Cash Runway Calculator

Cash runway is the amount of time an organization can keep operating before its cash balance reaches zero, assuming a given pattern of revenue and expenses. For startups, nonprofits, agencies, and project teams, runway turns a bank balance into a time-based constraint. It answers a practical question: how much decision time remains?

The simplest version divides cash on hand by monthly net burn. If a company has $600,000 and loses $100,000 per month, the rough runway is six months. Real runway is rarely that neat because revenue, hiring, invoices, seasonality, fundraising, and one-time costs change the slope. Still, the basic calculation is a useful first signal.

Gross burn is the total cash leaving the business each month. Net burn subtracts cash coming in, usually revenue or collections. A company spending $200,000 per month and collecting $80,000 has $200,000 of gross burn and $120,000 of net burn. Both numbers matter.

Gross burn shows the size of the cost base that must be supported. Net burn shows the speed at which cash is actually shrinking. A business with high gross burn and high revenue may have the same net burn as a much smaller business, but its risk profile is different because collections, churn, and margin changes can move the runway quickly.

Runway depends on cash timing, not just accounting profit. Annual contracts may be booked as revenue before cash arrives. Payroll, rent, taxes, and vendor bills may hit before customers pay. A growing business can be profitable on paper while cash gets tight because working capital absorbs money.

That is why runway planning should include collection delays, deferred revenue, payment terms, loan covenants, and committed spend. A forecast that uses average monthly numbers can miss a dangerous trough if several obligations land in the same month. The calendar can be as important as the total.

Extending runway usually means increasing cash, reducing burn, improving collections, or changing the plan. Raising capital adds cash but may take longer than expected. Cutting costs can preserve options but may slow growth or damage execution if done indiscriminately. Improving revenue quality and payment timing can be less dramatic but highly effective.

Good runway management creates decision points before crisis points. Leaders should know what actions they will take at 12 months, 9 months, 6 months, and 3 months of runway. The goal is not panic; it is preserving the ability to choose.