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Revenue

Burn Rate Calculator

Burn Rate measures how quickly a company's cash balance is shrinking, the number that turns a bank balance into a countdown.

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Monthly Burn Rate

$40,000

What This Means

This is net burn, how much cash the business actually consumed in the month. Feed it into the Runway calculator to see months of cash left.

Want the full picture, not just this one number?

Try the SaaS Growth Health Calculator

The Formula

Burn Rate = Starting Cash Balance - Ending Cash Balance (over one month)

Why It Matters

Burn rate is meaningless without runway, which is exactly why the two are usually calculated together. A rising burn rate that isn't matched by faster revenue growth is one of the earliest, clearest warning signs that a company's spending has outpaced what the business can sustain.

Example

A company starts the month with $500,000 in cash and ends with $460,000. Burn rate is $500,000 minus $460,000, which equals $40,000 for the month.

Frequently Asked Questions

  • This calculates net burn, the actual change in cash balance. Gross burn (total cash out, ignoring revenue coming in) is a different, usually larger, number.

  • Most startups track it monthly alongside runway, and more frequently during periods of rapid spending change, like a hiring push or a new marketing channel test.

Related Calculators

Runway Calculator

From the Glossary

Burn RateRunwayFree Cash Flow
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