Cash Balance

Definition

Cash balance is the amount of cash (and often cash equivalents) available at a point in time. It is the starting point for runway planning.

Example

If you have $1.2M in the bank and $200k restricted cash, available cash balance is $1.0M.

How to use it

• Use cash balance with net burn to estimate runway.
• Separate restricted cash from available operating cash for planning.
• Track cash balance alongside collection timing and upcoming obligations.
• Reconcile bank balance to ledger monthly to catch timing issues early.

Common mistakes

• Assuming all cash is available (ignoring restricted or pledged cash).
• Using a static balance without forecasting inflows and outflows.
• Ignoring upcoming debt payments or vendor prepayments that reduce usable cash.

Why this matters

This term matters because cash timing and risk are usually the difference between a plan that works on paper and a plan that survives. Use consistent definitions so decisions are comparable over time.

Practical checklist

• Write a 1-line definition for "Cash Balance" that your team will use consistently.
• Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
• Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
• Use a calculator that references this term (e.g., Cash Runway Calculator) to sanity-check assumptions.
• Read the related guide (e.g., Cash runway: how to estimate burn, break-even, and survival time) for context and common pitfalls.

Where to use this on MetricKit