Fundamental Glossary / Cash Flow Metrics
Cash Burn Rate
The speed at which a loss-making company uses up its cash.
Formula
Often: negative free cash flow per month. Gross burn is cash operating costs. Net burn is costs minus cash revenue.
What it means
Burn is the language of early-stage and turnaround companies that do not yet fund themselves. It answers how fast the cash balance falls.
Gross burn shows the cost machine. Net burn shows what remains after the cash the customers already pay.
How to read it
A falling net burn, from rising collections rather than from a one-month cost cut, is progress. A rising burn needs a funding plan with a date.
What to watch
Burn that ignores upcoming debt repayments, capex, or a deposit that cannot be touched understates the true drain.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.