The White Dog Cafe

On the surface, this business appears to be in financial distress. Sales are consistent and gross profit appears healthy, but the company’s liabilities consistently exceed their assets and equity is negative. With the exception of 2007, long-term debt to their shareholder has increased annually. From the information available, it appears that the business is being kept afloat by financial infusions from the shareholder. Further investigation into accounting practices and the flow of money between the sole shareholder and the corporation need to be investigated to fully understand what is going on with this business. From the available information, it does not look promising.