Free calculator
Burn Rate Calculator
Enter Cash at start of period, Cash at end of period and Length of period plus 1 more input — every figure updates as you type. Nothing you type leaves your browser.
How do you calculate Burn Rate?
Monthly net burn
$50,000
Cash consumed per month after customer receipts. This is what sets runway.
- Monthly gross burn
- $145,000Total cash operating spend per month, before any revenue. This is your cost base.
- Implied runway
- 21Months of cash remaining at this net burn, holding burn flat. Returns 0 when net burn is zero or negative.
Results are rounded for display; the calculation runs at full precision.
The maths
How Burn Rate is calculated
The formula this calculator runs, written out so you can check it against your own model rather than trust a black box.
Net burn = (Starting cash − Ending cash) ÷ Months · Gross burn = Net burn + (Cash collected ÷ Months)- Starting cash / Ending cash
- Bank balance at each end of the period, including any short-term deposits you could actually draw on. Exclude financing received during the period, or subtract it from the ending balance first.
- Months
- Length of the period. A quarter absorbs payroll timing, annual software renewals and lumpy customer prepayments far better than a single month.
- Cash collected
- Money actually received from customers across the period. Not invoiced amounts, not revenue recognised under accrual rules — the deposits that appeared in the account.
Reading the result
What the number is telling you
Bands are directional, not verdicts. Stage, price point and contract length move every one of them, so treat these as a starting point for the conversation rather than a grade.
- Net burn at or below zero
- The business generates more cash than it consumes and is default alive on current numbers. Runway is not a constraint, which changes the strategic question from how long you have to how much you could deliberately spend to grow faster.
- Collections cover more than 75% of gross burn
- Close to break-even. Small changes in growth, churn or hiring flip the sign in either direction, so the sensitivity of the plan matters more than its central case. This is the band where a modest cost reduction can remove the funding requirement entirely.
- Collections cover 40–75% of gross burn
- Typical of a funded company in scale-up mode. Runway management is a planning exercise rather than an emergency, but burn is real and the path to covering the remainder should be legible in the revenue plan rather than assumed.
- Collections cover under 40% of gross burn
- Burn is structurally driven by the cost base rather than by a revenue shortfall, so revenue growth alone is unlikely to close the gap in the time available. Model a reduced-spend scenario alongside the plan, and know in advance which costs come out first.
- All outputs return 0
- The period length is zero or missing, so there is nothing to divide by. Set the number of months the two cash balances span — at least one, ideally three.
Gross and net burn answer different questions
Gross burn is the cost base: what leaves the account every month regardless of what customers pay you. It is the number to look at when the question is "what would we have to cut?", because it is the only part of the equation fully within your control.
Net burn is gross burn less collections, and it is the figure that drives runway. It is the number an investor means by "burn". The gap between the two is your revenue, so watching both over time tells you whether burn is falling because you cut costs or because revenue grew — very different facts about a business, and indistinguishable from the net figure alone.
Exclude financing, include everything else
The most common error here is leaving a fundraise or a debt draw inside the period, which makes burn look small or even negative. If money came in from investors or a lender between the two balances, subtract it from the ending cash before you calculate, so that what remains reflects operations only.
In the other direction, resist the urge to exclude anything for being unusual. Cash is cash: annual insurance, tax payments, hardware purchases, the one-off legal bill and the annual tooling renewal all consumed money you now cannot spend. Measuring across a quarter is the honest way to smooth lumpiness — excluding items you dislike is not.
Why bank balances rather than the P&L
Accrual accounting exists to match revenue to the period it was earned in, which is exactly what makes it the wrong instrument for burn. It spreads an annual prepayment from a customer across twelve months while your account received it all in January, and it amortises spending your bank recognised on the day it cleared.
- Annual prepayments distort a single month badly. A large annual invoice landing in one month can make net burn appear near zero, then negative-looking growth the next.
- Deferred revenue is not yours yet. Cash from a twelve-month prepayment funds you now, but eleven months of service still has to be delivered against it.
- A quarter absorbs most of this. Longer periods smooth further, but start hiding the trend you are trying to detect.
Once you have a net burn figure you trust, take it to the runway calculator, which compounds burn growth instead of assuming your cost base stays flat. If burn is being driven by acquisition rather than fixed cost, CAC payback period is the more useful lever.
Definition
Where Burn Rate gets argued about
A calculator settles the arithmetic, not the definition — and the definition is where most disagreements about this number actually live. The glossary entry covers the conventions, the edge cases and how Bastle handles each one.
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Runway is how many months of cash a company has left at its current net burn.
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CAC payback period is the number of months a customer's gross margin must run before it repays what you spent acquiring them.
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Customer acquisition cost is everything spent to win customers divided by the customers actually won.
Learn moreFrequently asked questions
What is the difference between gross burn and net burn?
Should money we raised be included in burn?
What period should burn be measured over?
Does deferred revenue affect burn rate?
What if burn swings from month to month?
Stop recalculating Burn Rate by hand.
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