreciation of $750,776 gives a remaining value of $1,447,475 (65.8 percent of
original cost). The original investment of the smallest nurseries was about one
fifth the average, or $194,890. Subtracting accumulated depreciation of $74,482
makes the current value $120,408 (61.8 percent of the original cost).

Total Assets
Total assets averaged $1,579,002. The largest nurseries had over twice this
level of investment ($3,552,858). Total assets of the smallest nurseries
amounted to 14 percent of the average ($228,667).
Liabilities
Liabilities may be "current" (payable during the current year) or "long term"
(payable at some time after the current year). Current liabilities averaged
$88,542. The largest nurseries had 2.56 times this amount ($226,763). The
smallest ones had five percent of average ($4,009). Long term liabilities may
be notes or mortgages. They averaged $496,869. The largest nurseries had 1.8
times this amount ($917,088). The smallest ones had 35 percent of the industry
average ($174,708). Total Liabilities represent that part of the nursery that
belongs to someone else. For all nurseries, liabilities averaged $585,411, or
37 percent of the assets. The largest nurseries had 2.25 times this amount,

Table 13.--Balance Sheet, 27 wholesale foliage
1986

plant nurseries in South Florida,

Item Average Average Average Your
all 27 9 largest 8 smallest nursery
- - Dollars - - -
Assets
Current Assets
Cash on hand . . 39,721 95,791 12,459
Accounts receivable. ...... 160,865 431,160 8,430
Inventories: Plants ...... 731,595 1,551,200 81,540
Supplies ..... 14,151 27,232 5,829
STOTAL CURRENT ASSETS ..... 946,331 2,105,383 108,258

Long Term Assets
Machinery & equipment. ..... 204,039 455,857 39,403
Buildings & fixtures ...... 568,184 1,324,070 111,425
Land .. ...... 206,795 418,324 44 062
Sub-total (original cost). 979,017 2,198,251 194,890
Less accumulated depreciation. ( 346,346) ( 750,776) ( 74,482)( )
TOTAL LONG TERM ASSETS .. 632,671 1,4747,475 120,408

TOTAL ASSETS ......... 1,579,002 3,552,858 228,667

Liabilities and Net Worth
Liabilities
Current liabilities. ...... 88,542 226,763 4,009
Long-term liabilities. ...... 496,869 917,088 174,708
TOTAL LIABILITIES . 585,411 1,143,851 178,717

NET WORTH. .......... 993,591 2,409,006 49,949

TOTAL LIABILITIES & NET WORTH 1,579,002 3,552,858 228,667
~ ~=---~~~ --------=---~---e

or $1,143,851 (32 percent of the assets). The smallest ones had 31 percent of
the industry average, or $178,717 (78 percent of the assets).
Net worth
Net worth is the difference between "total assets" and "total liabilities".
This is what the owner owns. The average net worth of all 27 nurseries was
$993,591 (63 percent of the assets). The largest nurseries had $2,409,006 (68
percent) while the smallest nurseries had $49,949 (22 percent of the assets).

Total Profitability Model (Figure 1)

The Total Profitability Model combines operating statement and balance sheet
figures in three sections: margin management, asset management and leverage
management. Together, they indicate the firm's return on net worth.
Margin Management
Figures for this section come from Table 12. From nursery total gain
($1,386,125) are subtracted total deductions ($1,102,816) plus operator's salary
($62,775) to give return to capital ($220,533). This divided by total gain
($1,386,125) yields an average net profit margin of 15.91 percent. The largest
nurseries managed a net profit margin of 15.31 percent, while the smallest
nurseries averaged only a 0.37 percent net profit number.
Asset Management
Figures for this section come from the asset portion of Table 13. Current
assets ($946,331) plus long term assets ($632,671) make total assets of
$1,579,002. Total gain ($1,386,125) divided by total assets ($1,579,002) gives
an asset turnover figure of 0.8778. Asset turnover times net profit margin
(15.91 percent) results in an average return to capital of 13.97 percent. Lar
gest nurseries averaged 14.67 percent return to capital. Smallest had 0.24.
Leverage Management
Figures for this section come from the liabilities and net worth portion of
Table 13. Current liabilities ($88,542) plus long term liabilities ($496,869)
gives average total liabilities of $585,411. This subtracted from total assets
($1,579,002) yields average net worth of $993,591. Total liabilities and net
worth divided by net worth gives a leverage factor of 1.5892. Leverage times
return to capital (13.97 percent) gives a return on net worth of 22.20 percent.
Largest nurseries had 21.63 percent. Smallest nurseries averaged 1.09 percent.

MARGIN MANAGEMENT

NET PROFIT
MARGIN

RATE OF
RETURN TO
CAPITAL

LEVERAGE

RETURN ON

Figure 1.--Total profitability model, 27 wholesale foliage plant nurseries in
South Florida, 1986

Factors Associated With Level of Profit (Table 14)

In this section, information presented earlier is re-grouped to concentrate
attention on factors that are generally deemed related to level of profit in a
foliage nursery. The factors are presented in the same sequence that they
appeared before. But here, the average for all 27 nurseries is compared with
the average for the nine most profitable and the nine least profitable of the
nurseries participating in the program. As will be seen, profit or lack of
profit does not depend upon performance in any single area, but, rather, on the
balance of performance in all areas. Nevertheless, nursery operators analyzing
their own operations may find this section especially valuable for indicating
the general area of their business needing additional study and analysis.
"Net nursery income" from Table 12 was selected as the indicator for level of
profit. Average for all 27 nurseries was $283,308. The most profitable third
"of the nurseries averaged 2.46 times this amount, or $612,934. The least
profitable third lost $7,860. The following compares the average for these
-three groupings of foliage nurseries using "The one best measure" Indicator from
a number of the proceeding tables.
Size of Business
The indicator of size of business selected from Table 1 was "Value of own
plants sold." This figure does not include sales of plants "brokered" or pur-
chased for immediate resale. The 27 nurseries averaged $1,233,590. The most
profitable third had $2,677,527 in sales, or 2.17 times more. The least
profitable group averaged $386,168, or about 31 percent of the average. This
does not mean that small businesses cannot be profitable, but it does indicate
that larger profits tend to be associated with higher dollar volumes.
Production Rate
The indicator of rate of production selected from Table 2 was "Value of own
plants sold per square foot of total bed and bench space." In general, other
things being equal, increasing sales per square foot of total bed and bench
space should increase the profitability of a nursery operation, hence it is
desirable. The average for all 27 nurseries was $1.44 per square foot. The
most profitable third were two cents below the average, or $1.42, and the least
profitable third averaged $1.60, or 16 cents above the average.

These figures show that higher sales per square foot of bed and bench space
In a nursery do not necessarily accompany higher profits. However, lower sales
per square foot may indicate a number of things, such as devoting excessive
space to stock plants, letting plants continue to grow after reaching salable
size, letting space sit vacant too long between the time a plant is sold and
another is put in place to start growing again, selecting varieties that grow
slower or are priced low relative to their growing time and space requirements,
and having disease and quality problems that reduce yields of salable plants.
In addition, nursery layout and fertilizing and growing techniques can alter
the time and space used for the same crop in two different nurseries. Also,
different marketing programs can alter the returns received for the same crop.

Table 14.--Factors associated with level of profit, 27 wholesale foliage plant
nurseries in South Florida, 1986.

Item Unit Average Average 9 Average 9 Your
all 27 most profit least profit nursery
Level of profit
Net nursery income (Table 12) $ 283,308 612,934 ( 7,860)
Factors associated with level of profit
Size of business (Table 1)
Value of own plants sold $ 1,233,590 2,677,527 386,168

Production rate (Table 2)
Sales/sq ft of total
bed and bench space -- $ 1.44 1.42 1.60

Labor efficiency (Table 3)
Own plant sales/employee $ 40,898 46,036 33,823

Space use intensity (Table 4)
Annual turnover of plant
inventory value - % 168.6 203.0 124.2

Use of capital (Table 5)
Annual turnover of owned
capital value - - % 78.1 88.3 61.5

Level of costs (Table 8)
Cost/sq ft of total bed space- $ 1.58 1.48 2.14

Cost efficiency (Table 10)
Cost/$ sales adjusted for
change in inventory value $ 0.99 0.92 1.29

Labor Efficiency
The indicator of efficiency in the management and use of labor selected from
Table 3 was "Value of own plants sold per employee." Average for all 27
nurseries was sales of $40,898 per person. Sales for the most profitable third
of the nurseries were 12.6 percent higher than average at $46,036. Sales for
the least profitable third of the nurseries was around 87 percent of the average
at $33,823.
Generally, a higher sales figure per employee is considered an indication of
true efficiency, hence something for which to strive. On the other hand, there
are times when, if viewed together with other indicators, a higher sales per
employee figure might have resulted instead from a less than optimum number of
employees for volume of plants being handled. This could result in tardy or
untimely plant care, hence, slower growth and lower quality plus a failure to
restock empty space promptly. In this case, other indicators such as production
rate, space use intensity, capital turnover, and costs per square foot would not
support the labor efficiency indicator.
Lower sales per employee can result during periods of rapid expansion when
extra help is needed to care for larger numbers of plants before they begin
reaching salable size. Or it can also be the result of difficult economic times
when sales are slow, but plant care must go on. Differences between nurseries
can be the result of differences in investment in labor saving capital items,
the result of any or all of the factors noted above that lower production rate,
or the result of poor management practices in the planning and utilization of
labor.
Space Use Intensity
The indicator of intensity In the use of space selected from Table 4 was
"Annual turnover of plant inventory value." Generally speaking, larger per-
centage turnover numbers are desirable, because they indicate that the value of
money tied up in inventory is being revolved faster. Average turnover was 168.6
percent, meaning that the value of own plants sold was 1.686 times the average
investment in plant inventory. For the most profitable third, it was 203.0 per-
cent. For the least profitable third, it was 124.2 percent.
Reduced intensity of space use may be the result of factors that increase the
amount of money invested in inventory such as excessive investment in stock

plants, rapid expansion of the business so that plant values are up although
accompanying sales have not yet started, poor labor management so there is not
enough labor at crucial times for rapidly refilling empty space, selecting
varieties that grow slowly relative to the price they receive, inadequate fer-
tilization program resulting in slow plant growth, or holding plants too long
after they reach salable size. Or it can be the result of any of the items that
reduce sales volume for a given nursery as mentioned earlier. Either over or
under valuing Inventory can also change the intensity of use figure. However,
variations in the indicator for this reason are ficticious, and do not provide a
sound basis for management evaluations or decisions.
Use of Capital
The indicator for efficiency in the use of capital selected from Table 5 was
"Annual turnover of owned capital value." This is expressed in percent. In
general, larger percentage turnover numbers are desirable, for they indicate
greater sales per dollar of investment in the nursery.
Annual turnover of owned capital averaged 78.1 percent, meaning that the
value of own plants sold during the year amounted to slightly more than three-
quarters of the capital invested. For the most profitable third, it was 88.3
percent. The rate for the least profitable third was considerably lower than
the average at 61.4 percent. They require about one and a half years of sales
to turn capital once.
Problems that lower turnover rate include any of the items already mentioned
that lower the rate of production (hence the sales volume for a given nursery
investment). Low capital turnover is particularly common in nurseries just
getting started, or in nurseries that are expanding rapidly. Excessive
investments in land, labor saving machinery and equipment, or expensive (though
maybe unnecessary) niceties will also tend to lower capital turnover rate.
Level of Costs
The indicator of level of costs selected was "Costs per square foot of total
bed and bench space" from Table 8. This is a traditional indicator for
comparing costs between nurseries. Other things being equal, a lower cost per
square foot is desirable.
Costs per square foot of total bed and bench space averaged $1.58, or 14
cents more than sales per square foot before adjusting changes in plant
inventory value ($1.44). For the most profitable third, costs were $1.48 per

square foot or ten cents less than the average and six cents more than sales per
square foot ($1.36). The least profitable third averaged $2.14 cents, which was
$.54 per square foot more than sales ($1.60).
Problems that cause costs per square foot to increase include inefficient
planning and utilization of labor, Insufficient investment in labor saving cap-
ital items, destruction or theft of supplies and plants, not checking for best
price before purchasing needs, and not carefully managing the nursery operation.
Other causes of increased costs may not be a problem if they result in increased
revenue. One example might be increased costs for sleeves and packaging in
order to satisfy the requirements of a premium market.
Costs Efficiency
The indicator of cost efficiency selected was "Cost per dollar of sales
adjusted for change in plant inventory." This shows how well the nursery did in
total, cash plus change in inventory values. In general, lower costs per dollar
of sales are desirable.
The average cost .per dollar of sales adjusted for change in value of plant
inventory for the 27 nurseries was 99 cents. The similar figures for the most
Profitable and least profitable third of nurseries was 92 cents and $1.29.
Thus, the least profitable third of nurseries had a deficit in meeting all costs
of 29 cents per dollar of sales adjusted for change in plant inventory value.

Range of Figures (Table 15)

In this section, the average for all 27 nurseries is repeated for ease of
comparison. The remainder of the table differs from the previous section in
that the three best and three worst numbers for each factor were averaged to
provide the range of high-low figures shown. In the previous section, figures
for all factors were for the same groups of high profit and low profit nurser-
ies. This section shows the average for the best three and worst three numbers
regardless of the nursery or profit level to which they belong.
As can be seen in Table 15, quite a range of figures was found for most of
the factors. Nursery operators analyzing their own operation should be suspi-
cious about any of their figures that fall outside these ranges. The discussion
of things that contribute to variations in the figures in the previous section
would also apply here.

Seasonality of Sales (Figure 2)

Figure 2 compares the average monthly sales of the 27 nurseries with the
average annual total costs per month and average annual cash costs per month.
Sales were strong in January, then dropped in February, rose to a peak in March
and April, dropped again in May and rose again in June. Then sales dropped in
July to the season's low in August. Sales rose again in September, dropped
again in October and November, then reached the another peak in December.
Sales averaged above the annual cash cost per month all year. However, sales
equaled or exceeded annual average total cost per month In only six months of
the year. These were January, March and April, June, September and December.
For the other six months, sales averaged below average annual total costs.

Table 15.--Range of figures on factors associated with level of profit,
wholesale foliage plant nurseries In South Florida, 1986

Average 3 best 3 worst
Item Unit all 27 factor factor Your
nurseries average average nursery
SLevel of profit
Net nursery income (Table 12) $ 238,308 1,555,416 ( 77,725)
Factors associated with level of profit
Size of business (Table 1)
Value of own plants sold $ 1,233,590 6,332,828 48,686

Production rate (Table 2)
Sales/sq ft of total
bed and bench space - $ 1.44 7.37 0.50

Labor efficiency (Table 3)
Own plant sale/employee- $ 40,898 63,677 11,968

Space use intensity (Table 4)
Annual turnover of plant
inventory value - % 168.6 1038.1 45.6

Use of capital (Table 5)
Annual turnover of owned cap-
ital value - - % 78.1 145.1 30.1

Level of costs (Table 8)
Cost/sq ft of total bed space- $ 1.58 0.78 7.88

Cost efficiency (Table 10)
Cost/$ sales adjusted for
change in inventory value $ 0.99 0.69 1.62

S~e-- '----~~----~-------s~------ -- a-__

CONCLUDING COMMENTS

Nursery operators who are interested in seeing how they compare with those
participating in the Florida Nursery Business Analysis Program may calculate
their own numbers using the formulas shown and write the results on the lines of
each table provided for this purpose. Another alternative is to acquire the
University of Florida microcomputer program, FOLAGNBA.BAS, for making these
calculations. Either alternative should provide some valuable insight into the
business side of operating a foliage nursery. It should improve management
decisions concerning things that affect the profitability of the nursery
operation.
Nursery operators who find this kind of information to be useful, but have
difficulty finding the time or energy to engage in the tedium of doing their own
calculation may wish to consider becoming a participant in the Florida Nursery
Business Analysis Program. If you would like to do so, contact the ornamental
agent in your nearby county Extension office, or contact the authors in
Gainesville. Nursery operators who authorize a commercial accounting firm to
supply the data required for the program can participate with a minimum of
effort on their part.

120

118

116-

114 ANNUAL AVERAGE MONTHLY TOTAL COSTS

112-

110-

108-

106-

104 AVERAGE MONTHLY SALES

102

100 -

98

96

94
ANNUAL AVERAGE MONTHLY CASH COSTS

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

MONTH
Figure 2.--Monthly sales compared to average monthly costs, 27 wholesale foliage plant nurseries in South
Florida, 1986

	Front Cover
	Abstract
	Table of Contents
	List of Figures
	Main