The operating question behind the page
The cash runway file adds an important point: the useful question is narrower than the title may suggest. Estimate how many months an available cash balance can support a stable monthly net burn and retained minimum-cash floor. Keep the calculation attached to the forecast window it describes.
In the cash runway review, assign an owner to the assumption set and note when it was prepared. The next reviewer can then distinguish a revision from a correction.
Inputs and their evidence
Available unrestricted cash. The bank and forecast records supporting cash runway should confirm it. Cash usable for operations. Trace Available unrestricted cash independently from Minimum cash retained before another reviewer receives the cash runway file.
Minimum cash retained. For cash runway, Balance not intended for routine burn. Do not replace Minimum cash retained with a target while treating Average monthly cash outflow as observed history.
Average monthly cash outflow. Before the cash runway calculation, verify this instruction: Recurring cash payments per month. Keep Average monthly cash outflow and Average monthly cash inflow on the same cash runway basis during an alternative review.
Average monthly cash inflow. For the selected forecast window in cash runway, Recurring cash collections per month. Write exclusions for Average monthly cash inflow beside the saved value for Available unrestricted cash.
Recreate the calculation
A second reader of cash runway should note that this model uses no lookup table: Runway divides cash above the retained floor by monthly cash outflow minus recurring cash inflow. Every changing amount is visible among the fields.
A second scenario worth keeping
A reversal caused by Average monthly cash inflow means the conclusion is conditional on that input and should be labeled accordingly.
With cash runway defined, compare a documented alternative for Average monthly cash inflow with the baseline; do not move unrelated fields merely to create a range.
What the output does and does not show
A second reader of cash runway should note that a zero or negative answer may be meaningful rather than erroneous. Check the business interpretation before replacing it with a more comfortable assumption.
If Available unrestricted cash comes from a firm record but Average monthly cash inflow is forecast, label the second value as the uncertainty driving the case.
Interpret cash runway only after Available unrestricted cash and Average monthly cash inflow have been reconciled. Their evidence may use different cutoff, allocation, or recognition rules.
Once cash runway is reconciled, document what the business will change, who owns the work, and when the effect will be measured.
While examining cash runway, preserve the current calculation while the Business Burn Rate Calculator examines business burn rate from its own inputs.
The cash runway file adds an important point: a mathematically correct answer can still be unsuitable. Growth, seasonality, financing events, payment timing, and one-time obligations can shorten or lengthen runway.
In the cash runway review, attach the calculation to the proposal, ledger extract, or workpaper from which its figures came.
From a cash runway standpoint, a change in working capital warrants its own worksheet. Open the Working Capital Calculator instead of hiding it in an unrelated field.
Follow one example through
Entries used in this walkthrough: Available unrestricted cash = $480,000; Minimum cash retained = $80,000; Average monthly cash outflow = $145,000; Average monthly cash inflow = $92,000.
The operating context for cash runway is clear: enter the figures, calculate, and retain each row. Change Average monthly cash inflow afterward; only effects connected to that field should move.
Checks for a second reader
What evidence supports the inputs?
The operating context for cash runway is clear: keep invoices, ledger extracts, forecasts, quotes, or workpapers relevant to each field.
How is sensitivity different from forecasting?
While examining cash runway, sensitivity changes a chosen input; forecasting also assesses how likely that input is.
When is professional advice relevant?
The cash runway file adds an important point: seek it when law, tax, accounting policy, lending terms, or material risk determines the action.
When is another version needed?
Create one when Average monthly cash inflow changes or the operating boundary moves.
What should a reviewer recalculate?
From a cash runway standpoint, rebuild the formula and its intermediate rows from the retained inputs.