Startup cash planning tool
Burn Rate Calculator
Calculate gross burn, net burn, cash runway, projected cash and the funding gap for a target runway.
Burn rate and runway results
Burn rate and runway formulas
Net burn rate = monthly cash outflows − monthly cash inflows.
Gross burn = monthly cash outflowsNet burn from balances = (starting cash − ending cash) ÷ monthsUsable cash = max(current cash − reserve, 0)Cash runway = usable cash ÷ positive net burnCash required for target = reserve + positive net burn × target monthsFunding gap = max(required cash − current cash, 0)
A positive net burn means cash is declining at the measured rate. A negative net burn means monthly inflows exceed outflows or the cash balance increased; the tool describes that as net cash generation. Gross burn cannot be derived from two cash balances alone, so the balance-change method reports it as unavailable.
Checked examples
| Inputs | Calculation | Result |
|---|---|---|
| $500,000 cash; $80,000 monthly inflows; $120,000 outflows; $50,000 reserve; 18-month target | Net burn = $40,000; usable cash = $450,000 | 11.25 months runway; $770,000 required; $270,000 funding gap |
| $800,000 starting cash; $620,000 ending cash over 6 months; $20,000 reserve | ($800,000 − $620,000) ÷ 6 | $30,000 monthly net burn and 20 months runway |
| $500,000 starting cash; $560,000 ending cash over 6 months | ($500,000 − $560,000) ÷ 6 | −$10,000 net burn, meaning $10,000 monthly net cash generation |
Gross burn, net burn and runway
Gross burn
Gross burn is the average amount of cash leaving the business each month before cash receipts. It helps describe the cost base but does not show how revenue offsets spending.
Net burn
Net burn subtracts monthly cash inflows from monthly outflows. Use actual cash receipts and payments for a cash-runway analysis; accrual revenue and expenses can produce a different result.
Cash runway
Runway estimates how many months the usable cash balance supports at a constant positive net burn. This calculator stops runway at the reserve you enter. If net burn is zero or negative, it reports that runway is not limited at the current rate instead of displaying infinity.
How to build a useful burn-rate input
- Use a representative period and the same business scope for inflows, outflows and balances.
- Separate financing proceeds, owner contributions and one-time asset sales when they would distort operating cash generation.
- Include payroll, contractors, rent, software, marketing, taxes and other cash operating payments that belong to the chosen scope.
- Run scenarios for hiring, price changes, delayed collections and one-time payments rather than assuming the recent average will persist.
Limits and assumptions
- Cash, inflows, outflows and reserves must be 0 through 1 trillion in the selected currency.
- The balance method accepts measurement periods greater than 0 through 1,200 months. Target runway accepts 0 through 1,200 months.
- The ending cash balance is treated as current cash in the balance-change method.
- Runway assumes a constant net burn and does not model growth, seasonality, payment timing, debt service changes, taxes or future financing.
- Projected cash after 12 months is a straight-line scenario and can be negative; it is not a forecast or a claim that payments can continue below zero.
- Currency selection changes formatting only. No exchange rates or inflation adjustments are applied.
Important: this is an educational cash-planning estimate, not accounting, investment or fundraising advice. Reconcile cash data with bank and accounting records, and use a detailed cash-flow forecast for decisions about payroll, solvency or financing.
Frequently asked questions
Is burn rate the same as expenses?
Gross burn may resemble cash operating expenses, but net burn also reflects cash inflows. Accrual expenses are not always paid in the same month, so accounting expense and cash burn can differ.
What if net burn is negative?
Negative net burn means cash increased at the measured rate. It is clearer to call the absolute value net cash generation. It does not guarantee that the increase is recurring.
Should funding proceeds count as inflows?
They affect cash balance, but including a financing round as normal operating inflow can hide the underlying burn. For operating burn, separate financing, owner contributions and similar non-operating inflows.
What is a good runway?
There is no universal target. Hiring plans, revenue reliability, financing conditions, contractual commitments and risk tolerance all matter. Use the target runway field as your scenario input, not as a recommendation.
Related calculators
- Cash Conversion Cycle Calculator — examine inventory, collection and supplier-payment timing.
- Break-Even Calculator — estimate units and sales needed to cover fixed and variable costs.
- Business Valuation Calculator — estimate enterprise and equity value from common methods.
- Customer Lifetime Value Calculator — compare customer value, acquisition cost and payback.