The rate at which a company consumes cash to cover expenses. (Typically expressed monthly or weekly). It is usually applied to a company with zero or low revenues or a high level of expenses designed to grow fast to grab market share. Burn rate gives a metric of financial health and status of aggressive growth. Most importantly, the burn rate will provide you with a feel for the run-way before you need new cash by simply dividing the available cash by the monthly or weekly burn rate. A company with a low burn rate can theoretically operate longer without capital injection.
The rate at which a company consumes cash to cover expenses. (Typically expressed monthly or weekly). It is usually applied to a company with zero or low revenues or a high level of expenses designed to grow fast to grab market share. Burn rate gives a metric of financial health and status of aggressive growth. Most importantly, the burn rate will provide you with a feel for the run-way before you need new cash by simply dividing the available cash by the monthly or weekly burn rate. A company with a low burn rate can theoretically operate longer without capital injection.
