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Finance

Burn Rate

Also known as burn, cash burn, net burn

How much cash your company spends (beyond what it earns) each month before it becomes profitable.

Example

Spending ₹12,00,000 but earning ₹2,00,000 a month is a ₹10,00,000 monthly burn.

Formula

Net Burn = Cash Spent − Cash Earned (per month)

Related terms

Runway
How many months you can keep operating before you run out of cash, at your current spending rate.
Break-even
The point where your revenue exactly covers your costs — no profit, no loss. After this, you start making money.

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