A narrower, more urgent liquidity question than this site’s working capital or current ratio calculators: how many days could operations run on cash alone if revenue stopped tomorrow?
How it works
Annual operating expenses are converted to a daily burn rate by dividing by 365, then cash and cash equivalents are divided by that daily figure.
What this does not include
Depreciation and other non-cash charges inflate “operating expenses” on a profit-and-loss statement without actually consuming cash — this calculator’s expense field is meant as an actual cash-expense figure, not a raw P&L line.
How to use this calculator
- Enter cash and cash equivalents on hand.
- Enter annual cash operating expenses.
A worked example
$500,000 cash, $3,650,000 annual operating expenses: daily burn = 3,650,000 ÷ 365 = $10,000, days cash on hand = 500,000 ÷ 10,000 = 50 days.
What the variables mean
| Variable | Meaning |
|---|---|
| Cash | Current cash and cash equivalents |
| Annual operating expenses | Total operating expenses for the year |
Edge cases worth knowing
Zero cash on hand still returns a valid result of 0 days, not an error — a company with no cash reserves genuinely has zero days of runway at its current burn rate.
Zero annual operating expenses makes the ratio undefined — there’s no spending rate to divide cash by, so the calculator declines to show a result for that case.
Frequently asked questions
Why isn’t this the same as the current ratio?
The current ratio includes all current assets (receivables, inventory) against current liabilities; this measures only actual cash against the daily cost of running the business, a narrower and more urgent question.
What’s a healthy number of days cash on hand?
It varies significantly by industry — a nonprofit or hospital might target 90+ days, while some working-capital-light businesses run comfortably on far less.
Should I use gross or cash operating expenses?
Cash expenses — depreciation and other non-cash charges should be excluded, since they don’t actually draw down the cash balance this ratio is measuring.
