Liquidity / base / Immediate
The business is running low on cash relative to how fast it is spending. AIFO reads the cash in the bank against the pace at which cash is actually leaving each month, after netting whatever is coming in. It measures the usable cash above a basic operating buffer, not the headline balance, because some cash must always stay behind to cover payroll and normal operations. The result is how many months the business can keep operating before that usable cash runs out.
Raising money or arranging new financing takes time, and a business that opens the conversation from a position of scarcity has far less leverage. Based on Y Combinator guidance and broad venture-community consensus, a company needs a comfortable window to run a proper process rather than a fire sale. Corporate Finance Institute and the foundational venture research of Gompers and Lerner treat runway as one of the first numbers any serious investor or lender checks. When runway is short, every other decision gets made under pressure.
The bank balance falls steadily month after month even while the profit and loss statement looks acceptable. Each new forecast quietly pushes the "we need to raise" date closer. Owners often notice they are watching the account balance far more often than they used to.
Model your runway at your current burn and stress it against a slower month, so you know the real date cash gets tight. Identify the two largest levers you control, usually your biggest discretionary spend line and your slowest-moving revenue, and decide now which you would pull first. Start any financing or cost conversation while you still have room to negotiate, not once the buffer is nearly gone.
Northwind Design, an illustrative agency, has about 900,000 in the bank and spends roughly 175,000 more than it collects every month.
Start with the 900,000 balance and set aside a basic operating buffer that has to stay in the account for payroll and normal operations. The usable cash left over, divided by the 175,000 monthly gap between money out and money in, works out to only a handful of months before that usable cash is gone. That is less time than a typical fundraise takes to run properly.
Northwind should start its raise or its cost cuts now, while it still has room to negotiate rather than accept a fire-sale outcome.
Exact thresholds, formulas, and severity bands are omitted from this public view. The full methodology, with every figure, is available in the authenticated app.
Cash operations cannot be sustained beyond ~[redacted] months at current burn without intervention.
The exact thresholds, the formula, and your own figures are in the authenticated app. See it against a real, simulated dataset for Integra Executive Services, our public demo company, or connect your own QuickBooks Online account.