Calculate your Gross Burn, Net Burn, and estimated Cash Runway.
Total cash currently in the bank.
Salaries, rent, server costs, marketing, etc. (Gross Burn).
Income generated per month (enter 0 if pre-revenue).
Gross Burn Rate (Monthly Spend)
$0.00
Net Burn Rate (Cash Lost/Month)
$0.00
Estimated Runway
0 Months
function calculateBurnRate() {
// 1. Get Input Values
var cashStr = document.getElementById('cashBalance').value;
var expensesStr = document.getElementById('monthlyExpenses').value;
var revenueStr = document.getElementById('monthlyRevenue').value;
// 2. Validate Inputs
if (cashStr === "" || expensesStr === "") {
alert("Please enter both Cash Balance and Monthly Expenses.");
return;
}
var cash = parseFloat(cashStr);
var expenses = parseFloat(expensesStr);
var revenue = revenueStr === "" ? 0 : parseFloat(revenueStr);
// Handle edge cases for negative inputs
if (cash < 0 || expenses < 0 || revenue < 0) {
alert("Please enter positive values only.");
return;
}
// 3. Calculate Gross Burn Rate (Just the expenses)
var grossBurn = expenses;
// 4. Calculate Net Burn Rate (Expenses – Revenue)
var netBurn = expenses – revenue;
// 5. Calculate Runway
var runway = 0;
var runwayText = "";
var statusDiv = document.getElementById('runwayStatus');
// Reset classes
statusDiv.className = 'runway-alert';
if (netBurn <= 0) {
// Profitable or break-even
runwayText = "Infinite (Profitable)";
statusDiv.innerHTML = "You are Cash Flow Positive! You are not burning cash.";
statusDiv.classList.add('alert-success');
} else {
// Burning cash
if (cash <= 0) {
runwayText = "0 Months";
statusDiv.innerHTML = "You are out of cash.";
statusDiv.classList.add('alert-danger');
} else {
runway = cash / netBurn;
// Round to 1 decimal place
runway = Math.round(runway * 10) / 10;
runwayText = runway + " Months";
if (runway < 6) {
statusDiv.innerHTML = "CRITICAL: You have less than 6 months of runway.";
statusDiv.classList.add('alert-danger');
} else if (runway < 12) {
statusDiv.innerHTML = "WARNING: You have less than 1 year of runway.";
statusDiv.classList.add('alert-warning');
} else {
statusDiv.innerHTML = "HEALTHY: You have over 1 year of runway.";
statusDiv.classList.add('alert-success');
}
}
}
// 6. Formatting Currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
// 7. Update DOM
document.getElementById('grossBurnResult').innerText = formatter.format(grossBurn);
// For Net Burn, we show it as a positive number representing loss, unless it's profit
if (netBurn <= 0) {
document.getElementById('netBurnResult').innerText = "+" + formatter.format(Math.abs(netBurn)) + " (Profit)";
document.getElementById('netBurnResult').style.color = "#28a745"; // Green
} else {
document.getElementById('netBurnResult').innerText = formatter.format(netBurn);
document.getElementById('netBurnResult').style.color = "#dc3545"; // Red
}
document.getElementById('runwayResult').innerText = runwayText;
// Show results
document.getElementById('resultsArea').style.display = 'block';
}
How Do You Calculate Monthly Burn Rate?
Calculating monthly burn rate is one of the most fundamental tasks for any startup founder or business owner. It represents the speed at which your company is "burning" through its cash reserves. Understanding this metric is essential for determining your financial runway—the amount of time you have left before you run out of money.
What is Burn Rate?
In business finance, Burn Rate is the rate at which a company loses money. It is typically calculated on a monthly basis. Investors and founders use this metric to track overhead and ensure the business is not spending its capital too quickly before becoming profitable or raising the next round of funding.
There are two types of burn rate you must understand:
Gross Burn Rate: The total amount of money you spend each month (Expenses).
Net Burn Rate: The amount of money you lose each month after accounting for income (Expenses – Revenue).
The Formula: How to Calculate Net Burn Rate
While Gross Burn is simply the sum of your monthly operating expenses (salaries, rent, software subscriptions, etc.), the Net Burn Rate gives you a more accurate picture of your financial health if you are generating revenue.
Net Burn Rate = Monthly Operating Expenses – Monthly Revenue
For example, if your company spends $20,000 per month on operations and generates $5,000 in revenue:
Gross Burn: $20,000
Net Burn: $20,000 – $5,000 = $15,000
This means you are burning $15,000 of your cash reserves every month.
Calculating Your Runway
Once you know your Net Burn Rate, you can calculate your Runway. This tells you exactly how many months your company can survive at its current spending level.
Runway (Months) = Current Cash Balance / Net Burn Rate
Using the previous example, if you have $150,000 in the bank and a Net Burn Rate of $15,000:
$150,000 / $15,000 = 10 Months of Runway
Why Your Burn Rate Fluctuates
It is important to note that burn rate is rarely static. It fluctuates based on:
Hiring: Adding new employees increases Gross Burn significantly.
Marketing Spend: Seasonal ad campaigns can cause spikes in monthly expenses.
Revenue Churn: If you lose customers, your revenue drops, and your Net Burn increases.
One-off Purchases: Buying equipment or paying annual server fees upfront affects cash flow for that specific month.
How to Reduce Burn Rate
If the calculator above shows that your runway is dangerously short (typically less than 6-9 months), you need to take action to reduce your burn rate. Strategies include: