What cash runway measures
Net burn is monthly cash leaving the business after cash coming in. Runway is how many months the current cash balance lasts at that net burn. The model holds inflow and outflow fixed.
Monthly net burn = monthly outflow − monthly inflow
Monthly net cash flow = monthly inflow − monthly outflow
Cash runway = cash on hand ÷ monthly net burn
Annualized net burn = monthly net burn × 12
Monthly net cash flow = monthly inflow − monthly outflow
Cash runway = cash on hand ÷ monthly net burn
Annualized net burn = monthly net burn × 12
Example
$120,000 cash, $30,000 inflow, and $50,000 outflow is $20,000 of net burn and 6 months of runway. Annualized net burn is $240,000.
When runway is not finite
If inflow is at least as large as outflow, net burn is zero or negative and the page reports no finite runway. That is only true while these monthly figures hold. Update the inputs when payroll, revenue, or spending change.