Business Calculators

Burn Rate Calculator

Burn Rate Calculator estimates average monthly cash reduction over a period by subtracting ending cash from starting cash and dividing by months. This is a net cash burn measure: customer receipts, financing, investments, one-time payments, and working-capital changes are already mixed into the cash movement. It is not the same as gross monthly operating expenses.

Runs locally — files stay on your device

Starting cash

Ending cash

Months

Quick answer

What is monthly burn from 500,000 to 380,000 over six months?

Average monthly net burn is 20,000.

Formula: (500,000 − 380,000) ÷ 6 = 20,000

Net burn measures average cash decline

Monthly net burn = (starting cash − ending cash) ÷ months. A negative result means cash increased over the interval, which may reflect operations, financing, or another inflow.

How it works

Use cash balances measured consistently at two dates and the elapsed month count. Reconcile major financing and one-off events before using the average for planning.

Key concepts

Net and gross burn differ

Gross burn usually refers to cash operating expenses; net burn offsets operating cash receipts.

Averages hide monthly volatility

Annual insurance, equipment, financing, and seasonal collections can distort one interval.

When to use it

Summarize net cash decline across a stable interval.
Check a runway input.
Compare burn scenarios with documented assumptions.

When not to use it

Do not call net burn gross operating spend.
Do not include a financing round without explaining it.
Do not extrapolate a volatile historical average blindly.

Worked examples

Six-month burn

Input: 500,000 start; 380,000 end; 6 months
Expected output: 20,000 per month

Cash declined 120,000 across six months.

Cash increase

Input: 200,000 start; 260,000 end; 3 months
Expected output: −20,000 net burn

The negative result signals net cash growth.

Financing inside interval

Input: Cash decline offset by new investment
Expected output: Historical net burn understated

Financing is not operating revenue.

Common mistakes

Calling every cash decline operating burn

Investments and one-time payments may be included. Correction: Reconcile cash movement.

Ignoring financing inflows

Net burn can look artificially low. Correction: Separate financing when estimating operations.

Using partial months inconsistently

The denominator becomes inaccurate. Correction: Measure elapsed time consistently.

Best practices

Reconcile cash balances to statements.
Separate recurring operations from financing and one-offs.
Use forward scenarios as well as historical average.

Limitations and privacy

The result is a simplified management estimate, not accounting, tax, legal, or investment advice.
The metric averages the entire interval and does not classify cash flows.
Future burn can differ from historical burn.

Business figures are calculated locally in this browser and are not uploaded.

Frequently asked questions

What is net burn rate?

Average monthly cash decrease after inflows and outflows reflected in balances.

Can burn rate be negative?

Yes. It means cash increased during the period.

Is burn rate the same as expenses?

Not necessarily; net cash movement includes receipts and other flows.

Should financing be included?

Reconcile it separately when estimating operating burn.