Consider the following Proprietorship. Tiffany Collins is the owner and operator of an interior decorating business called "Tiffany’s." It is Tiffany's first year in business. Tiffany started her business with a personal cash investment of $20,000. Her business also borrowed $20,000 additional cash from the Bank. By the end of the first year cash was down to $7,000. Tiffany's only other assets were $18,000 of accounts receivables from customers and $50,000 of new equipment which she bought at the end of the year. She paid cash for the equipment. During her first year, Tiffany managed to lower her debt - she now owes the Bank only $15,000. The Bank loan is her only liability. There were no withdrawals from the business this year.

Since Tiffany's only has $7,000 of cash left in her business, she is considering going out of business Tiffany has told you "how can I stay in business when, in only 1 year, I have lost most of the cash I started with.

Advise Tiffany Is she better off now than she was at the beginning of the year?