Definition
Burn Rate measures how quickly a company spends its cash reserves. It is typically expressed on a monthly basis and is crucial for determining the financial runway of a business.
Related Services
Key in financial planning, cash flow analysis, and investor reporting for startups and growing businesses.
Problem and Application
An excessive burn rate can quickly deplete reserves, jeopardizing operational continuity. Monitoring burn rates helps businesses plan funding needs and identify cost-saving measures.
Conclusion
Burn rate is a vital metric for managing cash flow, especially for early-stage businesses and startups navigating growth and funding cycles.
