Average Daily Burn Rate Calculator
This tool calculates key financial metrics for your business or project, including your total cash burn, average daily burn rate, and remaining cash runway.
Enter your Start Date, End Date, and the corresponding Starting and Ending Cash Balances for the period. The calculator will provide a snapshot of your financial health and forecast.
Enter Financial Data
Understanding Burn Rate & Runway Formulas
What is Net Burn Rate?
Net burn rate is the net amount of money a company loses over a specific period. It is a "net" figure because it implicitly accounts for all cash inflows (like revenue) and outflows (like salaries, rent, marketing). It's calculated simply as:
Total Burn = Starting Cash - Ending Cash
This calculator determines your average daily burn rate by dividing the total burn by the number of days in your selected period.
Daily Burn = Total Burn / Number of Days
What is Cash Runway?
Cash runway is a crucial forecast that tells you how long your company can continue operating before it runs out of money, assuming your burn rate remains constant. It's a simple but powerful health metric:
Runway (in days) = Ending Cash Balance / Average Daily Burn Rate
A short runway signals an urgent need to either raise more funds, increase revenue, or cut costs.
10 Calculation Examples
Click on an example to see how different scenarios affect burn rate and runway.
Example 1: Early-Stage Startup (Quarterly)
Scenario: A startup analyzes its first quarter post-seed funding.
1. Known Values: Start Date: Jan 1, End Date: Mar 31, Start Cash: $250,000, End Cash: $190,000.
2. Period: 90 days in the quarter (Jan-Mar).
3. Calculate Total Burn: $250,000 - $190,000 = $60,000.
4. Calculate Daily Burn: $60,000 / 90 days = $666.67 per day.
5. Calculate Runway: $190,000 / $666.67 ≈ 285 days.
Conclusion: The startup has about 9.5 months of runway left.
Example 2: Freelancer Financial Check-in
Scenario: A freelancer assesses their finances over a two-month period.
1. Known Values: Start Date: May 1, End Date: Jun 30, Start Cash: $25,000, End Cash: $21,500.
2. Period: 61 days (May-Jun).
3. Calculate Total Burn: $25,000 - $21,500 = $3,500.
4. Calculate Daily Burn: $3,500 / 61 days = $57.38 per day.
5. Calculate Runway: $21,500 / $57.38 ≈ 375 days.
Conclusion: The freelancer has over a year of runway at their current net burn.
Example 3: High-Growth, Pre-Revenue Phase
Scenario: A tech company is spending heavily on development before launch.
1. Known Values: Start Date: Aug 1, End Date: Aug 31, Start Cash: $500,000, End Cash: $420,000.
2. Period: 31 days (August).
3. Calculate Total Burn: $500,000 - $420,000 = $80,000.
4. Calculate Daily Burn: $80,000 / 31 days ≈ $2,580.65 per day.
5. Calculate Runway: $420,000 / $2,580.65 ≈ 163 days.
Conclusion: With a high burn and no revenue, they have about 5.4 months of runway.
Example 4: Break-Even or Profitable Month
Scenario: A stable SaaS company has a cash-neutral month.
1. Known Values: Start Date: Sep 1, End Date: Sep 30, Start Cash: $150,000, End Cash: $150,000.
2. Period: 30 days (September).
3. Calculate Total Burn: $150,000 - $150,000 = $0.
4. Calculate Daily Burn: $0 / 30 days = $0 per day.
5. Calculate Runway: Since the burn is zero, the runway is infinite.
Conclusion: The company is sustainable and not burning cash.
Example 5: Short-Term Project Budget
Scenario: A team is given a budget for a 2-week marketing sprint.
1. Known Values: Start Date: Oct 2, End Date: Oct 15, Start Cash: $10,000, End Cash: $4,500.
2. Period: 14 days.
3. Calculate Total Burn: $10,000 - $4,500 = $5,500.
4. Calculate Daily Burn: $5,500 / 14 days ≈ $392.86 per day.
5. Calculate Runway: $4,500 / $392.86 ≈ 11 days.
Conclusion: If spending continued at this rate, the remaining cash would last only 11 days.
Example 6: Annual Financial Review
Scenario: A company looks at its entire previous year's performance.
1. Known Values: Start Date: Jan 1, 2023, End Date: Dec 31, 2023, Start Cash: $1,200,000, End Cash: $300,000.
2. Period: 365 days.
3. Calculate Total Burn: $1,200,000 - $300,000 = $900,000.
4. Calculate Daily Burn: $900,000 / 365 days ≈ $2,465.75 per day.
5. Calculate Runway: $300,000 / $2,465.75 ≈ 122 days.
Conclusion: Despite starting with a lot of cash, their annual burn rate leaves them with only ~4 months of runway.
Example 7: Post-Holiday Retail Analysis
Scenario: An e-commerce store assesses cash flow after a major sales period.
1. Known Values: Start Date: Nov 1, End Date: Jan 31, Start Cash: $50,000, End Cash: $85,000.
2. Analysis: Here, Ending Cash is greater than Starting Cash. This is positive cash flow, not a "burn."
3. Calculator Action: The tool would show an error, as it's designed to measure cash loss, not gain.
Conclusion: The business was profitable over the period, so "burn rate" is not a applicable metric.
Example 8: Bootstrapped Business
Scenario: A small, self-funded business keeps a close eye on its minimal expenses.
1. Known Values: Start Date: Jul 1, End Date: Jul 31, Start Cash: $15,000, End Cash: $14,200.
2. Period: 31 days.
3. Calculate Total Burn: $15,000 - $14,200 = $800.
4. Calculate Daily Burn: $800 / 31 days ≈ $25.81 per day.
5. Calculate Runway: $14,200 / $25.81 ≈ 550 days.
Conclusion: With a very low burn rate, the business has a long runway of over 1.5 years.
Example 9: Seasonal Business (Off-Season)
Scenario: A tour company analyzes its spending during the winter off-season.
1. Known Values: Start Date: Dec 1, End Date: Feb 28, Start Cash: $75,000, End Cash: $45,000.
2. Period: 90 days.
3. Calculate Total Burn: $75,000 - $45,000 = $30,000.
4. Calculate Daily Burn: $30,000 / 90 days ≈ $333.33 per day.
5. Calculate Runway: $45,000 / $333.33 ≈ 135 days.
Conclusion: They have enough cash to last through the off-season and into the next peak season.
Example 10: Final Stretch Before Funding
Scenario: A startup is low on cash and needs its next funding round to close soon.
1. Known Values: Start Date: Apr 1, End Date: Apr 30, Start Cash: $40,000, End Cash: $12,000.
2. Period: 30 days.
3. Calculate Total Burn: $40,000 - $12,000 = $28,000.
4. Calculate Daily Burn: $28,000 / 30 days ≈ $933.33 per day.
5. Calculate Runway: $12,000 / $933.33 ≈ 13 days.
Conclusion: The situation is critical, with less than two weeks of runway remaining.
Frequently Asked Questions (FAQs)
1. What exactly is "Average Daily Burn Rate"?
It's the average amount of money a company loses per day. It's calculated by taking the total cash spent over a period (Starting Cash - Ending Cash) and dividing it by the number of days in that period. It's a key metric for understanding financial health.
2. Why is "Cash Runway" so important?
Runway tells you how long your company can survive before running out of money, assuming your burn rate stays constant. It is the single most critical indicator of urgency for fundraising, cost-cutting, or accelerating revenue.
3. Does this calculator account for my revenue?
Yes, indirectly. The calculation is based on your change in cash balance, so it is a "net" burn. Any revenue you received during the period has already been factored in, as it would have increased your cash balance, thus lowering your total burn.
4. Why did I get an error saying "Starting Cash must be greater than... Ending Cash"?
This calculator measures cash "burn," which is a loss of money. If your ending cash is higher, you had a net gain (positive cash flow). This tool is specifically designed to analyze spending rates, not profitability.
5. My runway says "Infinite / Not Burning". What does that mean?
This occurs when your ending cash is the same as your starting cash. If you are not losing any money (your daily burn is $0), you can't run out. Therefore, your runway is theoretically infinite.
6. How does the calculator determine the number of days?
It calculates the number of days inclusively. For example, the period from May 1st to May 3rd is counted as 3 days (the 1st, 2nd, and 3rd). This ensures accuracy across months with different day counts.
7. Can I use this for personal finance?
Absolutely. The principles are identical. You can track your average daily spending from your bank account balances to understand how long your savings will last at your current rate of expenditure.
8. How accurate is the runway prediction?
The runway is a simple forecast based on the *past* average burn rate. It's a useful guide but can be misleading if your future spending changes dramatically (e.g., you hire new staff or stop a major ad campaign). It should be recalculated regularly.
9. What if my burn rate is inconsistent day-to-day?
That's perfectly normal. Most companies have lumpy expenses (e.g., payroll twice a month). This calculator averages those highs and lows over the entire period to give you a single, understandable "Average Daily Burn Rate," which is more useful for long-term forecasting.
10. Why is there a timezone adjustment in the code?
JavaScript can sometimes miscalculate date differences by one day due to timezone offsets between the user's browser and the server. A small correction is included in the script to ensure the number of days in the period is always counted correctly.
