What Is the Burn Rate Calculator?
Burn rate is the speed at which a business spends its cash reserves. This Burn Rate Calculator helps startups, founders and finance teams measure their net monthly cash burn and estimate their "runway" — the amount of time before the money runs out at the current spending pace. It uses universal currency figures, so it works regardless of country.
You enter three numbers and the tool instantly tells you whether you are burning cash or operating profitably, how long your funds will last, and what share of your expenses is currently uncovered by revenue.
The Inputs You Provide
- Starting Cash: the total cash you have in the bank right now.
- Monthly Expenses: your total recurring monthly costs (salaries, rent, software, marketing, etc.).
- Monthly Revenue: the cash you bring in each month from sales or other income.
The Formula Explained
The calculator first works out your net burn rate:
- $$\text{Net Burn Rate} = \text{Monthly Expenses} - \text{Monthly Revenue}$$
If that result is zero or negative, your revenue covers your costs and the tool flags you as profitable — no runway countdown is needed. If it is positive, the calculator estimates your runway:
- $$\text{Runway (months)} = \frac{\text{Starting Cash}}{\text{Net Burn Rate}}$$
- The whole number becomes your runway in months, and the leftover fraction is converted to days (fraction \(\times 30\)).
- $$\text{Burn Rate Percentage} = \left(\frac{\text{Net Burn Rate}}{\text{Monthly Expenses}}\right) \times 100$$ — the portion of your spending not yet funded by revenue.
Worked Example
Suppose you have $100,000 in starting cash, spend $25,000 a month and earn $10,000 in revenue.
- Net burn rate = $$\$25{,}000 - \$10{,}000 = \$15{,}000 \text{ per month}$$
- Runway = $$\$100{,}000 \div \$15{,}000 = 6.67 \rightarrow 6 \text{ months and } 20 \text{ days} \quad (0.67 \times 30 \approx 20)$$
- Burn percentage = $$\left(\$15{,}000 \div \$25{,}000\right) \times 100 = 60\%$$
So 60% of your costs are uncovered, and at this pace your cash lasts roughly six and a half months.
Burn Rate Across Different Scenarios
The scenarios below show how starting cash, expenses, and revenue combine to determine net monthly burn, runway, and burn percentage. Net burn = expenses − revenue; runway (months) = starting cash ÷ net burn; runway (days) ≈ months × 30.44; burn % = net burn ÷ expenses.
| Starting Cash | Monthly Expenses | Monthly Revenue | Net Burn | Runway (months) | Runway (days) | Burn % |
|---|---|---|---|---|---|---|
| $120,000 | $30,000 | $0 | $30,000 | 4.0 | ~122 | 100% |
| $500,000 | $60,000 | $10,000 | $50,000 | 10.0 | ~304 | 83% |
| $1,000,000 | $80,000 | $25,000 | $55,000 | 18.2 | ~553 | 69% |
| $250,000 | $45,000 | $35,000 | $10,000 | 25.0 | ~761 | 22% |
| $400,000 | $50,000 | $55,000 | −$5,000 | Cash-flow positive | — | 0% (profitable) |
Notice the bottom row: when revenue exceeds expenses, net burn is negative, so there is no depletion runway — the business is generating cash rather than consuming it.
Key Terms Defined
- Net Burn Rate
- The amount of cash a business consumes per month after accounting for revenue: monthly expenses minus monthly revenue. This is the figure that actually drains your bank balance.
- Gross Burn Rate
- Total monthly cash outflows (operating expenses) before subtracting any revenue. It measures total spending regardless of income.
- Runway
- How long current cash reserves will last at the present net burn rate, expressed in months: starting cash ÷ net burn. It indicates the time available before funds run out.
- Starting Cash
- The amount of cash and cash equivalents currently available to fund operations — the balance from which burn is subtracted each month.
- Monthly Expenses
- Total cash spent in a month, including salaries, rent, software, marketing, and other operating costs. Equivalent to gross burn.
- Monthly Revenue
- Cash income earned from operations in a month. Higher revenue reduces net burn and extends runway.
- Burn Rate Percentage
- Net burn expressed as a share of monthly expenses (or revenue), showing how much spending is funded from reserves rather than covered by income. A higher percentage means cash depletes faster.
Frequently Asked Questions
What's the difference between gross and net burn rate? Gross burn is your total monthly expenses; net burn (what this tool calculates) subtracts revenue, showing your true cash drain.
What if revenue is higher than expenses? The calculator marks you as profitable and skips the runway countdown, since you're not depleting cash.
How accurate is the runway estimate? It assumes expenses and revenue stay constant. Real businesses see seasonality and growth, so recalculate whenever your numbers change to keep planning realistic.
