How We Calculate Your Runway
Full transparency on our formulas, scoring model, and risk framework. No black boxes — every number you see has a clear reason behind it.
1. Runway Calculation
Your runway measures how many months your cash savings will last, given your income and expenses. We calculate it for three income scenarios.
Runway = ∞ (when net ≥ 0 — you're cash-flow positive)
If your after-tax income exceeds all expenses, you never run out of money — we show ∞ (infinity). Otherwise, we divide your cash buffer by the monthly burn to get months remaining.
2. Three Scenarios
We don't just give you one number. We model three versions of your financial future:
Downside (Bad Month)
Uses your worst-case monthly income. This is the scenario that matters most for safety — it's the foundation of your risk assessment.
Base (Average Month)
Uses your typical monthly income. This is your expected trajectory if things go normally.
Upside (Good Month)
Uses your best-case income. Shows your potential if things go well. This is a paid feature.
3. Safe-to-Go Score (0–100)
Your readiness score is a weighted composite of four dimensions, each measuring a different aspect of your financial preparedness:
| Dimension | Weight | What It Measures |
|---|---|---|
| 📊 Runway Coverage | 35% | How your downside runway compares to your safety target |
| 📈 Income Stability | 25% | How much your income drops in a bad month vs. normal |
| 🎯 Income Diversification | 20% | Service: client concentration. Product: revenue churn rate |
| 💰 Cash Buffer Strength | 20% | How many months of expenses your savings can cover |
Scoring Tiers
Each dimension is scored on a 4-tier scale based on thresholds specific to that dimension:
90
Excellent
65–70
Good
40
Moderate
10–15
Weak
Short-Board Veto Rule
If any single dimension scores below 25, your composite score is capped at 50 — no matter how well you score elsewhere. One critical weakness can undermine your entire safety net. This prevents false confidence from a high average hiding a dangerous gap.
4. Risk Status
Your traffic-light risk status is a quick assessment based on three conditions:
Stable
Base runway ≥ safety target, AND downside runway ≥ 3 months, AND income concentration is acceptable (largest client ≤ 50% for service, churn ≤ 6% for product).
Caution
Base runway ≥ 50% of safety target, OR downside runway ≥ 1 month. You have some buffer but meaningful risk factors.
Fragile
Neither of the above conditions is met. You would face serious financial risk going independent right now.
5. What This Tool Doesn't Cover
- Tax calculations are estimates — consult a tax professional for your jurisdiction
- We don't model irregular large expenses (medical, equipment, legal)
- Investment income, passive income, and side hustles aren't separately modeled
- Currency conversion uses display-only rates, not live market rates
- Past performance doesn't guarantee future results — use conservative estimates
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