The ship floats on the basis of Archimedes' law, which says when a ship is in water, it displaces the volume of water that is equal to the weight of the ship. As long as the volume of displaced water is at least equal to the ship's weight, the ship floats. When there is a hole in the ship, the amount of water enters the ship's hull, and the balance between displaced water and the weight of the ship becomes unbalanced, the ship begins to sink. In other words, due to the hole, the weight of the ship can not produce enough amount of displaced water.
