How to Read the Cash Runway Card
A clear explanation of the Cash Runway card in AskBiz — how months of runway are calculated, what the status colours mean, and when "Cash +" appears.
Key Takeaways
- Cash Runway equals your cash balance divided by your daily burn rate, expressed in months.
- When net daily revenue exceeds daily costs, the card shows "Cash +" in green — meaning no runway limit under current conditions.
- Red means under 3 months, amber means 3–6 months, and green means over 6 months of runway.
What Cash Runway Means
Cash Runway is the number of months your business can continue operating before its cash reserves reach zero, assuming no change in revenue or costs. It is the most forward-looking metric on the CFO dashboard and the one most closely watched by investors, lenders, and founders during planning exercises. A runway of 12 months means you have a year to reach profitability or raise additional funds before cash becomes a crisis. A runway of two months is a near-term emergency. The Cash Runway card translates your raw cash balance and burn rate into a single human-readable time horizon.
The Calculation Explained
The formula is: Cash Runway (in months) equals Cash Balance divided by Daily Burn Rate, with the result divided by 30 to convert days to months. Daily Burn Rate is the total monthly costs (fixed plus variable) divided by 30. For example: if your cash balance is $30,000 and your total monthly costs are $5,000, your daily burn is approximately $167. Dividing $30,000 by $167 gives approximately 180 days, or 6 months of runway. When your connected store revenue data is incorporated, the daily net figure (revenue minus burn) is used instead of burn alone, giving a more accurate picture for revenue-generating businesses.
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Start for free →Understanding the Colour Thresholds
The Cash Runway card uses three colours to communicate urgency. Green indicates more than 6 months of runway — your cash position is comfortable and gives you strategic flexibility. Amber indicates between 3 and 6 months of runway — a zone that warrants active planning, including exploring revenue growth opportunities or cost reductions. Red indicates under 3 months of runway — this is a critical signal that immediate action is required, whether that means accelerating sales, cutting costs, or pursuing emergency funding. These thresholds are designed to give you enough lead time to act: 3 to 6 months is typically enough time to implement meaningful change if you start immediately.
What "Cash +" Means on the Runway Card
When your daily revenue exceeds your daily costs — meaning your business is operationally cash-flow positive — the Cash Runway card does not show a number. Instead it displays "Cash +" in green. This indicator means the runway concept does not apply in the traditional sense: a cash-positive business is not drawing down its reserves; it is adding to them. The absence of a finite runway number is good news. "Cash +" tells you that under current operating conditions your business is self-sustaining. The card will switch back to showing a month count if revenue data drops below your daily burn threshold, which is why keeping your revenue connections active and cost configuration accurate matters.