Calculate it
How many months can you run before cash runs out?
Uses what the business earns after variable costs, not profit, because cash is what decides how long you have. Values are blank; use your own.
Simplified: assumes sales, margin and costs stay as they are and ignores tax, capital spend and swings in receivables and stock. Run it with a bad month as well as an average one.
What to do with the answer
| Months of cash | Position | First move |
|---|---|---|
| Under 2 | Urgent | Immediate cash actions, talk to lenders and key suppliers this week |
| 2 to 6 | Short | Cash plan in 30 days and lender conversation now |
| 6 and above | Workable, if the trend is flat | Run the 90-day plan, update the forecast weekly and fix the cause; do not wait |
Limits of the calculator
It assumes steady sales and costs. Real months vary, and receivables and stock swing cash by large amounts. Run it with a bad month as well as an average one, and build the full 13-week forecast for a precise picture.
CFOAvatar complements every turnaround
A human CFO sees your business at the review. Problems do not wait for the meeting. CFOAvatar is connected to your accounting data and checks your numbers every day, so the scoreboard in a turnaround is always current. Ask it what an owner in trouble would ask:
What owners say after the numbers started talking
Their structured MIS reports have given us clear visibility into our business performance, enabling faster and more informed decisions. The budgeting and cash flow monitoring system introduced by their team has helped us plan our funds more effectively and manage our operations with greater confidence.
They even worked with us to finetune our software (Gross Mart) so we could get micro-level details on various aspects of the business. On top of that, they streamlined our receivables follow-up process and provided valuable guidance on bank loans and valuations.
Quoted word for word from our clients. Read more client words →
Questions owners ask us
What is cash runway?
The number of months a business can continue before cash runs out, at its current rate of burn.
What counts as cash?
Bank balances and any limit your bank will actually let you use. Do not count overdue receivables you are unlikely to collect.
What if the result is negative burn?
Then the business covers fixed costs and repayments from gross profit. Test a bad month to see how thin the cushion is.
How often should I recalculate?
Monthly in normal times, weekly when runway is under six months.