Sunny Hotel, a reputable hot spring area and resort, reports a net loss of $(12,000) forits financialyear ended 31 December 2019. The net lossincluded $90,000 loss from fireaccident which damaged the existing equipment system.The company purchased a new equipment system for $800,000 to replace the damaged one.Sunny's main categories of cash flows were summarized as follows:

Net cash flow from operating activities$345,000

Net cash flow from investing activities (365,000)

Net cash flow from financing activities 13,000

Net cashoutflow $(7,000)

Required

Evaluate Sunny Hotel's cash flow for 2019. Explain 2 reasons for your evaluation.