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.
Turning monthly cash movement into runway
Monthly expenses minus monthly revenue gives net burn. Cash divided by positive net burn estimates how many months the current cash balance can last.
If revenue equals or exceeds expenses, net burn is zero or negative and the model treats runway as unlimited. The estimate assumes cash, revenue and expenses remain constant.
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.
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.
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.
Educational content only. This guide is not financial advice.