Cash Runway Calculator

Cash runway measures the number of months a business can continue operating at its current spending rate before running completely out of money. It is calculated by dividing total liquid cash reserves by your monthly net burn rate (the net amount of cash lost each month). Burn rate represents the pace at which cash is spent: gross burn is total monthly cash outflows, while net burn subtracts monthly incoming revenue. Understanding your runway provides a clear timeline for when you must achieve profitability, secure financing, or reduce expenses.

Gross burn measures the total cash outflows your business spends in a given month, including rent, payroll, software subscriptions, insurance, and inventory purchases. Net burn subtracts total monthly cash inflows (such as customer payments and sales revenue) from gross burn. For example, if your business spends $20,000 per month (gross burn) and collects $8,000 in monthly sales revenue, your net burn is $12,000 per month. Runway calculations always use net burn because incoming revenue partially offsets spending and extends your cash horizon.

Accounting profit (net income) is calculated on an accrual basis and includes non-cash items like depreciation, accounts receivable invoiced but not yet collected, and unpaid bills. Cash runway focuses exclusively on liquid cash movements. A business can be profitable on paper but still run out of cash if clients delay payment for 60 to 90 days. Conversely, a business may operate at an accounting loss while maintaining adequate cash runway through upfront deposits or cash buffers. Both metrics are important, but runway determines immediate survival.

What-if scenario modeling lets you test the exact impact of operational adjustments before making decisions. By inputting an estimated change in monthly sales (such as acquiring a new client or raising prices) or a reduction in monthly expenses (such as eliminating unused subscriptions or downsizing space), you can instantly see how many additional months of runway are created. Testing scenarios helps identify the most effective levers to extend cash life without making unnecessary cuts.

This calculator is built specifically for small business owners, sole proprietors, freelancers, boutique agencies, retail stores, cafes, and independent operators. It provides clear, straightforward visibility into cash timing without complex corporate jargon, venture capital assumptions, or multi-year financial modeling software requirements.

This tool provides directional cash flow estimates based on static monthly averages. It does not connect directly to bank accounts, generate tax filings, calculate complex depreciation schedules, or model variable seasonal revenue swings. For formal tax compliance, comprehensive budget forecasting, or commercial loan applications, consult a certified accountant or financial advisor.