How to calculate cash runway in Excel

Step 1: Net burn for each month

Put one row per month with the cash that came in and the cash that went out. Take both from your bank statements, not from invoices you sent or bills you received: runway is about cash, and an unpaid invoice doesn't pay rent.

Net burn is cash out minus cash in, so =C2-B2 in D2, copied down. A positive number means you lost cash that month. A negative number means you added cash, which matters in Step 2.

Average the last three months instead of trusting one. October's burn was $4,900, August's was $5,800, and one month's number moves a lot with the timing of a few payments.

Step 2: Runway in months

Divide the cash you have now by the average burn. $42,000 / $5,466.67 is about 7.68 months. If you'd rather show one decimal, use ROUNDDOWN(...,1) for 7.6. Never round runway up: the cash runs out on its own schedule, not yours.

Which months you average changes the answer a lot. October alone gives 8.57 months. All six months give 9.13, because May to July were cheaper (an average burn of $3,733). When burn is rising, a long average flatters you. Three months is a common middle ground: recent enough to show the trend, long enough to smooth one odd month.

In Excel 365, =H2/AVERAGE(TAKE(D2:D7,-3)) always uses the last three rows, so it keeps working when you add November below. If the average burn is zero or negative you aren't burning cash at all, and the plain division gives a meaningless negative runway. =IF(AVERAGE(D5:D7)<=0,"Not burning cash",H2/AVERAGE(D5:D7)) handles that.

Step 3: The month the cash runs out

EDATE moves a date by whole months. Starting from the as-of date in H3 (October 31, 2026) and adding the whole months of runway (INT(7.68) = 7) gives May 31, 2027. That's the last month-end you can fully cover. The cash runs out partway through June 2027.

If the start date is the 31st and the target month is shorter, EDATE returns that month's last day. To always land on a month-end whatever the start date, use EOMONTH(H3,7) instead. Format the cell as a date if it shows a number like 46538.

Keep a cash floor, and know your gross burn

Running the bank account to zero isn't a plan. Most owners want a buffer for a late customer payment or a surprise bill. Put that floor in H5 ($10,000 here, your number goes there) and subtract it first: (42,000 - 10,000) / 5,466.67 is about 5.85 months. =TEXT(EOMONTH(H3,INT((H2-H5)/AVERAGE(D5:D7))),"mmm yyyy") names the last month-end you stay above it: Mar 2027.

Net burn assumes the money coming in keeps coming in. Gross burn asks what happens if it stops: divide cash by average cash out alone. Here that's $42,000 / $12,833.33, about 3.27 months. It's the worst case worth knowing if most of your income comes from one or two customers.

Where the cash goes, and testing a cut

Break the latest month's spending into categories (J2:K7) and divide each by the total. Payroll is $6,400 of $12,800, so 50% of what goes out. =SORTBY(J2:K7,K2:K7,-1) in Excel 365 lists the categories from biggest to smallest. Small line items rarely move runway; the top two or three do.

To test a change, put the monthly saving in an input cell (H4) and take it off the burn. Cutting $1,250 a month moves runway from 7.68 to about 9.96 months. With the floor as well, (H2-H5)/(AVERAGE(D5:D7)-H4) gives about 7.59.

Be honest about knock-on effects. If that $1,250 is marketing that brings customers in, cash in will drop too. Test a second scenario with lower cash in next to it, and treat the gap between them as the real range.