Cash Runway Calculator
Reviewed by Gerald G., founder & reviewing editor of CalcAuthority. Formula-based tool: every result is computed from the stated formula and your inputs — no hidden adjustments.
Businesses do not close because the idea failed — most close because the checking account hit zero before the next good month arrived. Cash runway is the single number that measures the distance to that wall: at your current pace of money in and money out, how many months can you operate? This calculator computes it from three inputs you can pull from your bank statement in five minutes. It answers operator question three — can I afford this decision? — because every hire, truck, and lease is really a bet against the runway. Companion reading: Months of Cash: the one number to know.
How It Works
Cash on hand is money you can actually spend: business checking and savings — not receivables, not inventory, not the line of credit you hope stays open. Cash in and cash out are your real average monthly flows from the last 3–6 bank statements — deposits actually received and payments actually made, which is a different (and more honest) picture than an accrual P&L showing invoices sent.
If out exceeds in, the difference is your burn, and runway is cash ÷ burn. If in exceeds out, you are cash-flow positive — the calculator reports that instead, and the number to watch becomes how fast the cushion is growing. Seasonal businesses should run this twice: once with slow-season flows, once with annual averages. The slow-season answer is the one that matters, because that is when the wall approaches fastest.
Worked Examples
Example 1 — slow season, real cushion. Cash on hand $45,000. Cash in $28,000/month, cash out $33,000/month. Burn = $5,000/month. Runway = $45,000 ÷ $5,000 = 9 months. Enough room to make decisions calmly — but a new $1,500/month truck payment cuts it to 6.9 months. That is what "can I afford this?" actually computes to.
Example 2 — tighter than it feels. Cash $18,000. In $22,000, out $26,500. Burn $4,500. Runway = 4 months. The business feels busy — money moves every day — but four slow months end it. At this reading, cutting $1,500/month of spending buys two additional months; that is the cheapest runway you can purchase.
What This Result Means
Runway is time to solve problems. Nine months means a bad quarter is an event; three months means it is an emergency; six weeks means every decision is forced. The number moves two ways — more cash, or less burn — and burn is usually the faster lever. Note what runway is not: it is not a prediction that you will run out, only a measure of how long the current pattern can continue unchanged.
Reading the Result
- Under 3 months: danger zone — decisions start being made for you. Cut burn now, chase receivables, delay non-essential spending.
- 3–6 months: tight. Normal seasonality can push you into the danger zone; build cushion before adding fixed costs.
- 6–12 months: workable — most operating surprises are absorbable.
- 12+ months: strong. You can afford strategy: hiring ahead of demand, taking the bigger job, riding out a price war.
Bands are editorial heuristics widely used in small-business cash planning, mapped to how much time common disruptions consume — they are not a published standard. Seasonal trades should read the bands against slow-season burn.
When to Use This Calculator
Use this calculator:
- Monthly, same day each month — the trend matters more than any single reading.
- Before any new fixed commitment — hire, lease, truck, software: re-run with the new cash-out and watch what the runway becomes.
- Entering your slow season — with slow-season flows, not annual averages.
- Before growth spending — growth consumes cash before it returns cash; the runway says whether you can survive the gap. Pair with the Break-Even Revenue Calculator and CAC Payback Calculator.
Limitations
- Assumes flows stay at their recent average — one lost anchor customer or one big receivable landing changes the picture immediately.
- Cash accounting only: it will not warn you about a tax bill accruing or prepaid work you still owe labor against.
- Does not model credit lines; available credit is a backstop, not runway.
- Averages hide lumpiness — quarterly insurance and annual premiums should be spread into the monthly cash-out figure.
Frequently Asked Questions
Should receivables count as cash on hand?
No. Receivables are promises with dates and default risk; runway measures what you can spend today. The discipline of excluding them is the point — many businesses with healthy receivables have died waiting for them. If a large receivable is genuinely certain and near, run the calculator both ways and treat the difference as your best case, not your plan.
My income is seasonal. What flows do I enter?
Run it twice. First with your slow-season months' averages — that answer tells you whether you survive the season starting from today's cash. Then with 12-month averages for the structural picture. If the slow-season runway is shorter than the slow season itself, the difference is the cushion you must bank during the busy months, which turns a vague worry into a savings target.
What is the fastest way to extend runway?
In order of speed: collect what you are owed (invoice today, follow up on day one past due); cut discretionary burn (subscriptions, underused equipment, premature hires); delay large purchases; then raise prices — slower to land but permanent (model it with the Price Increase Impact Calculator). Borrowing extends runway too, but adds burn; it buys time at interest and works only if the time is used to fix the underlying flow.