EVALUATION OF THE SUCCESS OF BUSINESS
...d suffer a great loss. The financial position as it stands as of August 31st, John is not in a position to be able to repay the $3,000 loan owed to his uncle. There is a possibility of reinvesting the loan to continue operating the business for the following summer, however if the loan has to paid out, John would be in a financial crisis. In addition, if the assets do need to be sold to cover the cost of liabilities, it should be noted that some assets have a high depreciation rate and may not be of much value if sold. Moreover, for the business to continue its operation the following summer additional supplies will be needed since current supplies are only of $75 in value and paint is of $0. Therefore, additional supplies and paint will need to be purchased. To cover the cost of these expenses, John will either have to use his available liquid assets or seek additional means of funding, whether it be a loan from the bank or from his uncle. In conclusion, although John has been able to carr...