Cash Runway: How to Calculate It and What to Watch
Runway is a planning metric. It should be reviewed alongside burn, revenue timing and financing assumptions.
Working record
| Check | What to do | Evidence to retain |
|---|---|---|
| Calculate current runway | Divide available cash by the modeled monthly net burn when burn is positive. State excluded commitments and the date of the cash balance. | The calculate current runway record, its source and the person responsible for resolving missing evidence. |
| Separate fixed and variable burn | List recurring commitments separately from costs that change with volume. Keep payment timing visible. | The separate fixed and variable burn record, its source and the person responsible for resolving missing evidence. |
| Model revenue scenarios | Write the cash inflows expected under base and lower-sales cases. Avoid counting booked revenue as collected cash. | The model revenue scenarios record, its source and the person responsible for resolving missing evidence. |
| Set an action threshold | Agree which projected cash balance or runway condition should trigger a spending review, collection action or funding discussion. | The set an action threshold record, its source and the person responsible for resolving missing evidence. |
Review the decision
Runway is a planning metric. It should be reviewed alongside burn, revenue timing and financing assumptions. Keep calculate current runway, separate fixed and variable burn, model revenue scenarios attached to the conclusion so the next owner can challenge the assumptions. Resolve missing evidence before treating this record as approval.
Continue the decision
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Calculation and source notes
Keep the displayed formula, input units and model scope with the result. Corrections or questions can be sent through the request section on this page.