Business
Cash runway and stock drag
Earnings × multiple prices the exit. A trading business lives on stock, creditors, rebate lag and cash. This is the other half of the valuation story.
Opening cash
$80,000
Runway
Cash positive
First short year
None
Stock turn
4.1
Working capital
Days that tie up cash
Dead stock
What if I liquidate a slice?
- Inventory
- $207,123
- Dead stock
- $41,425
- Cash freed
- $4,971
- Write-off
- $3,314
- Equity after liquidate
- $14,735,950
Slow stock usually costs a buyer multiple as well as cash. Liquidating a slice frees cash and can support the multiple.
Monthly cash strip
Example trading company cash
Exit equity on this forecast is $14,730,979. Cash is after company tax and the change in working capital, shown month by month.
| Period | Operating cash | Cash balance |
|---|---|---|
| Jan 2026 | $35,645 | $115,645 |
| Feb 2026 | $35,645 | $151,291 |
| Mar 2026 | $35,645 | $186,936 |
| Apr 2026 | $35,645 | $222,581 |
| May 2026 | $35,645 | $258,227 |
| Jun 2026 | $35,645 | $293,872 |
| Jul 2026 | $35,645 | $329,517 |
| Aug 2026 | $35,645 | $365,162 |
| Sep 2026 | $35,645 | $400,808 |
| Oct 2026 | $35,645 | $436,453 |
| Nov 2026 | $35,645 | $472,098 |
| Dec 2026 | $35,645 | $507,744 |
| Jan 2027 | $57,424 | $565,168 |
| Feb 2027 | $57,424 | $622,592 |
| Mar 2027 | $57,424 | $680,016 |
| Apr 2027 | $57,424 | $737,441 |
| May 2027 | $57,424 | $794,865 |
| Jun 2027 | $57,424 | $852,289 |
| Jul 2027 | $57,424 | $909,713 |
| Aug 2027 | $57,424 | $967,138 |
| Sep 2027 | $57,424 | $1,024,562 |
| Oct 2027 | $57,424 | $1,081,986 |
| Nov 2027 | $57,424 | $1,139,410 |
| Dec 2027 | $57,424 | $1,196,835 |
| Jan 2028 | $64,715 | $1,261,550 |
| Feb 2028 | $64,715 | $1,326,264 |
| Mar 2028 | $64,715 | $1,390,979 |
| Apr 2028 | $64,715 | $1,455,694 |
| May 2028 | $64,715 | $1,520,409 |
| Jun 2028 | $64,715 | $1,585,123 |
| Jul 2028 | $64,715 | $1,649,838 |
| Aug 2028 | $64,715 | $1,714,553 |
| Sep 2028 | $64,715 | $1,779,268 |
| Oct 2028 | $64,715 | $1,843,982 |
| Nov 2028 | $64,715 | $1,908,697 |
| Dec 2028 | $64,715 | $1,973,412 |
| Jan 2029 | $72,723 | $2,046,135 |
| Feb 2029 | $72,723 | $2,118,859 |
| Mar 2029 | $72,723 | $2,191,582 |
| Apr 2029 | $72,723 | $2,264,305 |
| May 2029 | $72,723 | $2,337,028 |
| Jun 2029 | $72,723 | $2,409,752 |
| Jul 2029 | $72,723 | $2,482,475 |
| Aug 2029 | $72,723 | $2,555,198 |
| Sep 2029 | $72,723 | $2,627,922 |
| Oct 2029 | $72,723 | $2,700,645 |
| Nov 2029 | $72,723 | $2,773,368 |
| Dec 2029 | $72,723 | $2,846,091 |
| Jan 2030 | $81,514 | $2,927,606 |
| Feb 2030 | $81,514 | $3,009,120 |
| Mar 2030 | $81,514 | $3,090,634 |
| Apr 2030 | $81,514 | $3,172,148 |
| May 2030 | $81,514 | $3,253,663 |
| Jun 2030 | $81,514 | $3,335,177 |
| Jul 2030 | $81,514 | $3,416,691 |
| Aug 2030 | $81,514 | $3,498,205 |
| Sep 2030 | $81,514 | $3,579,720 |
| Oct 2030 | $81,514 | $3,661,234 |
| Nov 2030 | $81,514 | $3,742,748 |
| Dec 2030 | $81,514 | $3,824,262 |
| Jan 2031 | $91,158 | $3,915,420 |
| Feb 2031 | $91,158 | $4,006,578 |
| Mar 2031 | $91,158 | $4,097,735 |
| Apr 2031 | $91,158 | $4,188,893 |
| May 2031 | $91,158 | $4,280,050 |
| Jun 2031 | $91,158 | $4,371,208 |
| Jul 2031 | $91,158 | $4,462,366 |
| Aug 2031 | $91,158 | $4,553,523 |
| Sep 2031 | $91,158 | $4,644,681 |
| Oct 2031 | $91,158 | $4,735,838 |
| Nov 2031 | $91,158 | $4,826,996 |
| Dec 2031 | $91,158 | $4,918,154 |