Burn Rate Calculator
Measure historical net cash draw from your company's start and end cash balances.
Burn Rate Calculator
Table of Contents
What is Burn Rate?
Burn rate is the rate at which a company spends its cash reserves over time. It's a critical metric for startups and businesses that helps:
- Monitor cash flow and financial health
- Plan fundraising timing and requirements
- Make strategic decisions about spending and growth
- Determine how long current funds will last
- Adjust business operations based on financial runway
How to Use the Calculator
To calculate your company's burn rate:
- Enter your starting cash balance
- Input your ending cash balance
- Specify the time period in months
- Click "Calculate" to see your burn rate metrics
The calculator will provide your monthly and annual burn rates, and a simple runway estimate that assumes an observed positive net draw continues unchanged.
Understanding Key Metrics
Monthly Burn Rate
Starting balance minus ending balance, divided by the entered months. A negative result means the balance increased during the period.
Annual Burn Rate
The observed monthly net draw multiplied by 12. This annualized historical value is not a spending forecast.
Cash Runway
A simple estimate assuming the observed positive net draw continues unchanged; it is unavailable when no positive draw was observed.
Best Practices
- Monitor burn rate monthly to maintain accurate tracking
- Compare periods only when the balance dates and cash accounts use the same scope
- Use your own cash-flow forecast and funding assumptions to compare runway scenarios
- Adjust spending based on runway and fundraising timeline
- Review burn rate alongside other key financial metrics
Frequently Asked Questions
What's a healthy burn rate for a startup?
There is no universal target implied by this calculation. It reports a past net balance change; assess future runway with your own expected cash receipts and payments.
How often should I calculate burn rate?
Calculate burn rate monthly to maintain accurate financial tracking. More frequent monitoring may be needed during periods of rapid growth or financial stress.
What if my burn rate is too high?
If your burn rate is too high, consider reducing non-essential expenses, optimizing operations, or accelerating revenue generation. Compare any changes against your own projected receipts, payments, and funding plan.
Source and scope (accessed 2026-09-29): Stripe’s burn-rate explainer distinguishes gross spending from net burn after revenue. This tool divides the observed cash-balance change by elapsed months; financing and other cash movements can affect that change, so it does not isolate operating burn or forecast future cash flow.