How do you calculate cash runway?
First, subtract monthly cash received from monthly cash paid out. If the result is positive, divide the cash available today by that monthly net cash burn. The result is a runway estimate in months.
Use cash movement consistently. An invoice you have sent is not cash available until it is paid. Likewise, include cash payments that might fall outside your normal operating expenses, such as a loan repayment.
This follows the standard cash-balance-to-net-burn approach described in J.P. Morgan’s explanation of cash runway.
What does six months of runway look like?
In this example, a business starts with $48,000. It collects $18,000 and pays out $26,000 each month. Net cash burn is $8,000 per month, so its estimated runway is $48,000 ÷ $8,000 = six months.
| Scenario | Cash in | Cash out | Runway |
|---|---|---|---|
| Starting example | $18,000 | $26,000 | 6 months |
| $2,000 less spent | $18,000 | $24,000 | 8 months |
| $4,000 less collected | $14,000 | $26,000 | 4 months |
These are arithmetic examples, not recommended targets. Change the inputs above to compare assumptions that are relevant to your own business.
What does this calculator leave out?
A single monthly average cannot capture everything about cash flow. A business can run short before a customer payment arrives even when its month-end balance looks healthy.
- Payment timing: weekly payroll and late customer payments can create gaps within a month.
- One-time costs: a tax bill, equipment purchase, or annual insurance payment can change the result.
- Seasonality and growth: revenue and expenses may not stay at their current levels.
- Restricted funds: cash reserved for another purpose may not be available to cover expenses.
Use this as a starting estimate. A dated cash flow forecast and a conversation with your accountant can provide more detail.
Common cash runway questions
What if my business brings in more than it spends?
If monthly cash received equals or exceeds monthly cash paid out, the calculator shows “No net cash burn.” It does not show an infinite runway or promise that cash cannot run out. Timing, unexpected costs, and changing receipts can still matter.
Is cash runway the same as profit?
No. Cash runway uses cash available and cash movement. Profit is an accounting measure, and revenue may be recorded before cash is collected. A profitable business can still have a cash timing problem.
Are my numbers saved?
No. This calculator runs in your browser without submitting or storing your input values. Refreshing the page resets it to the example.
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