How the projections work

Where the figures come from

Every chart uses the annual and quarterly reports the company files with the US Securities and Exchange Commission (SEC), read from the SEC’s EDGAR system. Figures are shown as filed, with no adjustments.

• Revenue is the company’s reported revenue.
• Expenses are revenue minus operating income: everything the company spent to earn that revenue. Where a company doesn’t report operating income, as with many banks and insurers, pre-tax income is used, then net income.

The lines

Each quarter adds a point for the latest 12 months: four back-to-back quarterly reports added together, so seasonal swings cancel out.

Reached break-even

A company has reached break-even when it reported a loss in every year before a point and a profit in every year since. Companies whose lines cross back and forth don’t count.

Cash runway

For a company losing money over the latest 12 months, the card shows how long its cash would last at the rate it’s been using it:

• Cash is cash, cash equivalents and short-term investments on the latest balance sheet.
• Cash burn is free cash flow over the latest 12 months: cash from operations less spending on property and equipment. A company whose free cash flow is positive isn’t burning cash, so it has no runway figure.

The runway is cash divided by a year’s cash burn, counted from the balance sheet’s date. Banks and insurers don’t get one, because the cash they hold is largely their customers’. Subscribers can mark the date the cash would run out on any chart, and see Racing the clock: the companies projected to reach break-even whose cash runs out first.