Runway
Definition
The Runway KPI refers to the amount of time (usually in months) a business can continue to operate before cash runs out.
Characteristics
Is a calculated KPI that can be estimated by putting Cash on Hand and expected future Net Cash Burn in relation
Calculation
| COH |
| ÷ expected future NCB* |
| = Runway |
*Expected future NCB:
If your Net Cash Burn does not fluctuate a lot, the easiest way is to simply take your last months NCB. For more accuracy you can also look at the last months’ average NCB and take into account future events that might influence your future NCB (e.g. special cost or revenue increases).