Burn rate

A company’s burn rate is the rate at which it spends money. It’s an essential part of calculating and managing your cash flow.

Simply select a time period to calculate the burn rate (such as a quarter or a year). Subtract the amount of cash on hand at the end of the period from the amount of cash on hand at the beginning, then divide the result by the number of months in the period (or by a chosen cadence).

The tax laws are very complex. Our short blog articles cannot cover in full all the nuances of the rules. Your specific facts may hold various opportunities and possible risks that only trained, experienced, and highly qualified tax specialists can spot. We encourage you to find such help, rather than trying to figure it all out on your own. Consider giving this marketplace a try by posting your project and signing up here.

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