Runway is usually expressed in weeks or months. For a business burning cash, it is cash on hand divided by net cash outflow per period. For a business with uneven cash flow, a simple ratio is misleading, and a week-by-week projection gives a truer picture of when the balance would fall below a safe minimum.
Knowing the runway turns cash management from a reaction into a plan. With enough warning, a business can speed up collections, delay discretionary spending, arrange financing, or change its hiring plan before options narrow.