burn rate

[ burn reyt ]

noun

, Business.

1. Also called net burn rate [net, , burn, reyt]. the negative cash flow for an enterprise, calculated as the monthly sum of revenue minus operating expenses:

   Investors aren’t concerned about the company’s high burn rate since its growth is also explosive.

2. Also called gross burn rate [grohs, , burn, reyt]. the operating expenses of an enterprise, sometimes presented as the length of time a startup investment will last without additional income if the monthly operating expenses remain the same:

   At the current burn rate, the company can fund two more quarters before it’s forced to seek fresh sources of cash inflow.

Word History and Origins

Origin of burn rate¹

First recorded in 1960–65; burn ¹ (in the sense “consume rapidly”) + rate ¹( def )

Example Sentences

Cruise had $1.7 billion in cash as of Sept. 30, enough to last nine months at the current cash burn rate.

From Reuters

Mike Rose, head of Manchester-based gaming publisher No More Robots, said many firms were spending more money than they were generating from sales and now needed to get this "burn rate" down.

From BBC

Lee’s burn rate — how quickly her campaign is spending the cash that comes in — is high, Wong said, a metric that campaigns watch closely.

From Los Angeles Times

The campaign had a high cash burn rate and most of the money raised came from donors who had contributed the maximum legal amount, suggesting more financial tensions ahead.

From Reuters

The litigation is a roadblock for the company with high cash burn rate as it intends to pay down some of its $5.1 billion in debt by selling more shares and potentially avoid bankruptcy.

From Reuters