← The FP&A libraryPractice · 17 questions →
Cash & working capital
Burn rate
Gross burn is total monthly cash out; net burn is cash out less cash in — the amount the cash balance actually falls each month.
Owned by: Entry analystTest band: Entry analyst
The formula
Net burn = Cash out − Cash in
In practice
Net burn is the runway number. Gross burn is what you would have to cover if revenue stopped.
The kind of thing the test asks
- A business spends $200k a month and collects $140k a month. Its net burn is…
More in cash & working capital
Free · no account · no card
Get your 2027 budget built from your QuickBooks — P&L, balance sheet and cash flow, in Excel.
Knowing the method is half of it. Wauvel runs it on your QuickBooks, every day.
$99/mo, everything included. Free for 14 days, no card.