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Net Burn Rate Calculator

Enter monthly expenses and monthly revenue to find the net burn rate.

How it is calculated

The tool computes three numbers: net burn = E − R, gross burn = E and coverage = R ÷ E × 100, where E is total monthly operating expenses and R is monthly revenue, both in dollars for the same month. Coverage is the share of your costs that revenue already pays for. Both inputs must be zero or positive; negative values give no result. If revenue exceeds expenses, net burn comes out negative (shown as -$6,000.00 for a 6,000 surplus), meaning the business is generating cash, not burning it. If expenses are zero, coverage is shown as 0%.

Worked example

A company spends $85,000 a month and brings in $32,000. Net burn: 85,000 − 32,000 = $53,000.00. Gross burn is the full $85,000.00. Coverage: 32,000 ÷ 85,000 × 100 = 37.65%, so revenue pays for a bit over a third of costs. With $318,000 in the bank, a flat $53,000 net burn would last 6 months; you would divide cash by the net burn figure yourself, since this tool does not ask for cash balance.

Try this example →

Common mistakes

  • Using gross burn (expenses alone) to estimate runway; runway depends on net burn, which already subtracts revenue.
  • Entering annual or quarterly totals for one field and monthly for the other; both inputs must cover the same single month.
  • Putting cash receipts or bookings into revenue when they are not collected yet; net burn is about cash, so use money actually received.
  • Leaving one-off costs (a big equipment purchase, annual insurance) in the monthly expense figure without noticing; they inflate one month and make the trend misleading.
  • Reading a negative net burn as an error: it means revenue exceeds expenses, i.e. a monthly surplus.

Sources

About this calculator

Net burn rate is how much cash a company actually loses each month once revenue is factored in: monthly operating expenses minus monthly revenue. It’s distinct from gross burn (total operating expenses alone, ignoring any revenue coming in), and it’s the number that directly determines runway — cash in the bank divided by net burn tells you how many months the company can operate before running out of money.

Startup founders track net burn monthly to know when they need to raise their next round, and it’s one of the first numbers venture investors ask for in due diligence, since a shrinking net burn (revenue catching up to expenses) signals a path to sustainability while a widening one signals urgency. Subtract monthly revenue from monthly expenses to get net burn; the page also shows what share of your costs revenue already covers.

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Comments (1)

  • Editorial team

    Net burn is only half of the runway question, because this tool has no cash balance field. Divide your cash in the bank by the net burn figure to get months left, and rerun with expenses and revenue averaged over a few recent months so one odd month does not distort it. The coverage percentage shows how much of your spending revenue already pays for. Which averaging window do you use?

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