What is burn rate?

Burn rate is a synonymous term for negative cash flow. It is a measure for how fast a company will use up its shareholder capital. If the shareholder capital is exhausted, the company will either have to start making a profit, find additional funding, or close down.

Venture capital funding in the beginning of the activity, its a measure of negative cash flow when cash flows dose not cover the operating expenses, the usual recourse to reduce the born rate which in most companies its means reduceing of the labor cost.

The rate at which a new company uses up its venture capital to finance overhead before generating positive cash flow from operations. In other words, it's a measure of negative cash flow.

Calculating a Company's Burn RateThe burn rate is determined by looking at the cash flow statement. Recall that the cash flows statement reports the change in the firm's cash position from one period to the next by accounting for the cash flows from operations, investment activities and financing activities.

cash spend per month.It used usually for negative cash flow. It tell how fast a company uses its share holder capital

Burn rate is usually the initial monthly investment of a company. It's also a measure of how long an organization can operate until it gets more financial support.