Cash Runway Calculator

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Illustrative calculation; verify inputs and assumptions before relying on it.

Runway (months)—

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Runway (months) = Cash Balance / Monthly Net Burn
Variable Meaning
Cash Balance Cash and cash equivalents currently in the bank.
Monthly Net Burn Cash spent per month net of cash collected.

Worked example

Cash Balance
$1,200,000
Monthly Net Burn
$100,000
→ Runway (months)
12

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What Runway measures

Published by 4NLab · Updated · Our methods

Runway is the number of months a company can keep operating before running out of cash, given its current cash balance and net burn rate.

Prepare your inputs

  1. Choose the cash that is actually available for operations. Identify restricted amounts and any minimum reserve you want to preserve.
  2. Estimate monthly net cash outflow from operations. Look beyond a single month if annual prepayments or large bills distort the recent result.
  3. Divide available cash by monthly net burn. Then stress the estimate with slower collections, lower sales, or planned cost increases.

Formula

Runway (months) = Cash Balance / Monthly Net Burn
Variable Meaning
Cash Balance Cash and cash equivalents currently in the bank.
Monthly Net Burn Cash spent per month net of cash collected.

Check the sample calculation

Worked example

Cash Balance
$1,200,000
Monthly Net Burn
$100,000
→ Runway (months)
12

Before using the result

  • Do not count unsigned financing or uncertain receivables as available cash.
  • At zero or negative net burn, a finite cash-exhaustion date cannot be calculated from this model. That does not eliminate future cash risk.
  • A cash reserve, debt repayment, or annual vendor bill can create a constraint before the modeled balance reaches zero.

A dash means the result is undefined for the inputs, such as division by zero. Review the assumptions and input errors before interpreting it.

Read the Runway guide for a business scenario, interpretation, and frequently asked questions.

Sources and methodology

The references below explain the underlying methods. Our worked scenarios use hypothetical figures; they are not company results or current market benchmarks.

Found an error or a definition that differs from your reporting? Send a correction with the page URL and the method you use.