METHOD & GUIDANCE
How this calculation works
Enter figures from the same period and on a consistent VAT-inclusive or VAT-exclusive basis. Tool IQ recalculates every output immediately; nothing you enter is saved or sent to us.
How to use the result
Protect a safety buffer first, then compare base, lower-income and cost-reduction cases to set an action trigger before cash becomes urgent.
Worked example
The opening case protects 10,000 from a 50,000 balance and burns 6,000 net each month, leaving about 6.7 months of usable runway.
Common mistakes
- Using accounting profit instead of cash movement.
- Ignoring one-off payments and collection timing.
- Treating the protected buffer as spendable runway.
Frequently asked questions
Is this calculator free?
Yes. It requires no account and stores no calculation inputs.
Can I use the answer for a formal filing?
No. It is a planning estimate, not accounting, tax, legal or investment advice. Confirm material decisions with a qualified professional.
Should I include VAT?
Use a consistent basis throughout. Businesses that recover input tax commonly model net figures; consumer-facing prices are often considered gross.
Continue the decision
- Break-even Calculator — Find the sales volume needed to cover every cost.
- Contribution Margin Calculator — See how much each sale contributes to fixed costs.
Method reviewed 26 July 2026. Figures are illustrative and calculated locally in your browser.