Cash Runway Calculator
Calculate how many months a penny stock company can survive at its current burn rate. See the projected cash-out date and dilution risk assessment — the two most important numbers for any pre-revenue penny stock position.
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How to Calculate Cash Runway for a Penny Stock
Cash runway is the number of months a company can continue operating at its current spending rate before running out of money. For pre-revenue penny stocks, this is the single most important number because it tells you when the company will need to raise money — and raising money means dilution.
Where to find the numbers
Open the company's most recent 10-Q filing on SEC EDGAR:
- Cash on hand: Balance sheet → "Cash and cash equivalents" line item
- Burn rate: Compare the cash balance between two consecutive quarters. The difference is the quarterly burn. Or use total operating expenses from the income statement ÷ 3 for the monthly burn.
- Revenue: Income statement → top line. Subtract this from the burn rate to get the net burn rate.
What the dilution risk levels mean
- Critical (<3 months): Financing is imminent. The company has no choice but to raise capital — expect an offering announcement at any time.
- High (3-6 months): The company is likely already negotiating financing terms. Watch for S-3 shelf registration filings.
- Moderate (6-12 months): Some breathing room, but the clock is ticking. Monitor quarterly filings for changes in burn rate.
- Low (>12 months): No immediate pressure. The company has time to execute its business plan before needing capital.
Related Tools
- Dilution Calculator — Model exactly how much a future offering will dilute your position
- SEC Insider Tracker — Check if insiders are buying or selling ahead of a financing event
- Profit Calculator — Calculate your break-even price including commissions
- Due Diligence Guide — Full 7-step framework including cash runway analysis