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How to calculate cash runway in months in Excel and Google Sheets
Topic:SaaS metricsExcel & Google Sheets
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Step by step
- 1In cell A1 enter 'Cash Balance ($)' and in B1 enter the current bank balance (e.g. 1200000).
- 2In cell A2 enter 'Avg Monthly Net Burn ($)' and in B2 enter your 3-month average net burn (e.g. 80000).
- 3In cell A3 enter 'Runway (months)' and in B3 calculate =B1/B2.
- 4Optionally, compute the runway end date in B4 with =EDATE(TODAY(),FLOOR(B3,1)) to see the month cash runs out.
- 5Build a sensitivity table varying burn rate by ±10% and ±20% to understand how quickly runway changes with cost changes.
Tips
- Use net burn (not gross burn) for runway — you want to know how long cash lasts after revenue offsets expenses.
- Model three scenarios: base, optimistic (20% lower burn), and pessimistic (20% higher burn). Share all three with your board.
- Start fundraising when you have 9–12 months of runway remaining. Waiting until 3–4 months creates a distressed negotiating position.
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Frequently asked
Should I use the most recent month's burn or a 3-month average?
A 3-month rolling average smooths one-off spikes. If you recently made a step-change in headcount, weight recent months more heavily or use the current run rate going forward.
How does runway change if we hit a revenue milestone?
Model it as a reduction in net burn from that month forward. Build a month-by-month cash flow projection rather than relying on the simple division formula for milestone-sensitive decisions.
What is considered a safe runway for a Series A startup?
18–24 months of runway at time of close is the common target. Less than 12 months after closing a round suggests the raise was undersized or burn is too high.
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