How To Calculate Runway in Sage CRE | Arithmix

Calculating runway in Sage CRE is a crucial task for any business owner or financial manager. It helps you determine how long your company can sustain its current operations before running out of cash. In this article, we will explain what runway is, when it is valuable to calculate it, and how to calculate it in Sage CRE.

What Is Runway?

Runway is the amount of time a company can continue to operate with its current cash balance. It is calculated by dividing the current cash balance by the average monthly cash burn rate. The cash burn rate is the amount of cash a company spends each month to cover its expenses, such as salaries, rent, and utilities.

For example, if a company has $100,000 in cash and its average monthly cash burn rate is $10,000, its runway is 10 months. This means that the company can continue to operate for 10 months before running out of cash.

When Is It Valuable To Calculate Runway?

Calculating runway is valuable for any business, but it is especially important for startups and businesses that are experiencing financial difficulties. Startups often have limited funding and need to know how long they can continue to operate before they need to raise more capital. Businesses that are experiencing financial difficulties need to know how much time they have to turn things around before they run out of cash.

Calculating runway is also useful for businesses that are planning to make significant investments or changes to their operations. For example, if a business is planning to launch a new product or expand into a new market, it needs to know how much cash it has available to fund these initiatives.

How to Calculate Runway in Sage CRE

To calculate runway in Sage CRE, you need to follow these steps:

1. Calculate your average monthly cash burn rate. This can be done by adding up all of your monthly expenses and dividing by the number of months.
2. Determine your current cash balance. This can be found in your Sage CRE account.
3. Divide your current cash balance by your average monthly cash burn rate. This will give you your runway in months.

It is important to note that your cash burn rate may fluctuate from month to month, so it is a good idea to recalculate your runway regularly to ensure that you have an accurate picture of your company's financial health.

In conclusion, calculating runway is an essential task for any business owner or financial manager. It helps you determine how long your company can sustain its current operations before running out of cash. By following the steps outlined in this article, you can easily calculate your runway in Sage CRE and make informed decisions about your company's future.

How Do You Calculate Runway in Sage CRE

Sage CRE 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 Sage CRE 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 Sage CRE, 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 Sage CRE 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 Sage CRE 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.