How To Calculate Runway in Apptivo | Arithmix

Calculating runway is an important aspect of financial planning for any business. It is the amount of time a company can continue operating with its current cash reserves. Knowing your runway can help you make informed decisions about your business, such as when to seek additional funding or when to cut costs. In this article, we will discuss what runway is and when it is valuable to calculate it.

What Is Runway?

Runway is the amount of time a company can continue operating with its current cash reserves. It is calculated by dividing the current cash balance by the monthly burn rate, which is the amount of money a company spends each month to keep the business running. The result is the number of months the company can continue operating before it runs out of cash.

For example, if a company has $100,000 in cash reserves and a monthly burn rate of $10,000, its runway would be 10 months. This means the company can continue operating for 10 months before it runs out of cash.

It is important to note that runway is not the same as profitability. A company can be profitable but still have a short runway if it has high expenses or low cash reserves.

When Is It Valuable To Calculate Runway?

Calculating runway is valuable for businesses in various stages of growth. Startups, for example, often have a limited runway and need to raise additional funds to continue operating. Knowing their runway can help them determine when to seek funding and how much they need to raise.

Established businesses can also benefit from calculating their runway. It can help them make informed decisions about investments, hiring, and expansion. For example, if a company has a short runway, it may need to delay hiring or cut costs to extend its runway.

Calculating runway is also valuable for investors and lenders. It helps them assess the financial health of a company and determine whether it is a good investment or lending opportunity.

In conclusion, calculating runway is an important aspect of financial planning for any business. It helps businesses make informed decisions about their operations, investments, and funding needs. By understanding what runway is and when it is valuable to calculate it, businesses can better manage their finances and achieve long-term success.

How Do You Calculate Runway in Apptivo

Apptivo itself isn’t naturally geared towards letting you calculate complex metrics like Runway. As an alternative, teams typically use products like Arithmix to import data from Apptivo and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Apptivo, combine it with data from other systems, and create calculations like Runway.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Runway in Arithmix

Calculating metrics like Runway is simple in Arithmix. Once you've created your free account, you’ll be able to import your Apptivo data, and use it to create natural language formulas for metrics like Runway.

Arithmix is designed to give you the power to build any calculations you want on top of your Apptivo data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.