How the calculation works
Gross burn is cash paid out during a month. Net cash burn is cash paid out minus cash actually received in the same month. When net burn is positive, simple runway equals available cash divided by that monthly net burn. With $180,000 available, $50,000 paid out, and $20,000 received, net burn is $30,000 and the simple runway is six months. The tool asks for a positive net burn; if receipts cover or exceed payments, this particular depletion formula does not produce a finite runway.
Cash is not the same as booked revenue
Use cash collected rather than an invoice that may be paid later. Include relevant payroll, suppliers, rent, debt service, taxes, and one-off payments in a fuller plan. Exclude restricted or unavailable cash from the opening balance. Keep every input in the same currency and period, and do not count a financing deposit as recurring operating receipts.
Use a month-by-month forecast for decisions
Cash flow is rarely flat. A large annual bill, delayed customer payment, seasonal sales, or hiring plan can shorten runway before the average monthly figure suggests. Government small-business guidance recommends cash-flow statements and forecasts to identify possible shortages. Use this calculator as a quick sensitivity check, then build a dated cash forecast and review it with a qualified finance professional before a material financing or staffing decision.
Stripe: gross burn, net burn, and runway · Australian Government: cash-flow statement and forecast