Cash runway calculator

What this calculator does

Runway is the number of months your business can keep going before the cash runs out, assuming nothing changes. This calculator takes your current cash balance and your average monthly net burn — the amount more leaving the account than coming in each month — and returns your runway in months, plus an indication of when the balance would reach zero.

It's the single most clarifying number for any business spending faster than it earns, whether that's a young company investing ahead of revenue, a seasonal trade in its lean months, or an established firm working through a temporary dip. Knowing you have nine months of runway rather than three changes every decision you make this week.

How to use it

You need two honest figures:

1. Cash balance — what's actually in the bank today, plus any committed, undrawn facility you could rely on. Don't count money you hope to raise.
2. Monthly net burn — average your last three months. Take total cash out, subtract total cash in, and the difference is your burn. If more comes in than goes out, you have no burn — you're cash-generative, and runway is effectively unlimited at the current rate.

The calculator divides your balance by your burn to give the months remaining. Recalculate it at the start of every month — runway is a moving figure, and the trend matters more than any single reading.

How to read the result

The headline is months of runway. Under roughly three months is a red zone — too little time to raise finance calmly or turn the business around, so it demands action this week. Three to six months is amber: enough to plan, not enough to relax. Six months or more gives you room to make considered decisions rather than forced ones.

The zero-cash date turns the abstract into a deadline. Working back from it, set yourself a decision point well before — the moment you'll either have cut burn, lifted revenue, or arranged finance. The cardinal rule of runway is to act while you still have options: a business with three months left can negotiate; a business with three weeks left cannot.

The formula in plain English

It's deliberately simple:

Monthly net burn = cash out − cash in (per month)

Runway in months = cash balance ÷ monthly net burn

So £90,000 in the bank burning £15,000 a month gives six months of runway. The honesty lives in the burn figure: average a long enough period to smooth out one-off bills, and use a quieter month if your income is lumpy. A common refinement is to model two burn rates — your current pace and a leaner "survival" budget — so you know how much runway you could buy by cutting discretionary spend.

Worked example

A growing agency holds £60,000 in cash. Over the last three months it has paid out an average of £48,000 and brought in £40,000, so its net burn is £8,000 a month.

Runway = £60,000 ÷ £8,000 = 7.5 months. That points to a zero-cash date around seven to eight months out — comfortable enough to plan, but close enough to act on now. If the agency trimmed burn to £5,000 a month, runway would stretch to twelve months; win one more retained client and the burn could disappear entirely. Figures are illustrative.

Limitations and what to do next

Runway assumes a steady burn, but real cash flow lurches — a big tax bill, a late-paying customer or a quarter-end rent payment can shorten it sharply in a single week. Pair this with a month-by-month view of timing rather than relying on an average alone, and stress-test it against your largest upcoming outgoing.

If the underlying business is sound but runway is tight because of a timing gap — money owed but not yet collected, or a seasonal trough before a known peak — a revolving facility can extend it without committing to long-term debt. A Credicorp Flex facility is built for exactly that swing, with no personal guarantee on the director. Check the gap is genuinely short-term with the working capital calculator first. This is general information, not financial advice.