Burn Rate

Measured as

Measure Burn Rate with the same date, unit basis, and accounting or policy definitions used in the rest of your model.

Operator takeaway

• Gross burn: total cash outflows.
• Net burn: cash outflows minus cash inflows.
• Tie Burn Rate to the same balance-sheet date, scenario, and decision memo you are using elsewhere in the model.
• Document which claims, costs, or adjustments your team includes before comparing numbers across forecasts, covenants, or valuation work.

Next decision

• Quantify the impact with Cash Runway Calculator if you need to turn the definition into an operating assumption.
• Read Cash runway: how to estimate burn, break-even, and survival time if the decision depends on interpretation, policy, or trade-offs beyond the raw formula.