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For more information about the 2001 Operating Cost Study contact:
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HERNDON, Va., and WASHINGTON - The Associated Landscape Contractors of America (ALCA) and the American Nursery & Landscape Association (ANLA) have published the 2001 Operating Cost Study. Based on data from 2000, the study provides detailed financial results from 233 participating landscape firms.
The Operating Cost Study features statistics compiled from participating firms’ income statements, balance sheets and operating data. The information provides comprehensive guidelines for analyzing profitability among landscape companies.
In 2000, the typical ALCA/ANLA firm responding to the survey had sales of $1,700,757 and produced a pre-tax profit of 4.0 percent. To achieve these numbers, the typical firm committed $503,183 in assets to the business. The result is a return on assets of 13.6 percent (profit before taxes expressed as a percentage of total assets).
The above results for a typical company are reported as a median, or the middle number of all values reported arrayed from lowest to highest. Given the diversity of operating companies in the industry, performance is broken down into the following lines of business:
- Exterior design/build;
- Exterior installation contracting;
- Exterior maintenance; and
- Interior landscaping.
The table below summarizes the critical profit variables for the typical contractor and by each business segment.
| The Critical Profit Variables | |||||
| Typical Contractor | Exterior Design/Build | Exterior Installation Contracting | Exterior Maintenance | Interior Landscaping | |
| Sales Per Employee - measures employee productivity |
$69,917 | $80,989 | $77,926 | $62,370 | $49,259 |
| Gross Margin - reflects the ability to manage direct job costs effectively |
44.1% | 43.6% | 39.0% | 46.9% | 50.0% |
| Operating Expense Percentage - focuses on expense control |
39.1% | 38.4% | 34.1% | 41.5% | 47.4% |
| Inventory Turnover (times) - shows how well inventory is managed |
10.2 | 4.9 | 14.6 | 11.5 | 9.0 |
| Average Collection Period (days) - reflects accounts receivable collection practices |
36.2 | 32.6 | 45.3 | 36.2 | 40.0 |
Information reprinted with permission from the Associated Landscape Contractors of America and the American Nursery & Landscape Association.
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