Cash Break-even

Measured as

Measure Cash Break-even with the same date, unit basis, and accounting or policy definitions used in the rest of your model.

Misused when

• Confusing cash break-even with profitability in financial statements.
• Ignoring collections timing (AR) and deferred revenue effects.
• Treating one-time cash events as sustainable break-even.

Operator takeaway

• Cash break-even focuses on cash timing (collections, payables, prepay), not accounting profit.
• A company can be accounting-profitable but still cash-negative if working capital is consuming cash.
• Track cash break-even alongside runway to gauge survival risk.
• Tie Cash Break-even to the same balance-sheet date, scenario, and decision memo you are using elsewhere in the model.
• Document which claims, costs, or adjustments your team includes before comparing numbers across forecasts, covenants, or valuation work.

Next decision

• Quantify the impact with Cash Runway Calculator if you need to turn the definition into an operating assumption.
• Read Runway and burn: gross vs net burn, working capital, and cash levers if the decision depends on interpretation, policy, or trade-offs beyond the raw formula.