Financial Planning

Burn Rate Calculator

Calculate your company's monthly and annual burn rate from cash balances. Determine cash runway to understand how long your company can operate before running out of cash. Essential for startups, investors, and financial planning.

Last updated: January 28, 2026

Calculate monthly & annual burn rate
Determine cash runway
Track financial sustainability

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Burn Rate Calculator
Calculate monthly and annual burn rate, plus cash runway, from initial balance, final balance, and duration.

Cash balance at the start of the period.

Cash balance at the end of the period.

Results

Burn rate (per month)

$50,000 / month

Burn rate = (Initial balance − Final balance) ÷ Duration

Cash burned

$500,000

Burn rate (per year)

$600,000 / year

Cash runway

10.0 months

Cash runway = Final balance ÷ Burn rate per month

How the Burn Rate Calculator Works

Burn rate measures how quickly a company spends its cash reserves. It's calculated by comparing cash balances at two points in time and dividing the difference by the duration between those points.

Burn Rate Formula

Burn rate = (Initial balance − Final balance) ÷ Duration

Initial balance: Cash at the start of the period

Final balance: Cash at the end of the period

Duration: Time period (days, weeks, months, or years)

Cash Runway Formula

Cash runway = Final balance ÷ Burn rate per month

Cash runway tells you how many months your company can operate before running out of cash, assuming the current burn rate continues.

Example: If you have $500,000 remaining and burn $50,000/month, your runway is 10 months.

Understanding Burn Rate Metrics

Monthly Burn Rate

The average amount of cash spent per month. This is the most commonly used metric for tracking financial health.

Cash Runway

The time remaining before cash runs out. A longer runway provides more time to achieve profitability or secure funding.

Burn Rate Calculator Example

Example: Startup Cash Analysis
A startup started with $1,000,000 and has $500,000 remaining after 10 months

Inputs:

  • Initial balance: $1,000,000
  • Final balance: $500,000
  • Duration: 10 months

Calculations:

  • Cash burned: $500,000
  • Burn rate: $50,000/month
  • Annual burn: $600,000/year
  • Cash runway: 10 months

Interpretation: The company is spending $50,000 per month and has 10 months of runway remaining. This provides time to either raise additional funding, reduce expenses, or achieve profitability.

Frequently Asked Questions

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