Burn rate is the amount of money your company loses each month as you make investments in staff and equipment that funds technology, sales, marketing and management. It is basically the negative cash flow of a company. It shows how quickly a startup is spending money. This key metric is essential for determining how much cash the company needs to keep operating and growing i.e. it provides the basis for calculation of another important metric "Runway".
Gross burn is how much you are spending each month and net burn is the difference between your revenue and costs each month.
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Analysis Help: The lower your Gross and Net Burn Rate the better your company is performing. Negative Net Burn Rate indicates that your company is making profit.
Analysis Help: Purple curve is the visual representation of your month by month expenditure. Yellow curve represents how much money you are burning each month after deducting the revenue i.e. Total Monthly spent - Total Monthly Revenue.
Analysis Help: Blue curve represents the percentage change in your monthly Gross Burn. If you see a 20% change in the month of February that means you are spending 20% more cash compared to the month of January. Similarly if you notice -10% change in February that means you are spending 10% less money compared to January.((FEB spent - JAN spent)/JAN spent)*100