Burn rate

Burn rate,

Definition of Burn rate:

  1. Speed at which a new firm or project consumes capital and credit, before breaking-even and generating some income.

  2. The burn rate is usually quoted in terms of cash spent per month. For example, if a company is said to have a burn rate of $1 million, it would mean that the company is spending $1 million per month.

  3. The rate at which an enterprise spends money, especially venture capital, in excess of income.

  4. The burn rate is typically used to describe the rate at which a new company is spending its venture capital to finance overhead before generating positive cash flow from operations. It is a measure of negative cash flow.

How to use Burn rate in a sentence?

  1. The corporation lays off workers to cut burn rate.
  2. The burn rate is typically calculated in terms of the amount of cash the company is spending per month.
  3. Gross burn is the total amount of operating costs it racks up each month, while net burn is the total amount of money a company loses monthly.
  4. The burn rate is the pace at which a new company is running through its startup capital ahead of it generating any positive cash flow.

Meaning of Burn rate & Burn rate Definition