LFK is a coal－mining business．It has 135 employees who are all provided with training．After the dismissal of one of LFK＇s employees there is a job vacancy for a new supervisor．External recruitment will be used．The Managing Director is preparing a cash flow forecast for LFK．An extract is shown in Table 3．1． Identify four reasons why a cash flow forecast might be useful to a business. Reason 1: Reason 2: Reason 3: Reason 4:

Award 1 mark for each relevant reason (max 4).
Points might include:
- Help support a loan application / attract investors
- Can identify (possible causes of) cash flow problems
- Help (financial) planning / budgeting / manage cash flow better / help avoid cash flow problems or insolvency
- Identify how much a business might need to borrow/size of overdraft
- Identify whether the business will be holding too much cash that could be put to better use
- Helps with decision making / decide if expansion is possible

Other appropriate responses should be credited.