Cash Runway Calculator

What is cash runway?

Cash runway is the number of months a business can keep operating before it runs out of cash, assuming its current net burn continues. It is the most direct answer to the question every owner and board eventually asks: how long do we have?

Net burn is the monthly cash that leaves the business after accounting for cash coming in. A business that collects $310,000 and pays out $425,000 in a month has a net burn of $115,000. A profitable, cash-generating business has no burn and therefore no runway limit — the calculator shows "Infinite" in that case.

The formula

Cash runway (months) = cash on hand ÷ net monthly burn; net monthly burn = monthly cash out − monthly cash in

• Use cash, not profit. Depreciation, accruals, and deferred revenue change profit without changing the bank balance.
• Use a trailing average (for example, the last three months) for burn so one unusual month does not swing the answer.
• Cash on hand should exclude money you cannot spend: restricted cash, customer deposits you must return, or a minimum balance your lender requires.

Worked example

Illustrative example — a hypothetical software company averaging the last three months:

1. Cash on hand: $1,150,000.
2. Average monthly cash in: $310,000. Average monthly cash out: $425,000.
3. Net burn = $425,000 − $310,000 = $115,000 per month.
4. Runway = $1,150,000 ÷ $115,000 = 10.0 months.
5. If collections slip and net burn rises to $140,000, runway = $1,150,000 ÷ $140,000 ≈ 8.2 months.

A $25,000 change in monthly net burn removes nearly two months of runway. Runway is sensitive to the inflow side as much as to spending.

How to read your result

Treat runway as the time you have to act, not the time until you act. Raising capital, negotiating a credit line, or cutting costs all take months to complete, so the decision point comes well before the cash runs out.

Recalculate whenever burn changes materially — a new hire, a price change, a lost customer. Runway computed from last quarter's burn can be out of date by the time it is presented.

Runway is a straight-line estimate. Lumpy items (annual insurance, tax payments, a large customer that pays quarterly) can create a cash trough well before the average says you run out. For a week-by-week view, use the 13-week cash flow starter.

Common mistakes

• Using gross burn instead of net burn. Dividing $1,150,000 by $425,000 of total spending gives 2.7 months — a false alarm that ignores $310,000 of monthly inflows.
• Using profit or EBITDA as burn. Accrual profit includes non-cash items and timing differences. Runway is a cash measure.
• Counting cash that isn't available. Restricted balances, customer deposits, and lender minimums are not runway.
• Assuming burn is flat. Planned hires and growth spending raise future burn. Model the plan, not just the trailing average.

Frequently asked questions

Further reading

• Killing the annual budget: why rolling forecasts win — Runway computed from a rolling forecast stays current; one computed from the annual budget doesn't.
• Measuring ROI on finance technology (without fooling yourself) — Every tool you buy changes burn — how to judge whether it pays back.
• The 90-day plan for a new CFO inheriting a mess — The first number a new finance lead should know cold.
• Cash runway tracking when your burn rate won't sit still — How to keep the runway number honest month to month.
• VarianceDesk vs Jirav — Comparing budget-vs-actual and planning tools for QuickBooks.

More free tools

• Loan Covenant Health Check
• DSO & AR Aging Calculator
• Gross Margin Analyzer
• 13-Week Cash Flow Starter
• DSCR Calculator
• Covenant Headroom Checker

Worked examples on this page are illustrative and use hypothetical figures, not customer data. This page is general information, not lending, tax or investment advice.