In one sentence
How fast a company spends cash each month — the runway metric that keeps growing companies honest.
How to apply cash burn rate
- Track monthly net cash outflow
- Calculate runway in months
- Trigger cost review before runway gets short
The #1 mistake to avoid
Discovering the burn after the runway is gone.
The metric that matters
12+ months runway
Frequently asked questions
What is cash burn rate?
How fast a company spends cash each month — the runway metric that keeps growing companies honest.
Why does cash burn rate matter for my business?
Because it directly affects how well your business performs — get it wrong and it costs you in measurable ways. Done right, it becomes a competitive advantage.
How do I apply cash burn rate?
Start with the practical steps: Track monthly net cash outflow; Calculate runway in months; Trigger cost review before runway gets short. The key is to start small, measure, and expand what works.
What is the most common mistake with cash burn rate?
Discovering the burn after the runway is gone.
F
IDAP Finance Division
Senior practitioners, SLA-backed
This glossary entry is maintained by the IDAP Finance division — specialists who deliver this capability on demand to businesses worldwide.