Cash Runway Basics
Burn rate, net burn, and the exact month the bank account hits zero.
Runway months = cash ÷ net burn. Net burn = burn − revenue. A crisis toggle zeroes revenue to stress-test.
Runway is the number of months you can keep operating before the cash balance hits zero. The formula is one division — but the inputs and the stress test are what matter.
Part of: Saving & Spending Calculators
Quick answer
Runway months = cash ÷ net burn. Net burn = burn − revenue. A crisis toggle zeroes revenue to stress-test.
Key points
- ▸ Gross burn: total monthly outgoing — payroll, rent, hosting, everything.
- ▸ Net burn = gross burn − revenue. Negative net burn means you are profitable (no runway zero).
- ▸ Runway months = current cash ÷ net burn. If net burn is zero or negative, runway is indefinite.
- ▸ Burn multiple = net burn ÷ net new revenue. Under 2× is healthy; over 4× signals inefficient growth.
- ▸ The Crisis toggle models a revenue-collapse scenario by zeroing income and recomputing runway against gross burn alone.
Examples
- Healthy SaaSCash $1.2M, burn $120k/mo, revenue $40k/mo. Net burn $80k → 15 months runway.
- Crisis scenarioSame company, revenue cut to zero. Runway collapses to $1.2M ÷ $120k = 10 months. The 5-month gap is your revenue dependency.
- Approaching profitabilityRevenue $110k vs burn $120k → net burn $10k, runway 120 months. Close enough to call "indefinite" in planning terms.
When to use which tool
- Runway ZeroMain tool — enter cash, burn, and revenue; get the exact zero date.Calculate the exact month your cash runs out. Crisis toggle models a worst-case scenario with revenue zeroed.
- Shock SurvivalFor a single shock-event buffer (not ongoing burn).How many months of debt service survive an unexpected shock expense. Critical warning under 3 months.
- Savings Goal CalculatorFor the inverse — how long to hit a target balance at a given save rate.See when you'll hit your savings target and how extra contributions or growth change the timeline.
Related
- Runway ZeroCalculate the exact month your cash runs out. Crisis toggle models a worst-case scenario with revenue zeroed.
- Shock SurvivalHow many months of debt service survive an unexpected shock expense. Critical warning under 3 months.
- Savings Goal CalculatorSee when you'll hit your savings target and how extra contributions or growth change the timeline.
- Break-Even CalculatorCalculate how many units you must sell to cover fixed costs — break-even quantity and revenue.
Frequently asked questions
› Should I include a funding round I expect to close? Trust & accuracy
No — runway is what you have now. Model the round as a separate scenario. Counting expected capital as runway is how companies run out of cash.
› What if burn varies month-to-month?
Use the trailing 3-month average for a smoothed signal, or the worst recent month for a conservative read. Annualizing a single spike overstates runway risk.
› How should I use this guide with a Kefiw tool? How-to
Use the guide as the plan and the linked Kefiw tool as the check. Read the steps first, try the move manually, then use the tool to compare outputs, catch edge cases, and decide whether the result actually fits your task.
› What mistake do tool guides help avoid? Troubleshooting
Tool guides help avoid using a utility mechanically without understanding what you are trying to accomplish. Most word, writing, and text utilities are fast, but speed can hide context mistakes. Know whether you are solving a puzzle, cleaning copy, drafting a line, or checking a rule.
› Can a tool guide help me learn the skill? How-to
A tool guide can help you learn if you pause before accepting the output and ask why it worked. Compare your first guess with the tool result, look for the rule or pattern, and repeat that review. Passive copying solves one task; active review builds the skill.