Free course · Lesson 15 · 3 min
Cash, burn, runway and going concern
In 3 minutes: how long a company’s cash lasts, what “going concern” means, and where Panda Desk shows both.
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01Cash in, cash out
Est Cash is the money the company has. Burn Rate is the cash it loses each quarter running the business.
One quarter of burn uses up almost all of it.
02Runway: the months left
Divide the cash by what burns each month and you get the runway. PNDA’s is about 3.3 months.
- NowEst Cash: $2.9M
- ~3 monthsone quarter burned, about $0.3M left
- ~3.3 monthsthe cash runs out, unless new money comes in
03Short runway, new shares
Months of cash, not years, means the company must raise money soon. For a small cap, that usually means selling new shares.
04Going concern: the warning in writing
A going-concern warning is the company, or its auditor, stating in the 10-Q or 10-K that there is substantial doubt it can keep operating. In plain words: without new money, the cash may not last.
05Where PNDA wrote it
PNDA’s last 10-Q repeats the going-concern language. The same report shows its ATM already selling shares.
063 checks on any company’s cash
Sources
- Form 10-Q: the quarterly report, with the cash on the balance sheet and the cash flow statement.
- Form 10-K: the annual report, with the audited financial statements.
Panda Desk shows these rows for any small cap, next to your montage. tspanda.com
Not financial advice. PNDA is fictional, and nothing here is a recommendation to buy or sell.