Business

Monthly Burn Rate Calculator

Measure how much cash a business spends each month from its opening and closing balances.

This result tells you how much cash the business spends on average each month, so it shows how quickly the cash balance is falling.

Formula

Monthly burn rate = (cash at start minus cash at end) divided by the number of months in the period.

How it works

Take the cash balance at the start and end of a period and divide the drop by the number of months. A positive burn rate means cash is falling; a negative result means cash grew. Founders watch this number because it sets how long the money lasts.

Worked example

For example, with $60,000 at the start, $45,000 at the end, and 3 months in the period, the monthly burn rate is ($60,000 - $45,000) divided by 3, which is $5,000 per month.

FAQs

What if cash went up?
Then the result is negative, which means net cash inflow rather than burn. That is a good sign, not an error.

Should I include one-off income?
Large one-off items can distort the average, so note them separately or use a typical month instead.

Is burn the same as expenses?
Not exactly. Burn is the net cash change, so income received during the period already offsets spending.

Estimates only, not financial advice. Check your figures before making a business decision.

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