Adam Tomulka is founder and owner of a Beach Body Ltd health club. His club operates in Toronto, Ontario and has been in the same location since 2014. The health club offers a variety of services to its members (group classes, personal training etc.). The club also will put on special fitness events. The fitness facility has everything - free weights, squat racks, cardio machines (treadmills, bikes and ellipticals), yoga mats, stability balls, pull-up bars, etc. Since Adam charges a premium for the membership to the club, he is constantly looking at updating and expanding the fitness equipment. This past year he purchased a number of weighted battle ropes, new rowing machines a number of additional kettle bells. You have been presented with the following summarized information from his statement of cash flows for the year ended December 31, 2019:

Cash from operations	2,250
Cash from investing activities	(26,250)
Cash from financing activities	18,300

Adam is a good friend of your and provided the following statement: "My accountant is preparing our financial report and she told me that my business is facing cash flow problems." Adam wants your help understanding how the Statement of Cash Flows will assist in managing the business. In your response, include the following

• What was the net change in cash for the period?
• Examine the cash flow pattern for Beach Body Ltd. What does this pattern say about the situation the company is in? Was his friend justified in saying that the business may be facing cash flow problems?
• Explain each type of cash flow and provide an example of the types of transactions that make up the operating, investing and financing section of cash flow statement.
• Explain the potential causes of cash flow problems, as well as proposed solutions to solve the cash flow problems.

Prepare a reply for Adam.