Frank A. Dasse
Carolyn A. Alm

Business

Economic Information

erer Report 44

Analysis of Landscape

Nurseries in Florida, 1974

-S.

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

November 1975

ABSTRACT

This report presents average costs and
wholesale ornamental landscape nurseries in
year. Nursery farm income averaged $30,161
Average total sales and average total costs
There was a decrease in the plant inventory
year.

returns information for four
Florida for the 1974 tax
in 1974, an increase of 58%.
each increased 33% over 1973.
value of $37,116 during the

Key words: landscape nursery, wholesale, production, efficiency,
profit, costs, returns.

ACKNOWLEDGMENTS

Special appreciation is expressed to the landscape nurserymen who
participated in the program by making available data on their business
operations on a confidential basis. Thanks also are due for the time
they spent explaining when questions arose. Appreciation is expressed
to the county agents for their assistance during the data gathering
stage. It is sincerely hoped that these data will be useful to all
nurserymen--those who participated as well as those who did not--when
they appraise their business as well as when they must make management
decisions.

TABLE OF CONTENTS
Page

ACKNOWLEDGMENTS . . . .. . i

LIST OF TABLES . . . .... . ii

INTRODUCTION . . . ... .. . 1

DEFINITION OF TERMS . .... .. .... 2

OBSERVATIONS AND COMMENTARY . . .... .. 2

DATA PRESENTATION . . . . ... .. 3

LIST OF TABLES

Table Page

1 Size of business, four landscape nurseries in Florida,
1974 . . . . . . 4
2 Rates of production, four landscape nurseries in Florida,
1974 . . . . . . 5
3 Labor efficiency, four landscape nurseries in Florida,
1974 . . . . . . .. 6
4 Efficiency in use of capital, four landscape nurseries
in Florida, 1974 . . . . . 7
5 Efficiency in use of space, four landscape nurseries in
Florida, 1974 . . . . . .... 8
_6 Comparison of certain costs and returns measure, four
landscape nurseries in Florida, 1974 .... ... 9
7 Average dollar costs per nursery for various categories
of expense, four landscape nurseries in Florida, 1974 ... 10
8 Percent of total costs for various categories of expense,
four landscape nurseries in Florida, 1974 . .. 11
-9 Average costs per dollar of sales with sales adjusted
for plant inventory change, four landscape nurseries
in Florida, 1974 . . . . . 12
10 Average costs per dollar of sales without adjustment of
sales for plant inventory change, four landscape nurseries
in Florida, 1974 . . . . . 13

LIST OF TABLES-Continued

Table Page

11 Income summary, four landscape nurseries in Florida,
1974 . . . . . . 14
12 Factors usually associated with level of profit, four
landscape nurseries in Florida, 1974 . ... 15

BUSINESS ANALYSIS OF LANDSCAPE NURSERIES IN FLORIDA: 1974

Frank A. Dasse and Carolyn Almeter

INTRODUCTION

This is another in the line of business analysis reports which was
started by Dr. E. W. "Ned" Cake a number of years ago. The purpose in
the beginning was and still is threefold: (1) to furnish data to
the cooperating nurserymen which indicate various economic or statisti-
cal measures that they may use in judging their own operations and com-
pare with that of their peers; (2) to supply data to all nurserymen
in Florida so that they may make meaningful decisions in their own oper-
ations; and (3) to provide the numerous Extension personnel throughout
Florida data which they can use in farm management decisions involving
nurserymen in their area.
This is by no means a statistical sample of landscape nurseries.
The four nurserymen who contributed to this report joined the program a
number of years ago and elected to continue. The data presented refer
to the 1974 tax year, which may not conform in all cases to the 1974
calendar year.
In order to assemble the tabulation of data which are presented as
averages later in this report, a predetermined minimum number of figures
were sought from the contributing nurserymen. From these data.the
tables were constructed. Each table has a "one best measure" which is
followed by a number of "other useful indicators".

FRANK A DASSE was an assistant research scientist in the Food and
Resource Economics Department. CAROLYN ALMETER is a statistical aide
in the Food and Resource Economics Department..

DEFINITIONS OF TERMS

Most of the terms used in the tables are self-explanatory. They
have been used similarly in past reports. For those who are not
familiar with the terminology a number of definitions are presented.
Value of own plants sold--This represents the total plant sales
minus the cost of plants purchased for immediate resale. Plants pur-
chased for growing-on are not deducted.
Square foot equivalent of own plants sold--Each piece of material
sold is credited with taking up a specific amount of land space expressed
in square feet depending upon field spacing.
Percent turnover of capital annually--A ratio which is derived by
dividing the value of own plants by the total capital employed in the
enterprise.
Percent of production area turnover annually--The square foot equi-
valent of own plants divided by the total production area of the nursery.
Labor income--The residual when total costs less operator's salary
are deducted from total gains.
Nursery "farm income"--Labor income plus the calculated desired
return on investment calculated in non-cash costs.
Net return--Labor income less operator'ssalary or total gain less
total costs.
Return to capital--Nursery farm income less operator'ssalary.
Percent return to capital--Return to capital divided by total
owned capital.

OBSERVATIONS AND COMMENTARY

There were only four landscape nurseries which participated in this
analysis. Two nurseries enjoyed reasonable to healthy gains. One made
moderate improvement and the last had a rather bad year. The best and
poorest profit performers were located in the "Gold Coast" area so that
conditions that affected one should have affected the other. Sales of
the four increased 9 percent while nursery farm income rose almost 50 per-
cent. Because the sample is so small very little in the way of interpre-
tation beyond the presentation of the data will be attempted.

DATA PRESENTATION

The data in Tables 1 through 12 relate to the size of business,
rates of production, labor efficiency, capital efficiency, space
efficiency, costs and returns, income and other factors for nurseries
classified by volume of sales.
It is not claimed that any progress that may have been made by
the nurseries over the years is due to their participation in this
business analysis program. The study does, however, show each cooper-
ating nursery how it compares with respect to each factor in the analy-
sis.

Table l.--Size of business, four landscape nurseries in Florida, 1974

Average
Item all 4 Your
nurseries nursery

The one best measure
Total sales of services
plants, materials, etc.

Other useful indicators
Total sales above adjusted
for plant inventory change
Square foot equivalent own
plants sold
Square foot equivalent own
plants sold adjusted for
plant inventory change
Average square feet of own
plants in production
Average acres equivalent
own plants in production
Average number of employees
Estimated hours employee time

Capital owned
Growing plants
Land
Machinery & equipment
Buildings, fences, wells,etc.
Supplies
Total owned capital

Capital managed
Growing plants
Land
Machinery & equipment
Buildings, fences, wells, etc.
Supplies
Total managed capital

$ 867,961

$ 830,845

$ 231,334

$ 221,442

$1,468,261

33.71
54.89
114,171

$ 210,182
26,250
58,355
16,182
16,033
327,001

210,182
103,856
58,355
41,182
16,033
$ 429,607

$

$

$

$

Table 2.--Rates of production, four landscape nurseries in Florida, 1974

Average
Item all 4 Your
nurseries nursery

-----------Dollars-----------
One best measure
Square foot equivalent of own
plants sold adjusted for plant
inventory change per acre in
production 6,570

Other useful indicators
Square foot equivalent of own
plants sold per acre in
production 6,863

Total sales adjusted for plant
inventory change per acre in
production 24,649

Table 3.--Labor efficiency, four landscape nurseries in Florida, 1974

Average
Item all 4 Your
nurseries nursery

One best measure
Total sales of services, plants
materials, etc., per employee

Other useful indicators
Total sales of services, plants
materials, etc., adjusted for
plant inventory change per
employee
Square foot equivalent of own
plants sold per employee
Square foot equivalent of own
plants sold adjusted for plant
inventory change per employee
Average square feet in
production per employee

15,813

$

$

15,137

4,215

4,034

26,749

Table 4.--Efficiency in use of capital, four landscape nurseries in
Florida, 1974

Average
Item all 4 Your
nurseries nursery

One best measure
Percent of own capital
turnover annually 265.43 %

Other useful indicators
Percent of managed capital
turnover annually 202.04 %
Capital owned:
Per employee 202 $
Per acre 9,701 $
Capital managed:
Per employee 7,827 $
Per acre 12,745 $
Capital managed investment:
Per employee in:
Plants 3,829 $
Land 1,892
Machinery & equipment 1,063
Capital managed investment:
Per acre in:
Plants 6,236 $
Land 3,081
Machinery & equipment 1,731
Percent of capital managed in:
Plants 48.92 %
Land 24.17
Machinery & equipment 13.58
Buildings, fences, wells, etc. 9.59
Supplies 3.73
Total 100.00 %

Table 5.--Efficiency in use of space, four landscape nurseries in
Florida, 1974

Average
Item all 4 Your
nurseries nursery

One best measure
Percent of production area
(or plant) turnover annually 15.76% %

Other useful indicators
Percent plant turnover with
square foot equivalent of own
plants sold adjusted for plant
inventory change 15.08% %
Average value of plant
inventory per acre in
production $6,235.61 $

Table 6.--Comparison of certain costs and returns measures, four land-
scape nurseries in Florida, 1974

Average
Item all 4 Your
nurseries nursery

----------Dollars---------
Returns
Total sales of services,
plants, materials, etc. per
hour of employee time 7.60

Costs
Total costs per hour
of employee time 7.68

Difference between
Total sales and costs per
hour of employee time -.07

Price goal
Total sales per hour of
employee time which would
have been required to yield
a 15% return on investment
(not including plant inven-
tory increase as part of
return) 7.88

aCalculated by dividing item 8 in Table 1 into item 1 of .that
table.

bCalculated by dividing item 8 in Table
Table 7.

1 into total costs in

Table 7.--Average dollar costs per nursery for various categories of
expense, four landscape nurseries in Florida, 1974

Average
Item all 4 Your
nurseries nursery

----------Dollar----------

Cash costs

Materials and supplies
Wages, salaries, and commission
Operators' salaries
Equipment operating expense
Insurance
Taxes, licenses and bonds
Advertising
Repairs
Utilities
Rent--land and/or buildings
Other expenses
Total cash costs

Non-cash costs

Depreciation machinery & equipment
Depreciation bldgs, wells, roads, etc.
Inventory decrease on supplies
Interest on capital @ 8%
Total non-cash costs

Total all costs

235,670
358,357
39,218
23,378
23,753
28,850
7,195.
40,951
7,054
13,842
48,763
827,029

20,110
3,171
0
26.160
49.442

876,471

Table 9.--Average costs per dollar of sales with sales adjusted for
plant inventory change, four landscape nurseries in Florida,
1974

Average cost per $ sales with sales
adjusted for plant inventory change
All 4 Your
nurseries nursery

Cash costs

Materials and supplies
Wages, salaries and commission
Operators' salaries
Equipment operating expense
Insurance
Taxes, licenses and bonds
Advertising
Repairs
Utilities
Rent--land and/or buildings
Other expenses
Total cash costs

Non-cash costs

Depreciation machinery & equipment
Depreciation bldgs, wells, roads, etc.
Inventory decrease on supplies
Interest on capital @ 8%
Total non-cash costs

Total all costs

-------------Cents------------

28.37
43.13
4.72
2.81
2.86
3.47
0.87
4.93
0.85
1.67
5.87
99.54

2.42
0.38
0.0
3.15
5.95

105.49

Item

Table 8.--Percent of total costs for various categories of expense,
four landscape nurseries in Florida, 1974
Average

Item

Cash costs
Materials and supplies
Wages, salaries and commission
Operators' salaries
Equipment operating expense
Insurance
Taxes, licenses and bonds
Advertising
Repairs
Utilities
Rent--land and/or buildings
Other expenses
Total cash costs
Non-cash costs
Depreciation machinery & equipment
Depreciation buildings, wells, roads, etc.
Inventory decrease on supplies
Interest on capital @ 8%
Total non-cash costs
Total all costs

all 4 Your
nurseries nursery
---------Percent---------

26.89
40.89
4.47
2.67
2.71
3.29
0.82
4.67
0.80
1.58
5.56
94.36

2.29
0.36
.0
2.98
5.64
100.00

r

Table lO.--Average costs per dollar of sales without adjustment of
sales for plant inventory change, four landscape nurseries
in Florida, 1974

Average costs per $ sales without
adjustment of sales for plant
Item inventory changes
All 4 Your
nurseries nursery
-------------Cents-------------

Cash costs

Materials and supplies
Wages, salaries and commission.
Operators' salaries
Equipment operating expense
Insurance
Taxes, licenses and bonds
Advertising
Repairs
Utilities
Rent--land and/or buildings
Other expenses
Total cash costs

Non-cash costs

Depreciation machinery & equipment
Depreciation bldgs, wells, roads, etc.
Inventory decrease on supplies
Interest on cpaital @ 8%
Total non-cash costs
Total all costs

27.15
41.29
4.52
2.69
2.74
3.32
0.83
4.72
0.81
1.59
5.62
95.28

2.32
0.37
0.0
3.01
5.70
100.98

Table ll.--Income summary, four landscape nurseries in Florida, 1974

Average
Item all 4 Your
nurseries nursery

Value of production & other gain

Income from services, plants
materials, etc.
Inventory increase own plants
Inventory increase for supplies
Miscellaneous cash income
Total gain

Cash costs less operator's salary
Non-cash costs
Total gross costs

Labor income
Interest on investment
Nursery "farm income"
Operator's salary
Net return
Return to capital

Percent return to capital

----------Dollars----------

867,961
-37,116
8,706
1,703
841,254

787,811
49,442
837,253

4,001
26,160
30,161
39,218
-35,217
9,057

2.77% %

Cents per hour of employee time
------------Cents--------

Labor income
Nursery "farm income"
Net return
Return to capital

4
26
-31
-8

Table 12.--Factors usually associated with level of profit, four land-
scape nurseries in Florida, 1974

Average
Factor all 4 Your
nurseries nursery

Profit

Nursery farm income $ 30,161 $

Sales & inventory gain
Gain in sales & plant
inventory value over
previous year $ 83,774 $

Level of cost
Cost per $ of sales
and plant inventory
value increase 105.49% %

Size of business
Total sales of services,
plants, materials, etc. $867,961 $

Sales price level
Difference between sales
value & costs per hour of
employee time .07 __

Production rate
Square foot equivalent own
plants sold adjusted for plant
inventory change per acre in
production 6,570 sq.ft.

Labor efficiency
Total sales per employee $ 15,813 $

Capital use efficiency
Percent of capital turnover 265.43% %

Space use efficiency
Percent plant turnover 15.76% %

	Front Cover
	Abstract
	Acknowledgement
	Table of Contents
	Main