calculate-runway

name	calculate-runway
category	money
description	Calculate cash runway from available liquidity, timed inflows and outflows, restrictions, scenarios, and minimum cash needs. Use when estimating how long an organization can meet obligations under stated assumptions.

calculate-runway

Use a dated cash schedule, not only cash divided by average burn.

When to use

• Use for liquidity planning, fundraising timing, cost decisions, or stress testing.
• Do not count restricted funds, uncertain financing, or uncollected revenue as available cash without explicit treatment.

Procedure

1. Choose start date, currency, entities, forecast horizon, and minimum operating cash.
2. Reconcile bank balances, undrawn facilities, restrictions, trapped cash, and known holds.
3. Schedule payroll, tax, debt, rent, vendors, refunds, capital spending, one-time items, and commitments by date.
4. Schedule cash receipts by probability and collection timing, not invoice date alone.
5. Model base, downside, severe, and action scenarios with implementation lag.
6. Calculate first date liquidity falls below required minimum, plus days or months from the start.
7. Test customer loss, collection delay, cost growth, foreign exchange, financing delay, and emergency actions.
8. Update actuals regularly and explain forecast error.

Done

• A runway sheet records reconciled liquidity, restrictions, timed cash flows, minimum cash, scenarios, and action assumptions
• Formula, bank, timing, and sensitivity checks verify the exhaustion dates and expose uncertain financing or receipts