Formula
Burn Rate = Total Monthly Expenses
Calculation Example
If a company spends $50,000 per month and has $500,000 in reserves, the burn rate is $50,000, and the runway is 10 months.
Data Source
Cash flow statements, accounting reports
Tracking Frequency
Monthly, Quarterly
Optimal Value
Lower is better; indicates financial efficiency.
Minimum Acceptable Value
Must be low enough to sustain operations until profitability is reached.
Benchmark
Startups aim for a burn rate that allows at least 12-18 months of runway.
Recommended Chart Type
Line chart (to track ca
How It Appears in Reports
Why Is This KPI Important?
Typical Problems and Limitations
Actions for Poor Results
Related KPIs
Real-Life Examples
Most Common Mistakes
