Cash runway (Runway)
Months the cash on the newest balance sheet lasts at the rate the business used cash over the newest filed twelve months.
A small company that runs out of cash raises money, and a raise is what dilutes the people who already own it.
How it is computed here
Cash and equivalents (plus short-term investments where tagged) / (operating cash flow after capital spending over twelve months / months in the window)
Combines more than one basis. See the note. The cash is from the newest filed balance sheet, usually a quarter; the burn is the newest filed twelve months of cash flow, the fiscal year rolled forward by the quarters filed since where those are on file. Filed under health. Higher is the stronger reading, other things equal.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- No figure when operating cash flow was zero or positive: the business is not consuming cash to run.
- Money raised is never counted in the burn, so a company that funded its losses with a share sale still shows the losses.
- The cash and the burn come from two dates: the newest balance sheet is usually a quarter newer than the newest full year of cash flow.
Not meaningful for banks, insurers: the product prints n/m with the reason rather than a number for them.
Questions
How is cash runway calculated?
Cash and equivalents (plus short-term investments where tagged) / (operating cash flow after capital spending over twelve months / months in the window). Combines more than one basis. See the note. The cash is from the newest filed balance sheet, usually a quarter; the burn is the newest filed twelve months of cash flow, the fiscal year rolled forward by the quarters filed since where those are on file.
What does cash runway tell a value investor?
A small company that runs out of cash raises money, and a raise is what dilutes the people who already own it.
When does cash runway mislead?
No figure when operating cash flow was zero or positive: the business is not consuming cash to run. Money raised is never counted in the burn, so a company that funded its losses with a share sale still shows the losses. The cash and the burn come from two dates: the newest balance sheet is usually a quarter newer than the newest full year of cash flow.