The #1 metric every CEO needs to know.

You’ve likely heard the phrase:

“Revenue lies.”

It’s uncomfortable — and often true.

Revenue can look strong on paper while cash quietly tightens behind the scenes. Pipelines feel full. Growth is projected. Deals are “close.”

And yet businesses still find themselves surprised.

As we look toward 2025, the single most important metric every CEO should know is not revenue, growth rate, or even profitability.

It’s cash runway.

What Cash Runway Really Tells You

Cash runway is how long your business can operate if nothing improves.

Not if the next deal closes.
Not if Q1 is stronger.
Not if fundraising comes through.

If nothing changes.

Runway tells you how much time you truly have to make decisions — and whether those decisions can be made calmly or under pressure.

Why Revenue Isn’t the Right Lens

Revenue answers the question:

“How are we doing?”

Cash runway answers a more important one:

“How long do we have if conditions don’t improve?”

In environments with longer sales cycles, cautious buyers, and tighter capital, optimism is not a strategy. Cash is.

Many leaders are surprised to learn that:

• fast-growing companies can still run out of cash

• profitable businesses can have limited runway

• strong pipelines don’t fund today’s payroll

Cash runway cuts through assumptions and shows reality.

How to Calculate Cash Runway

You only need three inputs:

1. Cash on hand
   Cash currently available across bank accounts and reserves

2. Average monthly cash inflows
   Revenue actually collected, not booked

3. Average monthly cash outflows
   Payroll, rent, vendors, debt, taxes — all cash leaving the business

Step 1: Monthly Net Cash Burn

Monthly Net Cash Burn = Monthly Cash Outflows − Monthly Cash Inflows

Step 2: Cash Runway

Cash Runway (months) = Cash on Hand ÷ Monthly Net Cash Burn

What a “Healthy” Runway Looks Like

Every business is different, but as a general guide:

• Less than 3 months → Immediate action required

• 3–6 months → High caution, frequent cash review

• 6–9 months → Stable but disciplined

• 9–12+ months → Strategic flexibility

Runway isn’t about fear. It’s about optionality.

The longer your runway, the more control you have over timing, hiring, pricing, and growth decisions.

The December Question Every CEO Should Ask

Before heading into a new year, ask yourself:

If revenue stayed flat through March, what decisions would we make today?

If that answer isn’t clear, confident, and data-backed, you don’t truly know your runway.

Leaders who understand their runway:

• act earlier, not later

• avoid reactive decisions

• negotiate from a position of strength

• allocate capital intentionally

Everyone else is reacting.

Why CFOs Start Here

Cash runway is not a once-a-year exercise.

It should be:

• reviewed monthly

• forecasted 3–6 months forward

• tied directly to hiring, pricing, and capital strategy

This is often the first metric we align on in ongoing CFO work — because it quietly informs every other decision.

Revenue tells a story.
Cash runway tells the truth.

If you only track one metric consistently in 2025, make it this one.

Clarity beats optimism — every time.

Want a complimentary discovery call to see what your numbers say, book one today with Birdie Financial.