How to calculate Burn Rate

Formula

Net burn = cash out − cash in per month; gross burn = total cash out per month

SQL query

This example assumes: cash_flows(day, amount) where inflows are positive and outflows negative. It is written in PostgreSQL syntax; date functions differ slightly in MySQL, BigQuery and SQLite, and your column names will differ from these.

SELECT DATE_TRUNC('month', day) AS month,
       -SUM(amount)                              AS net_burn,
       -SUM(amount) FILTER (WHERE amount < 0)    AS gross_outflow
FROM cash_flows
GROUP BY 1
ORDER BY 1;

Common mistakes that make Burn Rate wrong

• Net burn can be negative (cash generative); that is not an error.
• Annual bills paid in one month make that month look worse; use a trailing three-month average.
• Financing inflows (raises, loans) are not operating revenue; exclude them from net burn.

Ask for Burn Rate in plain English

Instead of writing the query yourself, you can type the question. SchemaChat turns it into SQL against your connected database or uploaded file, runs it, and shows the SQL and the figures it used so you can check the answer before you share it. It does not replace your judgement about the definition: check that the query matches the formula your business uses.

• What was our net burn each month this year?
• What is the trailing three-month average burn?