What is Cash Runway?
Cash runway tells you how many months your business can continue to operate at its current burn rate before running out of cash. It's one of the most important metrics for any growing company.
How is it calculated?
FinanceMOT calculates your burn rate from your financial data and divides your current cash balance by that figure. The result is a clear months-of-runway number, colour-coded with a RAG status so you can see at a glance whether you're in a comfortable or concerning position.
Why it matters
Cash is the lifeblood of every business. Even profitable companies can fail if they run out of cash at the wrong time. Monitoring your runway gives you early warning to take action — whether that's cutting costs, chasing overdue invoices, or securing additional funding.
Best practices
- Aim for at least 6 months of runway at all times.
- Review runway alongside accounts receivable and payable days.
- Use multi-period tracking to spot trends in your burn rate.