Burn Rate Calculator

Burn Rate is evaluated from Total Monthly Expenses, Monthly Revenue and Current Cash Balance. The calculation reports Gross Monthly Burn Rate, Net Monthly Burn Rate and Runway on Net Burn.

Results

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About the Burn Rate Calculator

Burn Rate is treated here as a quantitative relation between Total Monthly Expenses, Monthly Revenue and Current Cash Balance and Gross Monthly Burn Rate, Net Monthly Burn Rate, Runway on Net Burn and Months to Cash Zero.

The calculator uses a multi formula configuration. Each reported value is read as a direct evaluation of the stored rules with the declared field formats and units.

Formula basis:
Gross Burn = total monthly expenses
Net Burn = expenses - monthly revenue
Runway = cash balance / net burn rate
Burn Multiple = expenses / revenue (ratio of cash spent per dollar earned)

Interpret the outputs in the order shown by the result fields. Optional inputs affect only the outputs that depend on those variables.

Formula & How It Works

The calculation applies the following relations exactly as recorded in the metadata:

Gross Burn = total monthly expenses
Net Burn = expenses - monthly revenue
Runway = cash balance / net burn rate
Burn Multiple = expenses / revenue (ratio of cash spent per dollar earned)

Each output field is produced by substituting the supplied inputs into the relevant relation and then applying the declared rounding or text format.

Worked Examples

Example 1: Series A startup: $280k/month expenses, $45k MRR, $3.2M cash

Inputs

monthly_expenses: 280000 monthly_revenue: 45000 cash_balance: 3200000
Gross Monthly Burn Rate: $280,000/mo. Net Monthly Burn Rate: $235,000/mo. Runway on Net Burn: 13.6 months. Months to Cash Zero: 13.6 months. Burn Multiple: 6.22 x

With Total Monthly Expenses = 280,000, Monthly Revenue = 45,000 and Current Cash Balance = 3,200,000 as the stated inputs, the result is Gross Monthly Burn Rate = $280,000/mo, Net Monthly Burn Rate = $235,000/mo and Runway on Net Burn = 13.6 months. Each value corresponds to the declared output fields.

Example 2: Pre-seed company: $42,000/month expenses, $8,000 MRR, $380,000 in bank

Inputs

monthly_expenses: 42000 monthly_revenue: 8000 cash_balance: 380000
Gross Monthly Burn Rate: $42,000/mo. Net Monthly Burn Rate: $34,000/mo. Runway on Net Burn: 11.2 months. Months to Cash Zero: 11.2 months. Burn Multiple: 5.25 x

With Total Monthly Expenses = 42,000, Monthly Revenue = 8,000 and Current Cash Balance = 380,000 as the stated inputs, the result is Gross Monthly Burn Rate = $42,000/mo, Net Monthly Burn Rate = $34,000/mo and Runway on Net Burn = 11.2 months. Each value corresponds to the declared output fields.

Example 3: Struggling startup: $185k/month expenses, $22k MRR, $680k cash

Inputs

monthly_expenses: 185000 monthly_revenue: 22000 cash_balance: 680000
Gross Monthly Burn Rate: $185,000/mo. Net Monthly Burn Rate: $163,000/mo. Runway on Net Burn: 4.2 months. Months to Cash Zero: 4.2 months. Burn Multiple: 8.41 x

With Total Monthly Expenses = 185,000, Monthly Revenue = 22,000 and Current Cash Balance = 680,000 as the stated inputs, the result is Gross Monthly Burn Rate = $185,000/mo, Net Monthly Burn Rate = $163,000/mo and Runway on Net Burn = 4.2 months. Each value corresponds to the declared output fields.

Example 4: Healthy growth-stage startup: $620k/month expenses, $410k MRR (+$60k MoM growth), $8.5M cash

Inputs

monthly_expenses: 620000 monthly_revenue: 410000 cash_balance: 8500000
Gross Monthly Burn Rate: $620,000/mo. Net Monthly Burn Rate: $210,000/mo. Runway on Net Burn: 40.5 months. Months to Cash Zero: 40.5 months. Burn Multiple: 1.51 x

With Total Monthly Expenses = 620,000, Monthly Revenue = 410,000 and Current Cash Balance = 8,500,000 as the stated inputs, the result is Gross Monthly Burn Rate = $620,000/mo, Net Monthly Burn Rate = $210,000/mo and Runway on Net Burn = 40.5 months. Each value corresponds to the declared output fields.

Common Use Cases

  • Calculate monthly gross and net burn rate for startup
  • Monitor cash consumption relative to revenue
  • Estimate how quickly a startup is spending investor money