# What is my burn rate?

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.

- Page: https://www.acalculator.org/finance/burn-rate-calculator
- JSON spec: https://www.acalculator.org/finance/burn-rate-calculator.json
- Version: 499bd9ae2c0e

## Default answer

Example with the default inputs (Work it out from Monthly cash flows, Cash spent per month $55,000.00, Cash received per month $25,000.00, Cash on hand $600,000.00): The net cash burn is $30,000.00 a month.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| from | Work it out from | Monthly cash coming in and going out, or the cash balance at two dates. |
| out | Cash spent per month | All the cash going out in a month: payroll, rent, suppliers and other costs. |
| in | Cash received per month | All the cash coming in in a month, mostly from customers. Optional; empty counts as $0. |
| cash | Cash on hand | The cash the company has now. |
| start | Cash at the start | The cash balance at the start of the period. |
| end | Cash at the end | The cash balance at the end of the period: the cash on hand now. |
| months | Months between | How many months passed between the two balances. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| burn | Net burn per month | Cash out − cash in per month, or (cash at the start − cash at the end) ÷ months. Below $0 when cash grows. |
| gross | Gross burn per month | All the cash spent per month. Shown when working from cash flows. |
| runway | Runway | Cash on hand ÷ net burn, in months. Shown while cash is falling (net burn above $0). |

## 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.

## Worked examples

1. from = flows, out = $6,000.00, in = $0.00, cash = $36,000.00 gives burn = $6,000.00, gross = $6,000.00, 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/.
2. from = flows, out = $4,000.00, cash = $36,000.00 gives burn = $4,000.00, 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.
3. from = balances, start = $900,000.00, end = $600,000.00, months = 3 gives burn = $100,000.00, 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.
4. from = flows, out = $55,000.00, in = $25,000.00, cash = $600,000.00 gives gross = $55,000.00, burn = $30,000.00, 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.

## FAQ

### What is a burn rate?

The burn rate is how fast a company spends its cash, usually per month. Startups that are not yet profitable watch it closely, because it decides how long they can keep going before they need more money.

### How do I calculate the burn rate?

Take the cash spent in a month and subtract the cash received. A company that spends $55,000 a month and takes in $25,000 burns $30,000 a month. Or take the cash balance at two dates: $900,000 falling to $600,000 over 3 months is (900,000 − 600,000) ÷ 3 = $100,000 a month.

### What is the difference between gross and net burn?

Gross burn is all the cash spent in a month. Net burn takes off the cash coming in, so it is the amount the cash balance actually falls each month. Runway uses the net burn.

### How do I calculate the runway?

Divide the cash on hand by the monthly net burn. $36,000 in the bank with a $6,000 monthly loss lasts 36,000 ÷ 6,000 = 6 months; cut the loss to $4,000 and it lasts 9 months.

### What if cash is going up?

Then the net burn is below $0 and there is no runway to show: the cash balance grows at that rate. The page leaves the runway out until cash is falling.

### How much runway should a startup have?

It depends on the company’s plan and on how long it takes to raise more money or reach profit. Raising money can take months, so plan the next round well before the runway ends.

## 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)