Quick brief
What to know before you calculate
A short read on the assumptions, trade-offs and definitions that shape the answer.
- Cash runway shows how long current cash lasts at the present burn rate.
- Break-even shows the sales volume needed to cover fixed costs.
- A business can look profitable in theory and still run out of cash because of timing.
Runway starts with cash movement
Cash runway is based on cash balance and net monthly burn. If expenses are higher than revenue, the gap is the burn rate. Dividing cash by burn gives an estimate of months remaining. It is simple, but it forces a useful question: how long can the current plan continue without new funding or a major change?
Break-even starts with contribution
Break-even asks how many units, customers or orders are needed to cover fixed costs. The key input is contribution per sale, which is selling price minus variable cost. If the contribution is too low, the business needs a very high volume to break even. That can point to a pricing, cost or product mix issue.
Profit and cash are not the same
Invoices, stock, tax, supplier terms and payroll timing can create a gap between profit and cash. A business may be winning customers but still need cash before payments arrive. Runway planning should include timing, not just average monthly revenue and expenses.
Review when assumptions change
Runway and break-even should be updated when prices, margins, staffing, rent, ad spend or conversion rates change. Small changes in margin can make a large difference to break-even volume. A monthly review is often enough for stable businesses, while early-stage or cash-tight businesses may need to check more often.
Related calculators
Try the numbers yourself
Open the calculators that match this topic and test the result with your own inputs.