Cash buffer months my business needs. The Business Emergency Fund Calculator takes monthly operating expenses, months of cover wanted, cash reserve today and returns emergency fund target plus still to save, months covered by today's cash. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Good business decisions come from putting numbers on the options before committing. Run the calculation with your best estimate, then again with a pessimistic one, and see whether the decision survives both. Use the worked example below to check the maths against your own figures.
How the Business Emergency Fund Calculator works
Three to six months of expenses is the usual target for a small business; seasonal or single-client businesses should hold more.
Worked example
With the example values (monthly operating expenses of $40,000, months of cover wanted of 6, cash reserve today of $100,000), the emergency fund target is $240,000.00; still to save $140,000.00, months covered by today's cash 2 months. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is emergency fund target calculated?
emergency fund = monthly operating expenses × months of cover.
Which figures do I need?
Monthly operating expenses, months of cover wanted, cash reserve today. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
How reliable is the result?
As reliable as the estimates you enter. Run the calculation with optimistic and pessimistic inputs to see the range of outcomes before deciding.
