Cash & working capital
Burn Rate
Formula reviewed by Tahir Asif, CMA
How fast a company spends cash, usually measured monthly, as gross burn or net burn.
Gross burn is total monthly cash expenses. Net burn subtracts any revenue coming in, leaving the actual monthly decrease in the bank balance — net burn is what determines runway.
A company can have high gross burn but low net burn if revenue is substantial, or the two figures can converge to nearly the same number for an early, pre-revenue company. Which one is being discussed matters for interpreting any burn-related claim.
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