Out of Cash Date

What is Out of Cash Date?

Out of Cash Date gives you a rough estimate of when you will be out of cash. This metric is most often expressed as the number of months before Cash Out. This is a useful metric for CEOs and CFOs who are managing companies that are not profitable yet.
Alternate names: Cash Runway, Zero Cash Date

Benchmark

For venture backed, growth oriented companies, Out of Cash Date is often between 9 and 24 months.

How to calculate Out of Cash Date

ƒ (Cash) / (Net Burn)

Favourable trend

Between a range

Complexity level:
Beginner

Date created: Feb 14, 2019

Latest update: Apr 17, 2019

Contributor:  Pablo Srugo

Tell me more about this metric

Out of Cash Date is a simple predictive metric that should be top of mind for any CEO or CFO in charge of a company that is not cash flow positive. A business needs to fundraise, exit, or become profitable before the Out of Cash Date. The Out of Cash Date is a rough estimate, as it assumes Net Burn will not change in the future, but it’s still a useful gauge to monitor.

Especially if you are a venture backed company, if your Cash Out Date is too far in the future, you may not be using your capital aggressively enough to grow the business. However, anytime your Out of Cash Date dips below 12 months, you should should either be in fundraising mode, or be looking at ways to conserve cash.

What do others say?

Here is a short article from Geckoboard about Cash Runway.

Metrics related to Out of Cash Date

Net Burn
Earnings Before Interest, Taxes, Depreciation, and Amortization
Net Profit