Methodology

We believe a planning tool is only useful if you can check its logic. Everything below describes the calculation that runs in your browser. There is no hidden model, no AI and no data from other users.

1. Inputs and what they mean

• Available cash reserves — the cash you have today. This is the balance at Month 0.
• Minimum reserve — a balance you don't want to go below. It is a threshold for reporting, not money that is removed.
• Monthly fixed and variable expenses — what you spend each month. The calculator treats both the same way in the projection; the split exists so you can cut them separately.
• Income sources — the estimated monthly cash you receive from each client or income stream, after taxes and payment-processing costs.
• Disruption — which sources are at risk, what percentage of each is lost (5–100%), and the month the loss begins.
• Plan B — reductions to fixed and variable expenses with a start month, and replacement revenue with its own start month.

2. Income assumptions

Income is monthly net cash: the money that actually reaches you and can be spent. The calculator does not calculate income tax, social contributions, VAT or corporate tax, because these vary by country and personal situation. If you invoice €4,000 but keep roughly €2,800 after taxes and fees, enter €2,800.

Total monthly income is the sum of all sources. The monthly income lost in the disruption is:

income lost =
  Σ (source amount × loss % ÷ 100)

summed over every source
marked as at risk

3. Expense assumptions

total expenses =
  fixed expenses + variable expenses

reduced fixed =
  max(0, fixed expenses
         − fixed reduction)

reduced variable =
  max(0, variable expenses
         − variable reduction)

reduced expenses =
  reduced fixed + reduced variable

Reductions can never make an expense category negative. If you enter a reduction larger than the expense itself, it is capped at the expense amount and the calculator tells you so.

4. The month-by-month projection

The projection starts with today's balance and steps forward one month at a time:

balance[0] = available cash reserves

for each month m = 1 … N:
  balance[m] = balance[m − 1]
             + income[m]
             − expenses[m]

N is the projection horizon: 12 months by default, or 24 months. Balances are reported at the end of each month.

5. Timing assumptions

• Month 1 is the first month of the projection. A change that “starts in month k” applies in full to month k and every month after it.
• Changes are not phased in or prorated within a month.
• Once a loss, cut or new revenue starts, it continues until the end of the projection.
• Replacement revenue may start before the loss — for example, if you win a new client before an existing one leaves.

6. The three scenarios

All scenarios start from the same balance and use the same horizon.

7. Runway and threshold crossings

For each scenario, the calculator looks for the first month-end balance that is below the threshold (your minimum reserve, and separately zero). A balance exactly equal to the threshold is not counted as below it. There are three possible results:

• Already below — today's balance is already under the threshold (for example, a minimum reserve higher than your savings).
• Reached in month m — the first month-end below the threshold.
• Not reached within N months — the balance stays at or above the threshold for the whole projection. We never convert this into a specific or “infinite” number of months.

Because money doesn't all leave on the last day of the month, the calculator also gives a continuous approximation. It assumes cash flows evenly through the crossing month and interpolates linearly:

approximate months =
  (m − 1)
  + (balance[m − 1] − threshold)
    ÷ (balance[m − 1] − balance[m])

This figure is shown rounded to the nearest half month (“about 7.5 months”) to avoid false precision. Values below one month are shown as “less than 1 month”. Runway figures are never negative.

8. Break-even replacement revenue

This is the additional monthly income needed, once the loss is fully in effect, for income to cover expenses:

break-even (without cuts) =
  max(0, total expenses
         − income after loss)

break-even (with cuts) =
  max(0, reduced expenses
         − income after loss)

remaining gap =
  max(0, break-even (with cuts)
         − replacement revenue)

If your expenses were already higher than your income before the loss, break-even revenue includes that existing gap as well.

9. Effect of each Plan B measure

To show how much each part of your plan contributes, the calculator runs one extra projection: the loss plus expense cuts, without replacement revenue.

effect of cuts =
  final balance (loss + cuts)
  − final balance (Scenario B)

effect of new revenue =
  final balance (Scenario C)
  − final balance (loss + cuts)

10. Rounding and validation

• Calculations use full precision. Money is displayed rounded to whole currency units.
• Empty, negative or invalid entries are treated as zero, with a message explaining the problem. The results never show NaN or Infinity.
• Changing the currency changes only the formatting. No exchange rates are applied.

11. What the model does not include

• Taxes owed on income, or timing differences between earning and paying tax.
• Late or irregular client payments, unless you reflect them in the amounts and start months you enter.
• Inflation, interest on savings or debt, and investment returns.
• One-off or annual expenses, unless you average them into monthly figures.
• The probability that any scenario will happen.

Estimates, not guarantees

Spotted something that looks wrong? Please tell us at support@akrinum.com — correctness matters more to us than anything else on this site.

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