Please use this text as ref: Foundations of Financial Management, 14th ed. by Block, Hirt, and Danielsen Early in 2012, you deliver the financial

please see attach document:1.Early in 2012, you deliver the financial statement data below to a client. (note: income statement data is for 2011 only.)After a quick review, your client exclaims, " How can I be profitable, I borrowed $40,000 from the bank and my cash decreased by $2,000? I must have incurred a net loss."Explain to your client why the $40,000 loan and the $2,000 decrease in cash did not affect profitability.Calculate your client’s free cash flow.