Cash Burn Rate
What is it? The rate that a company uses up cash is known as the cash burn rate. Usually it is important to look at the cash burn rate in startups and companies in crisis situations. By looking at the rate and the cash on hand you can determine how long it will take at the present rate until the company needs to refinance by either issuing stock or taking on debt.Cash Burn Rate = Total Cash Change / Time Period
Typically a month or quarterly period is looked at when investing in a startup or company in crisis.
Time before financing is needed= Cash On Hand / Cash Burn Rate
Added By: Tyler
The Cash Burn Rate definition has been viewed 616 Time(s)!
Send To Friends!
If you'd like to send the Cash Burn Rate definition to yourself or to your friends/colleagues, just enter the e-mail addresses in the boxes below -We hope you now understand the meaning of Cash Burn Rate. If you need any more information on this term, please don't hesitate to contact us.