Burn Rate Calculator

Use this calculator to estimate burn rate.

What this calculator does

The burn rate calculator helps estimate how quickly a business is spending cash over time.

It is useful for:

• startup planning
• liquidity management
• runway forecasting
• investor reporting

Formula

Burn Rate = Cash Spent ÷ Months

Where:

• Cash Spent = total cash used over a period
• Months = number of months in that period
• Burn Rate = average cash spent per month

Example calculation

If:

• Cash spent = 60000
• Months = 3

Then:

• Burn rate = 60000 ÷ 3
• Burn rate = 20000

What is burn rate?

Burn rate is the average amount of cash a business uses each month.

Why burn rate matters

This calculation helps businesses:

• monitor cash usage
• plan fundraising timing
• estimate cash runway
• manage risk

When to use this calculator

Use this calculator when you want to:

• review monthly cash consumption
• plan budgets
• estimate how long cash will last
• support board or investor updates

Common mistakes

Common mistakes include:

• mixing one-off and recurring costs without context
• using revenue instead of cash spent
• comparing inconsistent time periods
• ignoring seasonality

Burn rate vs cash runway

These are closely related.

• Burn rate shows monthly cash usage
• Cash runway shows how long current cash can last

Related calculations

You may also want to use:

• Cash Runway Calculator
• Cash Flow Calculator
• Working Capital Calculator

FAQs

What does this calculator do?

It helps you estimate burn rate.

Why is burn rate important?

It shows how quickly a business is using cash.

Is a lower burn rate always better?

Not always. It depends on growth strategy and available funding.