Burn Rate (Gross & Net)

Definition

How fast cash leaves: gross burn = total cash out per month; net burn = cash out minus cash in.

Formula

Gross burn = Monthly cash outflows
Net burn = Outflows - Inflows

Worked Example

Cash out $97,000/month, cash in $88,000/month:

Gross burn = $97,000
Net burn   = $9,000

Interpretation & Pitfalls

Burn is a CASH metric — accrual profit and burn can diverge sharply in months with annual prepayments or CAPEX.

In TupicFinance

Bank-transaction data gives true cash burn, independent of the accrual P&L.