Free calculator
Cash runway calculator
How many months will your business cash last at the current rate? See how long it lasts if income stops, and how big a cash reserve you should keep.
- If income stopped
- –
- Ideal reserve
- –
- Short of the target
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Averages hide busy and quiet seasons. Redo this every month with fresh numbers.
Results are estimates based on averages. Busy and quiet seasons can make monthly cash flow very different.
How it is calculated
Cash runway, and why it matters.
What cash runway means
Cash runway is how long your business cash can cover its outgoings. Even a business that is profitable on paper can run out of cash when customers pay late or stock piles up.
The formula
| What | Formula |
|---|---|
| Net per month | money in − money out |
| Runway | cash now ÷ (money out − money in) |
| Without income | cash now ÷ money out |
| Ideal reserve | money out × 3 or 6 months |
Example
IDR 30,000,000 in cash, IDR 20,000,000 coming in and IDR 26,000,000 going out each month. Cash falls by IDR 6,000,000 a month, so it lasts about 5 months. If income stopped, only about 1.1 months.
If the runway is short
Collect receivables sooner, cut slow-moving stock, delay spending that can wait, and set aside part of each month's income as a reserve.
FAQ
Questions about cash
How big should a small business cash reserve be?
A common guide is 3 to 6 months of outgoings. Seasonal businesses should aim closer to 6 months.
Do receivables count as cash?
No. Only money already in your cash box and bank accounts. Receivables become cash once they are paid.
What counts as money out?
Everything that leaves your cash: wages, rent, stock purchases, loan payments, tax, and the owner's personal withdrawals.
Know your cash position without the spreadsheet.
Tumra builds your cash flow from daily transactions, so you always know how long your cash will last. Try it free for 30 days.