Definition · burn
Cash runway
Cash runway is the number of months a company can keep operating before it runs out of cash, usually calculated as cash balance divided by net burn. For cash runway, the useful boundary is the cash source, timing horizon, owner, liquidity exposure, and decision before options narrow.
Also known as runway, startup runway, financial runway, months of runway
Why it matters
Understanding cash runway matters because cash decisions are time-sensitive. Teams need to know when money moves, which balance changes, who owns the next action, and what can still be changed before liquidity tightens. Pluvo computes runway from live cash and net burn and explains a shortening runway by the drivers moving burn, so the number reflects what the business is doing this month.
In practice
Liquidity example
Finance teams use cash runway when they need to understand cash timing before a decision is made. A team might compare expected receipts, payroll, vendor payments, and debt obligations to decide what action is needed this week.
Pluvo example
Pluvo computes runway from live cash and net burn and explains a shortening runway by the drivers moving burn, so the number reflects what the business is doing this month.
In practice, teams should define cash runway with a clear source, owner, time period, and decision before they use it in reporting, planning, or operating reviews.
Understanding cash runway matters because cash decisions are time-sensitive. Teams need to know when money moves, which balance changes, who owns the next action, and what can still be changed before liquidity tightens. Pluvo computes runway from live cash and net burn and explains a shortening runway by the drivers moving burn, so the number reflects what the business is doing this month.
A strong workflow for cash runway separates the definition from the action: first agree what the term means, then decide how it is measured, when it changes, and who is accountable for the next step.
Pluvo computes runway from live cash and net burn and explains a shortening runway by the drivers moving burn, so the number reflects what the business is doing this month.
FAQ
What is cash runway?
Cash runway is the number of months a company can keep operating before it runs out of cash, usually calculated as cash balance divided by net burn. For cash runway, the useful boundary is the cash source, timing horizon, owner, liquidity exposure, and decision before options narrow.
How do you calculate runway?
To calculate cash runway, define the source data, time period, comparison basis, and owner before applying the formula. The useful answer is not only the math; it is whether the inputs and timing match the decision the metric supports.
How much runway should a startup keep?
Use cash runway when the decision depends on what cash runway is, the cash-balance-over-net-burn formula, and the months-of-runway rule of thumb. Before relying on it, confirm the source system, accounting treatment, time period, and owner so the term is applied consistently.