Profit recognition and payment dates differ. Use cash receipts and payments here, not invoice revenue alone.
Try this with your own numbersFormula and worked example
Runway = available cash / (outflow − inflow)
| Input | Example |
|---|---|
| Available unrestricted cash | 50,000 |
| Monthly cash outflow | 20,000 |
| Monthly cash inflow | 15,000 |
| Calculated result | 10 months |
Choose reliable inputs
Account for turnaround, maintenance and available inventory before accepting another booking. For this equipment rental calculation, use rental contracts, asset records and maintenance logs and a consistent definition of one rental booking.
- Maintenance: include the portion belonging to this rental booking or reporting period, and record where the value came from.
- Depreciation: include the portion belonging to this rental booking or reporting period, and record where the value came from.
- Turnaround time: include the portion belonging to this rental booking or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Can a profitable business still run out of cash?
Profit recognition and payment dates differ. Use cash receipts and payments here, not invoice revenue alone.
If inflow covers outflow, there is no positive burn to divide by; excluded reserves must not be entered.
What if this input changes?
If available unrestricted cash rises by 10%, this example changes by 1 months. This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.