How long can available cash support the current monthly burn?
Burn rate describes net cash consumed in a period; runway divides available cash by that rate. It is a static snapshot rather than a forecast of changing revenue or expenses.
Available cash divided by net burn
Net burn = Monthly expenses − Monthly revenueRunway = Cash ÷ Net burnA net burn of zero or less means the runway is unlimited.A fixed-burn cash horizon
The default case compares monthly cash outflow and inflow to obtain net burn, then measures how many months the entered cash balance can support it.
Illustrative inputs; currency amounts below use USD. Rates and prices are assumptions, not live quotes.
- Cash in the bank
- $250,000.00
- Monthly revenue
- $18,000.00
- Monthly expenses
- $46,000.00
Step-by-step calculation
- Monthly net burn = outflow 46,000 − inflow 18,000 = 28,000.
- Runway = available cash 250,000 ÷ monthly burn 28,000 = 8.928571 months.
- Closing the monthly gap requires 28,000 more inflow or the same reduction in outflow. If net burn becomes zero or negative, cash no longer depletes under this model.
Intermediate figures are rounded for reading. Results use the full calculation precision.
How inflow and cash balance extend time
A lower net burn extends runway and a higher cash balance does the same. If inflow meets or exceeds outflow, the standard cash-depletion runway is not meaningful in the usual way.
Cash burn is not the same as accounting loss
Accounting loss is not automatically cash burn. Non-cash expenses, financing flows and working-capital timing can make the two figures differ.
- Monthly inflow and outflow remain constant.
- The cash balance is fully available for operating use.
- Fundraising, one-off payments and working-capital changes are excluded.
Calculations related to burn rate and runway
The following tools examine neighbouring parts of the same calculation without changing the inputs or assumptions used above.
References
Sources and conventions
Quick answers
Frequently asked questions
What is the difference between gross burn and net burn?
Gross burn is monthly expenses, while net burn subtracts monthly revenue from those expenses.
Why is runway unlimited when revenue exceeds expenses?
The business is not consuming its cash balance under the entered monthly figures.
Does runway include future fundraising or changing costs?
No. It is a static estimate using the current inputs only.
Calculation method and limitations · Report an error
Educational content only. This guide is not financial advice.