Cash Burn Rate & Runway Calculator

Cash burn refers to the net cash outflow of a business over a period of time. For startups and growing companies, this is typically measured on a monthly basis. A company that spends more than it earns is said to be "burning cash."

Net burn rate is calculated as:

• Positive net burn: The company is spending more than it brings in, depleting its cash reserves.
• Negative net burn (net generation): The company is generating more cash than it spends, growing its reserves.
• Zero net burn (break-even): Inflows exactly match outflows on a cash basis.

Cash runway is the amount of time a company has before it runs out of cash at its current burn rate. It is typically expressed in months.

Runway formula:

Runway is only meaningful when a company is burning cash. If the company is generating net positive cash flow, runway is theoretically unlimited (assuming constant flows).

Why Runway Matters

• It indicates how much time you have to achieve profitability or secure additional funding.
• Investors often ask about runway to assess risk and timing of future financing needs.
• It helps founders plan hiring, marketing spend, and other strategic decisions.

1. Enter your current cash: This is your starting cash position—bank balances, cash equivalents, etc.
2. Enter monthly cash inflows: This includes revenue, funding received, and any other recurring cash coming in each month.
3. Enter monthly cash outflows: This includes payroll, rent, vendors, subscriptions, and all other recurring expenses.
4. Set projection horizon: Choose how many months to project (1-120). Longer projections are less reliable due to constant-flow assumptions.
5. Review results: Analyze your net burn rate, runway estimate, and cash balance projection over time.

Gross burn is your total monthly cash outflows, regardless of revenue. It represents the full cost of operating your business.

Net burn is gross burn minus your cash inflows (revenue, etc.). It represents the actual rate at which your cash reserves are depleting.

This calculator focuses on net burn since it determines how quickly your cash reserves change over time.

• Constant flows: Projections assume monthly inflows and outflows remain constant. Real businesses experience variability.
• No one-time events: This model doesn't account for one-time expenses, funding rounds, or large customer payments.
• No seasonality: Seasonal patterns in revenue or expenses are not captured.
• Educational only: This calculator is for educational and planning purposes only and does not provide financial, accounting, or investment advice.