Burn Rate (Net)
Definition
The net cash consumed by a company in a defined period, calculated as total cash outflows minus total cash inflows from all sources during that period. Net burn rate is the operative figure for cash runway calculation. Net burn rate is not equivalent to gross burn rate. The two measures are not interchangeable.
Common Misapplication
The most common misapplication is calculating net burn by subtracting only recognised revenue from gross outflows, rather than total cash inflows. Cash received from customers before revenue is recognised, such as annual subscriptions paid upfront, reduces net burn in the period of receipt regardless of when it is recognised as revenue.
FFI Standard Reference
This term is defined and applied in Book 1, Section 1.2: The Cash Management Standard.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Burn Rate (Net). https://ffistandard.org/glossary/burn-rate-net/. 2026.