Formula and example
How it is calculated
Net outflow = payments out − payments in; runway = cash balance / net outflow
Worked example
€50,000 cash with a monthly net outflow of €4,000 gives a runway of 12.5 months.
Things to check
- Cash flows are assumed constant. If net outflow is zero or negative, this model has no finite runway limit.
- Use one currency consistently. Examples use euros; the calculation works with any currency.