Burn rate is the rate at which a company consumes cash. Learn how gross and net burn fit into a financial KPI tree.
Burn Rate is the rate at which a company spends cash reserves, usually expressed monthly. Gross Burn = total monthly cash outflows; Net Burn = Gross Burn − Cash Inflows. Runway = Cash on Hand ÷ Net Burn. In a financial KPI tree, burn is the cost-side counterpart to revenue and decomposes into headcount cost, infrastructure, sales & marketing and other OpEx — making it directly traceable to the spending decision behind any runway change.