Formula Used
Gross burn measures all cash spending during the selected period. Net burn subtracts cash revenue from those expenses. A negative net burn means operations generated additional cash.
Runway uses cash available after the selected reserve. The forecast compounds monthly revenue and expense growth. Scenario factors then adjust those assumptions for comparison.
How to Use This Calculator
- Select dates, currency, precision, and the calculation method.
- Enter starting cash, revenue, reserves, and planned funding.
- Add operating expenses using the available categories.
- Include optional receivables, payables, taxes, and payment delays.
- Set growth, inflation, seasonality, and target runway assumptions.
- Adjust the conservative, expected, and optimistic scenarios.
- Add monthly records when historical trend analysis is required.
- Press the calculation button to generate results and forecasts.
- Download CSV data or print the report as a PDF.
Understanding Burn Rate and Runway
Gross Burn
Gross burn shows total cash expenses before revenue offsets. It helps teams understand the operating cost structure. High gross burn may be acceptable during planned expansion.
Net Burn
Net burn measures cash lost after cash revenue. It usually provides the clearest runway planning measure. Growing revenue can reduce net burn without cutting investment.
Cash Runway
Runway estimates how long available cash can support losses. It should exclude reserves that management cannot safely spend. Forecasting should use several scenarios instead of one assumption.
Improving the Result
Review hiring, subscriptions, marketing efficiency, and payment terms. Separate recurring costs from unusual one-time purchases. Update the model whenever actual financial results become available.
Worked Example
| Example input | Value |
|---|---|
| Starting cash | $250,000 |
| Three-month cash expenses | $150,000 |
| Three-month cash revenue | $60,000 |
| Gross monthly burn | $50,000 |
| Net monthly burn | $30,000 |
| Estimated runway | 8.33 months before reserves |
Frequently Asked Questions
What is a healthy startup runway?
Many teams target twelve to eighteen months, depending on risk and funding conditions.
Should non-cash expenses be included?
They are usually excluded from cash burn but may support accounting analysis.
Why can net burn be negative?
Negative net burn means cash revenue exceeded cash expenses during the period.
How often should burn rate be reviewed?
Monthly reviews are common, while fast-moving businesses may review weekly.
Does funding reduce burn rate?
Funding increases cash runway, but it does not reduce operating burn itself.
What is the difference between burn and runway?
Burn measures cash usage, while runway measures time remaining before depletion.
Can this calculator model revenue growth?
Yes. Monthly revenue growth, expense growth, inflation, and seasonality are supported.
How are payment delays handled?
The model reduces recognized period cash using the selected collection delays.
Can I compare multiple financial scenarios?
Yes. Conservative, expected, and optimistic assumptions appear beside each other.
How can burn rate be reduced?
Improve pricing, collections, staffing efficiency, vendor terms, and recurring cost control.
Is this financial advice?
No. The calculator provides planning estimates based on user-entered assumptions.