Calculator

Cash runway calculator

Cash runway is cash on hand divided by average monthly net burn, where net burn is cash out minus cash in. Enter the three figures below and the calculator gives the runway in months, the month cash would run out at the current rate, and a stress-test runway that assumes no cash comes in at all.

$

Operating bank accounts plus savings you can draw on without penalty.

$

Customer receipts and other money arriving, averaged over the last 3 to 6 months.

$

Everything leaving the account over the same months: suppliers, payroll, rent, tax, loan repayments.

Figures update as you type. Nothing is sent anywhere; the arithmetic runs in your browser.

Enter the figures to see the result.

Illustrative figures only. Nella provides financial information and education, not accounting or tax advice.

How it is worked out

The arithmetic, stated plainly.

Net burn

Average monthly cash out minus average monthly cash in. If cash in is higher, the business is cash-positive at the current rate and runway is not the limiting number.

Runway

Cash on hand divided by net burn, in months. The month shown is today plus that many months.

Stress-test runway

Cash on hand divided by cash out alone, as if receipts stopped tomorrow. It is the floor, not a prediction.

What it does not cover

  • Runway assumes next month looks like the recent average. One-off receipts or payments in the months you averaged distort it.
  • Tax held in the account but owed (BAS, PAYG instalments and superannuation guarantee) is not really available cash. Taking it out of cash on hand gives a more conservative figure.
  • It is a snapshot, not a forecast. A 3- or 6-month cash-flow forecast with the known upcoming payments is the next step.

Related reading

See it on your own numbers

Nella works these figures out from your books, every month.

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FAQ

Questions people ask

What is the formula for cash runway?
Runway in months equals cash on hand divided by average monthly net burn. Net burn is cash out minus cash in, usually averaged over the last three to six months.
What is a stress-test runway?
Cash on hand divided by average monthly cash out only, as if no receipts arrived. It shows how long the business could keep paying its bills with no revenue at all.
Should I include an overdraft or loan facility?
A pure cash runway counts only cash. Adding undrawn facilities gives a liquidity runway, which is a different number and worth labelling separately.
How often should runway be recalculated?
Monthly, after the books are closed, is the usual rhythm. Businesses in a tight cash period often look at it weekly.
Does Nella calculate runway automatically?
Yes. Once Xero or QuickBooks is connected, Nella shows cash on hand, average net burn and runway from the live books, and builds a 3- and 6-month cash-flow forecast. It shows the numbers; what to do about them is a judgement for you and a qualified accountant.