Resource Book on Horticulture Nursery Management

indicator of long-term solvency. Higher values indicate greater risk, with potential
for both greater returns and greater losses. There was no consistent trend in
leverage with respect to firm size or profitability. Generally, leverage factors
below 2.0 are considered to represent a very safe financial position. The impact of
financial leverage on profitability can be understood as a multiplier (leverage
multiplied by the rate of return to capital assets equals the rate of return on net
worth). Since leverage is always greater than or equal to one, return on net worth
is always greater than rate or return on capital assets, either positively or
negatively.
8.3 Glossary
Annual: A plant in which the entire life cycle is normally completed in a single growing
season.
Asset: An asset is a resource controlled by the entity as a result of past events and from
which future economic benefits are expected to flow to the entity
Demand: It is the desire to own anything, the ability and willingness to pay for it.
Depreciation: Depreciation is the gradual and permanent decrease in the economic value
of the capital stock of a firm, nation or other entity, either through physical
depreciation, obsolescence or changes in the demand for the services of the capital
in question.
Income: Income is the consumption and savings opportunity gained by an entity within a
specified time frame, which is generally expressed in monetary terms.
Interest: Interest is a fees paid on borrowed assets. It is the price paid for the use of
borrowed money or money earned on deposited funds.
Labor: Labour is a measure of the work done by human beings.
Liability: Liability is defined as an obligation of an entity arising from past transactions
or events, the settlement of which may result in the transfer or use of assets,
provision of services or other yielding of economic benefits in the future.
<strong>Resource</strong>: A resource is any physical or virtual entity of limited availability that needs to
be consumed to obtain a benefit from it.
Supply: Supply is the amount of some product which is available to customers.
8.4 Points to Remember
� Ornamental trees are classified as flowering trees which bears flower and foliage or
are shade trees which have a dense canopy.
� Shrubs are perennial plants with many woody branches. Climbers have weak stem
and ability to climb on support.
� Edges are live plants small in height and hedges are tall in height and used
continuous to obtain a screening effect.
� Cactus and succulents are able to withstand in dry and drought conditions.
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