Runway measures how long a company can continue to operate without running out of cash at current levels of burn. Runway is always measured in months.
Runway=current cash balance÷burn
Note that since runway is always measured in months, for quarterly and annual aggregations, runway needs to be multiplied by 3 or 12, respectively.
Companies always need to keep a close eye on their runway because it dictates how long they can continue to operate without outside financing. It's important to always calculate runway using historical burn figures: assuming burn will decrease in the future, especially because of projected revenue growth, is a risky proposition that can leave companies in a tight space. It's best to be conservative with cash and try to always have at least 12 months of runway, so there is ample time to run a fundraising process or get to profitability before running out of cash.
Settings: Segments, Date Range, Date Aggregation, Trailing Period
