function calculateSpendRate() {
// 1. Get input values
var balanceInput = document.getElementById('cashBalance').value;
var expensesInput = document.getElementById('monthlyExpenses').value;
var revenueInput = document.getElementById('monthlyRevenue').value;
var resultsArea = document.getElementById('resultsArea');
var alertBox = document.getElementById('alertMessage');
// 2. Validate inputs
if (balanceInput === " || expensesInput === ") {
alertBox.style.display = 'block';
alertBox.innerHTML = 'Please enter your current cash balance and monthly expenses.';
resultsArea.style.display = 'none';
return;
}
// 3. Parse numbers
var balance = parseFloat(balanceInput);
var expenses = parseFloat(expensesInput);
var revenue = revenueInput === " ? 0 : parseFloat(revenueInput);
if (isNaN(balance) || isNaN(expenses) || isNaN(revenue)) {
alertBox.style.display = 'block';
alertBox.innerHTML = 'Please enter valid numerical values.';
resultsArea.style.display = 'none';
return;
}
// Hide alert if valid
alertBox.style.display = 'none';
// 4. Calculate Logic
// Net Burn = Expenses – Revenue
var netBurn = expenses – revenue;
// Daily Spend = Expenses / 30.44 (average days in a month)
var dailySpend = expenses / 30.44;
// Runway calculation
var runwayText = "";
if (netBurn <= 0) {
runwayText = "Infinite (Profitable)";
document.getElementById('displayRunway').style.color = "#198754"; // Green
} else {
var runwayMonths = balance / netBurn;
if (runwayMonths < 1) {
runwayText = "< 1 Month (Critical)";
document.getElementById('displayRunway').style.color = "#dc3545"; // Red
} else {
runwayText = runwayMonths.toFixed(1) + " Months";
// Color logic for runway length
if (runwayMonths < 6) {
document.getElementById('displayRunway').style.color = "#fd7e14"; // Orange
} else {
document.getElementById('displayRunway').style.color = "#198754"; // Green
}
}
}
// 5. Update UI
// Format Currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 0,
});
document.getElementById('displayNetBurn').innerHTML = formatter.format(netBurn);
document.getElementById('displayDailySpend').innerHTML = formatter.format(dailySpend);
document.getElementById('displayRunway').innerHTML = runwayText;
// Show results
resultsArea.style.display = 'block';
}
Understanding Spend Rate and Business Health
In the world of business management and startups, understanding your Spend Rate (often referred to as Burn Rate) is critical for survival. Unlike a loan calculator, which focuses on repayment, a spend rate calculator focuses on operational efficiency and runway. It answers the fundamental question: "How long can we survive at our current pace?"
This calculator helps business owners, financial controllers, and startup founders visualize their cash flow dynamics by analyzing current cash reserves against outgoing operational costs.
Key Metrics Explained
1. Net Monthly Burn Rate
This is the amount of money your company is losing each month. It is calculated by subtracting your monthly revenue from your monthly operating expenses (Gross Spend). If your revenue exceeds your expenses, your Net Burn is zero (or negative), meaning you are cash flow positive.
Formula:Monthly Expenses - Monthly Revenue
Goal: Reduce this number to zero to achieve profitability.
2. Daily Spend Average
While monthly figures are good for planning, daily figures help with mindset. Knowing that your business costs $500 per day to keep the lights on can help contextualize smaller purchasing decisions.
3. Runway
Runway is arguably the most important metric for any early-stage business. It represents the amount of time (usually measured in months) you have left before you run out of cash, assuming your income and expenses remain constant.
Formula:Current Cash Balance / Net Monthly Burn
Interpretation: A runway of less than 6 months is generally considered risky, indicating an urgent need to either raise capital, increase revenue, or cut costs.
How to Optimize Your Spend Rate
If the calculator shows a "Critical" runway (less than 3 months), consider the following steps:
Audit Subscriptions: Review software and service subscriptions. Cancel unused seats or tools.
Renegotiate Vendor Contracts: Ask suppliers for discounts or extended payment terms.
Focus on High-Margin Revenue: Shift focus to products or services that bring in cash immediately with low fulfillment costs.
Regularly calculating your spend rate ensures you are never caught off guard by a cash flow crisis, allowing you to make data-driven decisions for the future of your company.