Formula
net burn = cash out − cash in
Net burn
Net burn is total cash out minus total cash in over a period, and it is the figure that determines runway.
Net burn is the honest measure of how fast the bank balance falls. If it is zero or negative the company is cash-flow positive and runway is not the binding constraint.
It moves with revenue, which makes it flattering in a strong month and alarming in a weak one. Watching it alongside gross burn separates a spending problem from a revenue problem.
Related terms
Keep this number live
Plainhub computes net burn from money you record in plain words, so it is current when you need it rather than the night before a board meeting.
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