Runway
The time a company can operate before running out of cash.
Runway is the number of months a business can continue operating at its current burn rate before exhausting cash reserves. It's a critical metric for startups and any business not yet profitable. When runway drops below 3–6 months, it's time to either raise capital, cut costs, or accelerate revenue generation.
Formula
Runway (months) = Cash Balance ÷ Monthly Net Burn RateExample
A startup with $180,000 in cash and a $30,000 monthly net burn rate has a 6-month runway, meaning it must reach profitability or secure funding within six months.
Why It Matters for Your Business
Knowing your runway lets you plan fundraising, hiring, and spending decisions with eyes open—running out of cash with no warning is the most preventable business failure.
Related Terms
More Cash-flow Terms
Burn Rate
The rate at which a company spends cash monthly.
Cash Flow
The movement of money in and out of a business.
Cash Flow Forecast
A projection of expected cash inflows and outflows.
Cash Flow Statement
A financial statement showing cash movements from operations, investing, and financing.
Free Cash Flow
Cash from operations minus capital expenditures.
Related Financial Guides & Resources
Automate Your Finances with AI
FiscalInsights uses AI to automate bookkeeping, track expenses, and forecast cash flow — so you can focus on your business.
Start Free Trial