Burn Rate Calculator
Calculate your net monthly burn rate and cash runway from cash on hand, monthly expenses, and monthly revenue.
How to use this tool
- Enter your total cash on hand right now.
- Enter your total monthly operating expenses (gross burn).
- Enter your monthly revenue.
- Read your net burn, gross burn, runway in months, and status.
See how long your cash will last. Enter cash on hand, monthly expenses, and monthly revenue to get your net burn rate, gross burn, and cash runway in months.
Formula
Net burn = Monthly expenses − Monthly revenue
Gross burn = Monthly expenses (total cash out)
Cash runway (months) = Cash on hand ÷ Net burn
If revenue meets or exceeds expenses, net burn is zero or negative and runway is effectively infinite — the business is cash-flow positive.
How it works
Burn rate is how fast a company spends cash. Gross burn is total monthly cash outflow; net burn subtracts monthly revenue, showing the cash you actually consume each month. Runway divides cash on hand by net burn to estimate how many months you can operate before running out — the single most important survival metric for an early-stage or pre-profit business.
This model assumes burn and revenue stay roughly flat, which is a simplification: revenue usually grows and expenses change as you hire or cut, so real runway is a moving target you should re-run monthly. It uses cash on hand at a point in time and does not account for committed but undrawn funding, large lumpy payments, or seasonality. The common planning heuristic is to keep at least 12–18 months of runway and to start raising or reducing burn well before runway falls under six months, because fundraising and cost-cutting both take time.
Reviewed by the AbraCalc Business Desk. Educational estimate only, not financial advice; pair it with a proper cash-flow forecast for decisions.
Worked example
$600k cash, $120k expenses, $70k revenue
- Net burn = 120,000 − 70,000 = 50,000 per month.
- Gross burn = 120,000 (total cash out).
- Cash runway = 600,000 ÷ 50,000 = 12.00 months.
- 12 months of runway is in the comfortable range.
Net monthly burn = $50,000.00, cash runway = 12.00 months
Runway from $600,000 cash at various net burn rates
| Net monthly burn | Runway (months) |
|---|---|
| $25,000 | 24.00 |
| $40,000 | 15.00 |
| $50,000 | 12.00 |
| $75,000 | 8.00 |
| $100,000 | 6.00 |
| $150,000 | 4.00 |
| $200,000 | 3.00 |
Key terms
- Gross burn
- Total monthly cash going out, before counting any revenue.
- Net burn
- Monthly cash actually consumed: expenses minus revenue.
- Cash runway
- How many months you can operate before cash runs out, at the current net burn.
- Cash-flow positive
- When revenue meets or exceeds expenses, so net burn is zero or negative and runway is effectively infinite.
Frequently asked questions
- What is the difference between gross and net burn?
- Gross burn is all the cash you spend in a month. Net burn subtracts revenue, so it is the cash you actually consume. Runway is driven by net burn, because revenue offsets some of your spending.
- How much runway should I keep?
- A common rule of thumb is 12–18 months. Because raising money or cutting costs takes time, many founders start acting when runway drops below about six months rather than waiting until cash is nearly gone.
- What happens if revenue exceeds expenses?
- Then net burn is zero or negative — you are cash-flow positive and adding cash each month, so runway is effectively infinite at the current rates. This calculator reports that status instead of a finite runway.