burn rate

[burn reyt]

noun

Business.

1. Also called net burn rate. the negative cash flow for an enterprise, calculated as the monthly sum of revenue minus operating expenses.

   Investors aren’t concerned about the company’s high burn rate since its growth is also explosive.

2. Also called gross burn rate. the operating expenses of an enterprise, sometimes presented as the length of time a startup investment will last without additional income if the monthly operating expenses remain the same.

   At the current burn rate, the company can fund two more quarters before it’s forced to seek fresh sources of cash inflow.

Word History and Origins

Origin of burn rate¹

First recorded in 1960–65; burn ¹ (in the sense “consume rapidly”) + rate ¹ ( def. )