Business owners are responsible for setting strategy, hiring the right people, and maintaining cash runway. A cash runway is the number of months the company can operate before it runs out of money. A start-up needs a good runway to reach its business goals efficiently, and one of the biggest reasons start-ups fail is because they run out of money. Therefore, calculating your cash runway ratio is essential if you want to keep your start-up growing. For the calculation of the cash runway ratio, the average burn rate is used. Taking that average burn rate, divide the amount of money you have at the moment by your burn rate. The cash runway ratio is how many months you have left before you run out of money. The company's cash runway gives insight into business' profitability and can tell you if you're overspending.
Cash Runway Ratio Excel Template
Evaluate and manage a cash runway ratio to ensure that your company has enough cash for further growth
Assess your business' profitability in detail
Determine a runway level you feel comfortable with
Evaluate an additional and longer runway for times of uncertainty
