Growing Broke. It fell from 2.2 months to 1.7, below its 2-month floor, even as revenue grew. If nothing changes it stays near 1.6 months. Deposits, tighter terms, fewer write-offs and restored follow-up lift it to about 4 months by February and 5.8 by October 2027, above its 4-month ceiling, which turns into a decision about what the extra cash is for.
Illustrative. Juniper Ridge Advisory is a fictional firm with a full year of modeled data, analyzed the way we analyze yours. The green band is the healthy range; the dotted line is where the Growth Plan is expected to take it.
How to calculate it
Average bank balance divided by average monthly operating costs, including payroll.
$900,000 in the bank and $360,000 a month in operating costs is 2.5 months.
2 to 4 months.
One slow-paying client or one bad month away from trouble, and the bank balance starts making payroll decisions.
Idle cash that could fund hires, marketing or a distribution.
Days to Get Paid first, then Profit by Client and Profit by Service.
Fast growth. A profitable firm can still run short of cash, because it pays its people before clients pay it. Growing Broke, one of our example firms, shows how it happens.