Small Business · Bookkeeping
Cash flow vs profit
Why a profitable business can still run out of cash.
6 min read
Try this
You have $15,000 in the bank. Monthly costs: rent $4,000, payroll $7,000, software $1,000. What's your runway?
Show suggested answer
Monthly burn = $4,000 + $7,000 + $1,000 = $12,000. Runway = $15,000 ÷ $12,000 ≈ 1.25 months. That's tight — you'd want to either bring in cash quickly or cut costs.
Done with this one?
Mark it complete to earn +10 XP and keep your streak alive.
Business Financials provides educational information only and does not provide financial, tax, investment, or legal advice.