How to calculate your cash runway (and extend it)
Runway is the single most important number most SME owners can't answer instantly. Here's the math — and five levers to buy yourself more months.
What runway actually is
Cash runway is how many months your business can keep operating before it runs out of cash, assuming income and spending stay roughly the same. The formula is simple: runway (months) = current cash balance ÷ average monthly net burn. Net burn is your average monthly cash outflow minus inflow. If you hold ₹40 lakh and burn ₹5 lakh a month net, you have eight months.
Why the average trips people up
A single big receipt or a festival-season spike can flatter your average. Use a trailing three-month net burn rather than last month alone, and separate one-off items (a machine purchase, an annual insurance premium) from recurring burn. If you bill in lumpy cycles, model a 13-week cash flow instead of a single average so you can see the low points, not just the mean.
Five levers to extend it
1) Pull receivables in — chase invoices aged 45+ days first, they're where the cash is stuck. 2) Push payables out — negotiate net-45 with suppliers, or take early-payment discounts only when the return beats your cost of capital. 3) Trim dead inventory back into cash. 4) Cut or defer non-essential recurring spend. 5) Line up a credit facility before you need it — the best time to raise is when you don't have to.
How Cortex does this for you
MNB Cortex reads your numbers and shows your live runway, your out-of-cash date, and a 13-week cash-flow forecast — then flags the specific receivables to chase and drafts the reminders. You ask 'what's my runway?' and get a real answer, with the actions attached.
Run the free Business Health Check — no account needed — then start from ₹149 of credits.