Cash Runway
Short definition
Cash runway is how long available cash lasts at the current net cash-outflow rate. It is a treasury metric in growth and loss-making phases. In a cash-generative firm an “infinite runway” still misses the maturity wall.
Detailed explanation
The numerator is cash less restricted cash plus a truly drawable commitment. The denominator is average net outflow from the 13-week budget or a stress burn. Incoming collections shrink the denominator; restocking and principal inflate it.
Runway assumes a straight-line burn. Season, tax, bonus and bullet principal break that line. Report runway as a band under scenarios, not as one number.
Why it matters for the CFO
Funding rounds, refinancings and capex deferrals hang on runway. Refinancing must close before cash hits the minimum-cash policy; otherwise negotiating power is gone.
How it is calculated
Nakit pisti (ay) ≈ Kullanılabilir nakit / Aylık net nakit çıkışı
Variables in the formula
- Runway: Available cash / monthly net burn
- Available cash: Cash − restricted + drawable line (per policy)
- Net burn: Monthly net cash outflow
How to read it
A 12-month runway becomes 24 if burn halves, and shortens if sales fall. Booking an undrawable line in the numerator lengthens runway on paper only. There is no universal “safe” runway; the cash cycle and the maturity calendar set it.
Numerical example
Available cash 90 mn TL, monthly net outflow 15 mn TL → runway = 90 / 15 = 6 months.
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Definitions are educational. They are not investment, credit or tax advice.