{
  "id": "burn-rate",
  "version": "499bd9ae2c0e",
  "status": "published",
  "name": "Burn Rate Calculator",
  "question": "What is my burn rate?",
  "summary": "Works out a company’s monthly cash burn (gross and net) from its cash flows or from two cash balances, and the runway: how many months the cash lasts at that rate.",
  "category": "finance",
  "subcategory": "business",
  "url": "https://www.acalculator.org/finance/burn-rate-calculator",
  "markdown": "https://www.acalculator.org/finance/burn-rate-calculator.md",
  "kind": "function",
  "method": "From cash flows: gross burn = cash spent per month; net burn = cash spent − cash received per month; runway = cash on hand ÷ net burn. From balances: net burn = (cash at the start − cash at the end) ÷ months; runway = cash at the end ÷ net burn.",
  "assumptions": [
    "The monthly burn stays the same in the months ahead; runway is in months of that burn.",
    "Cash only: what is billed but not yet paid, and non-cash costs such as depreciation, are left out.",
    "Arithmetic is exact on the typed decimals; money shows to the cent and the runway to 1 decimal, halves rounded up."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "from": {
        "title": "Work it out from",
        "description": "Monthly cash coming in and going out, or the cash balance at two dates.",
        "type": "string",
        "enum": [
          "flows",
          "balances"
        ]
      },
      "out": {
        "title": "Cash spent per month",
        "description": "All the cash going out in a month: payroll, rent, suppliers and other costs.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "in": {
        "title": "Cash received per month",
        "description": "All the cash coming in in a month, mostly from customers. Optional; empty counts as $0.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "cash": {
        "title": "Cash on hand",
        "description": "The cash the company has now.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "start": {
        "title": "Cash at the start",
        "description": "The cash balance at the start of the period.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "end": {
        "title": "Cash at the end",
        "description": "The cash balance at the end of the period: the cash on hand now.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "months": {
        "title": "Months between",
        "description": "How many months passed between the two balances.",
        "type": "number",
        "minimum": 0.01,
        "maximum": 1200
      }
    }
  },
  "outputs": {
    "burn": {
      "label": "Net burn per month",
      "description": "Cash out − cash in per month, or (cash at the start − cash at the end) ÷ months. Below $0 when cash grows.",
      "format": "money"
    },
    "gross": {
      "label": "Gross burn per month",
      "description": "All the cash spent per month. Shown when working from cash flows.",
      "format": "money"
    },
    "runway": {
      "label": "Runway",
      "description": "Cash on hand ÷ net burn, in months. Shown while cash is falling (net burn above $0).",
      "format": "number"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "from": "flows",
      "out": 55000,
      "in": 25000,
      "cash": 600000,
      "start": 900000,
      "end": 600000,
      "months": 3
    },
    "outputs": {
      "burn": 30000,
      "gross": 55000,
      "runway": 20
    },
    "text": "The net cash burn is $30,000.00 a month."
  },
  "examples": [
    {
      "given": {
        "from": "flows",
        "out": 6000,
        "in": 0,
        "cash": 36000
      },
      "expect": {
        "burn": 6000,
        "gross": 6000,
        "runway": 6
      },
      "source": "Arizona State University, Edson E+I Institute, Startup Financial Metrics Every Founder Should Track (2026-08-06): $36,000 in the bank, losing $6,000 a month, is 6 months of runway; at $4,000 a month, 9 months, https://entrepreneurship.asu.edu/blog/2026/08/06/startup-financial-metrics-every-founder-should-track/"
    },
    {
      "given": {
        "from": "flows",
        "out": 4000,
        "cash": 36000
      },
      "expect": {
        "burn": 4000,
        "runway": 9
      },
      "source": "Arizona State University, Edson E+I Institute, Startup Financial Metrics Every Founder Should Track (2026-08-06): $36,000 in the bank, losing $6,000 a month, is 6 months of runway; at $4,000 a month, 9 months, https://entrepreneurship.asu.edu/blog/2026/08/06/startup-financial-metrics-every-founder-should-track/: cutting the monthly loss to $4,000 stretches the runway to 9 months"
    },
    {
      "given": {
        "from": "balances",
        "start": 900000,
        "end": 600000,
        "months": 3
      },
      "expect": {
        "burn": 100000,
        "runway": 6
      },
      "source": "U.S. Securities and Exchange Commission, Office of the Advocate for Small Business Capital Formation, Glossary (burn rate: the rate at which a company spends its cash over time, frequently discussed as a monthly rate), https://www.sec.gov/resources-small-businesses/glossary; hand calculation in content.mdx; Python 3 check in docs/progress/WP-137/xcheck.py: (900,000 − 600,000) ÷ 3 = 100,000 a month; 600,000 ÷ 100,000 = 6 months"
    },
    {
      "given": {
        "from": "flows",
        "out": 55000,
        "in": 25000,
        "cash": 600000
      },
      "expect": {
        "gross": 55000,
        "burn": 30000,
        "runway": 20
      },
      "source": "U.S. Securities and Exchange Commission, Office of the Advocate for Small Business Capital Formation, Glossary (burn rate: the rate at which a company spends its cash over time, frequently discussed as a monthly rate), https://www.sec.gov/resources-small-businesses/glossary; hand calculation in content.mdx; Python 3 check in docs/progress/WP-137/xcheck.py: 55,000 − 25,000 = 30,000 a month; 600,000 ÷ 30,000 = 20 months"
    }
  ],
  "sources": [
    "U.S. Securities and Exchange Commission, Office of the Advocate for Small Business Capital Formation, Glossary (February 2, 2024): burn rate is the rate at which a company spends its cash over time, frequently discussed as a monthly rate. https://www.sec.gov/resources-small-businesses/glossary (retrieved 2026-10-19)",
    "Arizona State University, Edson Entrepreneurship + Innovation Institute, Startup Financial Metrics Every Founder Should Track (August 6, 2026): burn rate shows how much money a company is losing each month; runway shows how long it can operate before it runs out of cash; $36,000 in the bank losing $6,000 a month is 6 months of runway, 9 months at $4,000. https://entrepreneurship.asu.edu/blog/2026/08/06/startup-financial-metrics-every-founder-should-track/ (retrieved 2026-10-19)"
  ],
  "related": [
    "cash-flow",
    "break-even",
    "payback-period"
  ],
  "changelog": []
}