How Cash Runway Is Calculated Step by Step
A clear walkthrough of the AskBiz cash runway formula — from cash balance and daily burn to months of runway — with a worked example.
Key Takeaways
- Cash Runway = Cash Balance divided by Daily Burn, then divided by 30 to convert days to months.
- Daily Burn = (Monthly Fixed Costs + Monthly Variable Costs) divided by 30.
- Both inputs — balance and burn — can be adjusted in AskBiz to model different runway scenarios.
The Two Inputs You Need
To calculate cash runway in AskBiz, the system needs two inputs: your current cash balance and your daily burn rate. The cash balance is the figure you entered or synced in the Cash Balance configuration of the Cost Config Drawer. The daily burn rate is derived automatically from your cost settings — it is not entered directly. If either of these inputs is missing or zero, the runway calculation cannot produce a meaningful result.
Step 1 — Calculating Daily Burn
Before runway can be calculated, AskBiz calculates your daily burn. The formula is: Monthly Fixed Costs plus Monthly Variable Costs, divided by 30. Monthly Fixed Costs come from the categories you configured in the Cost Config Drawer — Rent/Lease, Payroll, Software/SaaS, Insurance, and similar recurring costs. Monthly Variable Costs come from your variable cost configuration — costs that fluctuate with activity like Supplies or Travel. For example, if your fixed costs total $9,000 per month and variable costs total $3,000 per month, your daily burn is ($9,000 + $3,000) divided by 30, which equals $400 per day.
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Start for free →Step 2 — Dividing Balance by Daily Burn
With the daily burn rate known, the next step is: Cash Balance divided by Daily Burn equals Days of Runway. For example, if your cash balance is $40,000 and daily burn is $400, then $40,000 divided by $400 equals 100 days of runway. This figure — days of runway — appears in the top section of the Cash Runway drill-down panel along with the formula displayed so you can verify the inputs.
Step 3 — Converting Days to Months
Days of runway divided by 30 gives months of runway. Continuing the example: 100 days divided by 30 equals 3.33 months of runway. This is the figure displayed on the Cash Runway card on the /intelligence page. AskBiz rounds to one decimal place for display. The runway drill-down panel shows both the days figure and the months figure so you can confirm the conversion. The Cash Runway card badge colour is then determined by the months figure — up to 1 month is Critical (red), 1 to 3 months is Warning (orange), 3 to 6 months is Healthy (yellow), and over 6 months is Strong (green).
Verifying the Calculation in the Panel
Step 1: Navigate to the /intelligence page and click the Cash Runway card. Step 2: The panel opens with the formula displayed. Confirm the Cash Balance figure matches what you entered in your settings. Step 3: Confirm the Daily Burn figure matches what appears on the Daily Net Gain/Burn card. Step 4: Verify that Cash Balance divided by Daily Burn equals the Days figure shown. Step 5: Verify that Days divided by 30 equals the Months figure shown on the card. If any figure seems incorrect, open the Cost Config Drawer to check your cost entries and cash balance input.