Fundamental Glossary / Cash Flow Metrics
Cash Runway
How long the cash on hand lasts at the current burn rate.
Formula
Cash balance / monthly net burn.
What it means
Runway turns the burn rate into months. If the company has 120 of usable cash and burns 10 a month, the runway is 12 months, before any new funding.
It is a planning number for companies that are not self-funding. A profitable firm with positive free cash flow has no burn and no runway problem.
How to read it
A runway inside the time needed to reach break-even is a financing risk. The equity story then depends on a future investor as much as on the product.
What to watch
Usable cash is not always the cash line. Restricted balances, and debt that matures inside the runway, shorten it. A plan that assumes a constant burn while growth spending is about to rise is too kind.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.