Runway Calculator

Why this question matters

Cash runway answers a narrow but useful question: if the current recurring cash pattern continued, how long would the available cash support the shortfall? It can help a founder recognise the time available to investigate a problem and implement a response. The measure is useful for an established business with temporary cash burn as well as a new venture. It should not be mistaken for a forecast of survival or a deadline that will unfold exactly as displayed.

Begin with cash that can actually fund the operation. An unpaid invoice is not available cash, and a promised investment is not available cash until it is accessible. Exclude restricted money and amounts held for others. If several bank accounts belong to the same operating scope, reconcile them before adding balances. Keep personal reserves separate unless there is a deliberate and documented decision to make them available to the business.

Use recurring monthly cash receipts and payments, rather than accounting revenue and expense. Receipts may relate to sales from an earlier month, while payments may include obligations that are not recorded as a current operating expense. Look at several recent months if one month was unusual. If the business is seasonal, compare the coming period with the relevant trading pattern instead of assuming that the most recent month will repeat.

Understand the method

1. Monthly net burn = monthly payments − monthly receipts.
2. Runway months = available cash ÷ positive monthly net burn.

Monthly net burn equals monthly cash payments less monthly cash receipts. When that difference is positive, the calculator divides available cash by it to produce runway in months. A larger cash balance extends the modelled runway, while a larger recurring shortfall reduces it. The arithmetic is deliberately simple so that the assumptions remain visible. The practical value comes from checking those assumptions and identifying which ones management can change.

When recurring receipts equal or exceed recurring payments, the tool reports no finite burn runway. That means the entered recurring pattern is balanced or cash positive. It does not mean the business has unlimited resources. A large annual payment, a delayed customer receipt or a necessary asset purchase can still create a shortage. Look at the net burn figure and the forthcoming obligations even when the headline result does not show a countdown.

Use the runway result to set earlier decision dates. If implementing a change requires several months, waiting until the cash is nearly exhausted removes useful options. Identify the cause of the burn before choosing a response: it could be low contribution, delayed collection, planned investment or a temporary trading interruption. Each requires a different action. Track whether the action changes actual receipts or payments, rather than treating a revised spreadsheet assumption as progress.

Keep the result in perspective

This is a transparent planning calculation or self assessment, not a sector benchmark, professional valuation or a prediction of an outcome.

Receipts and payments are cash movements, not accounting revenue and expense. The result assumes they stay constant and excludes an unentered one off obligation.

The calculator holds receipts and payments constant. It does not simulate daily balances, seasonal demand, an unentered debt repayment or a change in supplier terms. It also does not reserve a minimum cash cushion unless you remove that cushion from the available cash input deliberately and record the assumption. The result is therefore an initial planning horizon, not a complete cash management system.

A fraction of a month is a mathematical result, not a precise calendar date. The business may run short earlier if payments cluster at the beginning of the month. Conversely, a significant receipt may arrive before the average pattern suggests. Do not use runway alone to decide whether to take on debt, dismiss staff or accept a large order. Combine it with contribution analysis and a dated forecast.

Read the full limitations or explore how Ayodeji approaches this work.