Burn Rate & Runway Calculator mechanism

Model scope

The core burn formula is standard, but the specification is not complete enough for an unambiguous production result. Define behavior for burn<=0, negative cash, direct-net-burn precedence, and zero-cash-date calculation before approval.

• burn=monthly_expenses-monthly_revenue is correct for net cash burn when both inputs are positive monthly cash-flow amounts.
• runway=cash_balance/burn is correct only when burn>0 and cash_balance is nonnegative; burn=0 causes division by zero, while burn<0 indicates cash generation rather than finite runway.
• The zero-cash date has no specified formula, as-of date, calendar-month convention, or treatment of fractional months.
• The alternative input 'net burn directly' is ambiguous because the spec does not define whether it replaces the revenue and expenses inputs or how conflicting values are handled.

Units and conventions

• Monthly revenue, monthly expenses, and net burn must use the same currency and the same time basis; amounts are assumed to be currency units per month.
• Cash balance is assumed to be a currency amount in the same currency as revenue and expenses, not an annual amount, daily amount, or value in minor units such as cents.
• Runway is measured in months and assumes constant monthly net burn with no seasonality, financing, taxes, one-time costs, or timing effects.
• For the worked date examples, a zero-cash date cannot be calculated from the provided specification because no as-of date or date convention is defined.

Inspectable vector

One of 4 source-bound review vectors:

{
  "inputs": {
    "cash_balance": 180000,
    "monthly_revenue": 20000,
    "monthly_expenses": 50000
  },
  "expected_outputs": {
    "net_burn_per_month": 30000,
    "runway_months": 6,
    "zero_cash_date": null
  },
  "working": "burn = 50,000 - 20,000 = 30,000 currency units/month. runway = 180,000 / 30,000 = 6 months. A zero-cash date cannot be computed because the spec provides no as-of date or date-conversion rule."
}

Failure boundary

BREAK_CLAIMED · SELF_FLAGGED

The instrument reaches an undefined division-by-zero result when monthly expenses equal monthly revenue, and its raw formula produces negative runway values for cash-generating cases. Without explicit handling, the UI can show an invalid or misleading runway and zero-cash date.

Other records

Sources and evidence

These pointers bind the page to evidence. They do not grant authority or collapse verification into deployment.

• VERIFIED_LEDGER.json
• evidence-tranche5/tranche5-results.json
• BOUNDARY_HAZARD_CATALOG.json