The Cash Runway is also referred to as a Business Burn Rate.

The Cash Runway is a critical Key Performance Indicator (KPI) for new or start-up businesses. 

It is the rate at which a business is losing money and is usually expressed per month, i.e., a business burn rate is $45,000 per month.

It is a measure of how fast a business will burn through its share capital.  It is an indication of how long a company has before it should close down; make a profit or find additional funding.  

Your Cash Runway is largely determined by:

- Cash at bank;

- Access to overdraft and borrowings; and

- Accounts Receivable.

It should be noted that the Accounts Receivable is not the same as cash, but is a step away from becoming cash, i.e., when your clients / customers pay you.

If you would like to discuss further please contact us:
McNamara & Company - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandcompany.com.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.com

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