Net Cash Burn
The net cash burn is the amount of money by which cash is decreasing in a reporting period.
-Measures how quickly your business is spending money (net-negative cash flow)
-Includes any revenue that is generated by the company
-Can fluctuate from period to period depending on business model
-Should always be a positive (absolute) value
A company has started a month with 2000 € in the bank but at the end of the month has only 1000 € left. The burn rate for this month is 1000 €.
Negations / Exclusions
– Unusual positive cash flow such as an investment