Four policy bullet gaugesRed, amber, and green bands use the targets entered above
Business
Cash Runway Benchmark Calculator
Turn a single runway number into a transparent liquidity benchmark. The calculator protects an entered reserve, derives contribution and net burn, compares adjusted runway, reserve coverage, burn-to-revenue, and operating coverage with user-supplied targets, and identifies the weakest benchmark dimension.
Liquidity benchmark score-
Adjusted runway-
Reserve coverage-
Burn / revenue-
Operating coverage-
Monthly net burn-
Weakest benchmark-
Policy posture-
Composite policy attainment
Liquidity policy diagnostics
Measure four different weaknesses instead of hiding them inside one runway ratio
Actual markerPolicy target
| Dimension | Actual | Policy target | Attainment | Status | Decision use |
|---|
Benchmark setup
Turn treasury policy into four measurable tests
- Separate protected reserve from cash that may fund ordinary operations.
- Enter revenue, contribution margin, fixed cash cost, and debt service from the same period.
- Replace the default targets with board, lender, or operating-policy thresholds.
- Review the weakest gauge before relying on the composite score.
Why four gauges
A large cash balance can coexist with weak operating economics
Adjusted runway measures time, reserve coverage measures shock absorption, burn-to-revenue measures cash leakage, and operating coverage tests whether contribution pays recurring commitments. None is a substitute for the others.
Detailed calculation process
Derive operating burn before measuring liquidity strength
Contribution = Monthly revenue × Contribution marginNet burn = max(0, Fixed cash cost + Debt service − Contribution)Adjusted runway = (Cash − Protected reserve) ÷ Net burnReserve coverage = Protected reserve ÷ (Fixed cash cost + Debt service)Burn-to-revenue = Net burn ÷ Monthly revenueOperating coverage = Contribution ÷ (Fixed cash cost + Debt service)Runway and reserve coverage are measured in months; burn and coverage ratios are decimals displayed as percentages.
Reading the bullet gauges
The marker matters more than the color label
The target marker is 100% attainment. A result near the target deserves sensitivity testing because a small revenue or margin miss can move it back into the watch band. The weakest row names the specific policy dimension to investigate.
Benchmark sources
Use targets that belong to the decision
- Board-approved minimum cash policy
- Lender covenants and debt-service calendar
- Peer data with matching business models
- Historical downside burn during weak quarters
Comparison limit
A score is not a forecast
The model is a current-state diagnostic. Seasonality, collection timing, planned investment, and future financing require a time-phased cash model.
Cash runway benchmark FAQ
Policy and peer-comparison questions
What happens when net burn is zero?
Runway is shown as open-ended, while reserve and coverage tests remain active.
Can I compare companies with different margins?
Only carefully. The contribution calculation helps, but capital intensity and billing cadence can still make the comparison misleading.
Why protect reserve before calculating runway?
A dollar cannot be both unavailable for ordinary burn and counted as spendable runway cash.
Practical examples
Cash Runway Benchmark Calculator in real planning situations
- Compare runway with a 12-month board policy.
- Test whether a company has enough protected reserve for three months of fixed commitments.
- Separate weak operating coverage from an otherwise large cash balance.
Important note
Before relying on this result
Calculated from the entered values using the displayed accounting method. Reconcile material decisions with source records and applicable accounting policy.
Additional Cash Runway Benchmark Calculator questions
Are the default targets universal benchmarks?
No. Replace them with board policy, lender requirements, or a comparable peer set.
Why exclude protected reserve from runway cash?
A reserve cannot simultaneously be protected and spent on ordinary burn.
What if the business is cash-generative?
Runway becomes open-ended; the other benchmark dimensions still show resilience.
Can the score replace a cash forecast?
No. It diagnoses the current operating posture and should sit beside a time-phased forecast.