Net Burn
Net burn is an important metric for SaaS companies. It shows how much cash your business is losing each month after considering both money going out (expenses) and money coming in (revenues). This number helps you understand how quickly you’re spending your cash reserves and how long you can keep operating before you’ll need additional funding.
Net Burn Formula
Net Burn = Gross Burn – Cash Revenues
Gross Burn is your total cash outflows, such as salaries, rent, or other operating costs.
Cash Revenues are the inflows from your normal business activities, like customer payments, deposits, or interest income.
By subtracting revenues from expenses, you get a clear view of your true monthly cash position.
Excluded Transactions
Net Burn excludes transactions that do not represent operating performance, such as:
Equity transactions.
Bank-to-bank transfers (including Stripe and credit card transfers).
See Also
To learn more about Net Burn inputs, review these articles:
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