What is the difference?

Gross Burn vs Net Burn

Net Burn

Gross Burn

What is it?

Net Burn, often referred to as Burn Rate, is the amount a company is losing per month as they burn through their cash reserves. It occurs when a company’s operating costs are higher than their revenue. A company that is profitable and generating cash has a "negative Net Burn".

A company's Gross Burn is the total cash spent on operations. These costs typically include all salaries, rent, and other overhead as well as interest and taxes. This metric is often confused with Net Burn, which is a measure of negative cash flow, and includes revenue and expenses.


ƒ (Operating Expenses - Gross Margin)
ƒ (COGS + Salaries and Overhead + Depreciation and Amortization + Other Operating Expenses + Interest and Taxes)

Published and updated dates

Date created: Oct 12, 2022

Latest update: Oct 19, 2022

Date created: Oct 12, 2022

Latest update: Oct 12, 2022