Cash-Out Month (Net Burn)
The calendar month in which a company's available cash is projected to run out if its current net burn rate continues unchanged.
◆ Months
Formula
What it measures
A forward-looking calendar date, not a count. Take current cash plus collectible accounts receivable, divide by monthly net burn to get whole months of runway, floor to the last complete month of operation, and add that many months to the current month. The result is a specific month name — for example "December 2026" — on which cash is projected to hit zero if burn does not change.
Why it matters
Cash-out month turns an abstract runway figure into a concrete deadline. A team that reads "Runway: 8 months" may not feel urgency; the same team reading "Cash-out: February 2027" does. The named date anchors fundraising timelines, hiring freezes, and cost-cut decisions to the calendar, and it forces the board to confront the finite horizon of capital in terms everyone understands. It is the same information as runway, expressed in the units that actually drive action.
How to read it
Read the cash-out month as the hard deadline by which the company must reach breakeven, secure new capital, or materially cut burn. The further out it sits, the more strategic room you have; a date less than 12 months away while still burning cash should trigger urgent fundraising and cost conversations. Track how the date moves month over month — it slides earlier when burn rises or cash falls, later when burn drops or you raise. Crucially, it is a projection, not a promise: the formula assumes burn stays flat, which almost never holds once a company is actively cutting costs or has closed a round. Treat a stable or receding cash-out date as a healthy sign and an advancing one as a warning.
What good looks like
Good
Cash-out month 12+ months out, holding steady or moving later as net burn declines or revenue grows. Ample room to reach milestones or raise on your own timing.
Watch
Cash-out month 6–12 months out, or drifting earlier month over month. Workable, but demands disciplined spend control and a clear path to profitability or a funded round.
Bad
Cash-out month under 6 months away while still burning cash. High risk — the company must cut burn, accelerate revenue, or close funding within a single planning cycle.
Watch-outs
- Assuming burn stays flat. If the company is executing a cost-cut plan, ramping a new revenue line, or has just raised, net burn will shift and the cash-out month will move with it. Treat the date as a monthly-updated forecast, not a fixed deadline.
- Counting promised or undrawn capital as liquidity. The metric is based on liquid capital — cash plus collectible receivables — not committed funding. A company with $500K cash and a signed but undrawn $5M facility does not have ten months of runway; it has the $500K until the draw actually clears.
- Ignoring lumpy outflows. Annual insurance, debt principal, a large bonus pool, or a tax payment can pull the true cash-out date forward by a full month or more. The flat-burn formula cannot see these — review the 12-month cash plan alongside the metric.
- Failing to recalculate after major events. A fundraise, acquisition, or layoff reshapes burn overnight. Recompute the cash-out month immediately after any such event, not at the next month-end close, or the reported date will be stale on day one.
Worked example
Hypothetical
A startup closes June 2026 with $1.8M cash and $200K of receivables it expects to collect, for $2.0M of available capital. Net burn that month is $500K. Runway is $2.0M ÷ $500K = 4 months, so cash is projected to run out four months after June — in October 2026.