Free · Business valuation and cash flow

Cash-Balance Burn Rate & Constant-Rate Runway

Measure average cash depletion between two balances and estimate remaining runway when that depletion rate is positive.

Formula & worked example
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How to use this calculator

Enter the known values in the units shown. Results update as you type.
Where results are editable, change one to solve backwards. Lock a value to hold it fixed.
Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

If cash falls from 120,000 to 90,000 over 3 months, average burn is 10,000 per month. At that constant rate, the final balance covers 9 more months.

Burn rate = (initial cash − final cash) ÷ duration; signed balance-to-burn time = final cash ÷ burn rate

Worked example

Enter these known values and leave the other values blank.

Starting cash balance: 120000 USD
Ending cash balance: 90000 USD
Elapsed observation time: 3 mos

Average cash depletion rate: 10000 USD / mos
Balance ÷ burn time — runway only if burn is positive: 9 mos

Assumptions and limitations

Runway assumes the observed positive depletion rate continues without new financing or changes in receipts, expenses or investment.
Balance changes include financing and investing movements unless you adjust them first. This is not automatically a measure of operating cash burn.
When burn is zero, no finite depletion time can be calculated; when it is negative, the signed time is not a cash-exhaustion forecast.
Time conversions use a 365.25-day year and a month equal to one twelfth of that year, not specific calendar dates.
Use one currency for all balances and rates; currency selectors use fixed captured exchange rates, not live market rates.

Common questions

Does raising funding affect this calculation?

Yes. A financing inflow changes ending cash. Adjust for financing if your goal is to estimate operating cash burn.

What happens if cash is growing?

The depletion rate is negative. The signed ratio is retained, but it does not predict when the business will run out of cash.

References

The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.

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