Cash Shot Clock™

Formula

Days Remaining = Cash on Hand ÷ (Average Monthly Net Cash Change ÷ 30)

Net cash change is bank truth: every debit and every credit that moved through the account. That includes debt principal, owner draws, capital purchases, and tax payments, all of which drain a bank account without touching the profit and loss statement the same way.

What the bands mean

Days remaining	Reading
Under 30 days	Emergency. This is the only number that matters this week.
30 to 90 days	Tight. The quarter is critical. Prefer moves that change cash quickly.
90 to 180 days	Healthy, not strong. Room to make real moves, with the clock still worth watching.
180 to 365 days	Strong. A better position than most companies carry.
Over 365 days	The constraint is almost certainly not cash.

The window matters as much as the number

Use 12 completed months of history where you have it, falling back to 6, then to 3. The current partial month never counts, no matter how large its swing.

A shorter window is not a conservative choice, it is a noisier one. One large collection or one delayed payable will distort a two-month average badly enough to move you two bands.

Two floors that override the trend

A rising cash balance is not a safety guarantee, and the clock has two floors that ignore direction entirely.

The zero floor. A balance at or below zero is zero days, full stop. A trend cannot make payroll.

The fragility floor. A balance that cannot cover 30 days of average monthly outflow is an emergency even when cash is climbing, because one bad month ends it.

When cash is going up

If the balance is genuinely building, the clock is not your constraint and you should use the room deliberately. That is the good case.

The honest follow-up question is where the money came from. Cash building while profit is thin usually means outside money: customer deposits, a loan, or the owner's own pocket. Outside money does not remove the wall, it only pushes it further out. Deposits get earned or refunded, loans get repaid, and owner cash runs out. Do not treat it as earned until it is.

Why a shot clock and not runway

They are different instruments, and the difference is mechanical rather than rhetorical.

Runway asks what happens if the money coming in stops tomorrow. It is usually calculated from operating expenses, which means it misses debt principal, owner draws, and capital spending. It is a survival estimate. Those three omissions are also the most common reason a profitable business has no cash; we walked through all of them in why is my business profitable but I have no cash.

The Cash Shot Clock™ asks how long the business can keep operating as it actually operates, using the net movement of real cash through a real bank account. It is a constraint on decisions, not a survival estimate.

That constraint is the whole point. A 90-day clock means you do not fund bets that pay off in 120 days. The number is only useful if it changes what you are willing to commit to.

Common mistake

Calculating burn from a single month, or from the month you happen to be in. Use completed months, and use as many of them as your history allows.